CALL Play Updates

Caterpillar - CAT - close: 64.13 change: +3.79 stop: 59.45 *new*

Don't we wish all of our plays moved this fast. Shares of CAT gapped open higher at $60.95 and closed with a 6.28% gain on big volume. The Wall Street Journal is suggesting that positive comments and optimism by CAT's dealers is what sparked the move this morning. I am suggesting we go ahead and take profits now! We were aiming for $64.75 but this one day move is more than enough. Let's sell half our position now. The February $60 calls gapped open at $2.80 and hit $5.44 intraday. The February $62.50 calls gapped open at $1.80 and hit $3.75 intraday. The two options closed with at $5.20(bid) and $3.55(bid), respectively.

I'm not suggesting new positions. We'll raise our final exit target to $67.00. Our time frame is short. Earnings are about two weeks away and we want to exit before CAT reports. Please note our new stop loss at $59.45.

Chart:

Entry  on   January 09 at $ 60.95 /gap higher entry (small positions)     
Change since picked: + 3.18
/take profits early $ 64.13 (+5.2%) Earnings Date 01/26/10 (confirmed)
Average Daily Volume = 4.8 million
Listed on January 09, 2010


Express Scripts - ESRX - close: 90.23 change: -1.42 stop: 87.45

It looks like we're getting our dip toward $90 a bit sooner than expected. I'm suggesting readers use this pull back as a new entry point to buy calls. Our first target is $95.75. Our second target is $99.75. We do not want to hold over the February earnings report.

Entry  on   January 09 at $ 91.65 (small positions)     
Change since picked: - 1.42
Earnings Date 02/24/10 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on January 09, 2010


FUQI Intl. - FUQI - close: 21.67 change: +0.01 stop: 18.99

FUQI spiked to a new five-week high at $22.45 this morning. Shares gave back all of its intraday gains to close virtually unchanged on the session. This looks like a short-term top and we should expect a dip from here. Broken resistance near $20 and its 50-dma should be new support. I am not suggesting new call positions at this time. This was a very aggressive trade and I suggested very small positions. Our target to exit is $24.75 but more conservative traders may want to start taking profits early anywhere above $22.50.

Entry  on   January 06 at $ 20.51   (small positions 1/4)  
Change since picked: + 1.16
Earnings Date 03/31/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on January 04, 2010


J.P.Morgan Chase - JPM - close: 44.53 change: -0.15 stop: 41.90

The banking sector continued to march higher but shares of JPM gave up its early gains to close with a fractional loss. This is the second time in the last three trading days that JPM stalled just above $45.00. I suspect shares are poised to correct. If you haven't taken profits yet do so now. I would look for a dip toward the $42.50-42.00 zone. Our second and final target is $46.90.

Entry  on   January 04 at $ 42.85 (small positions 1/2)      
Change since picked: + 1.68
take profits on 01/09/10 @ 44.68 (+4.2%) Earnings Date 01/15/10 (confirmed)
Average Daily Volume = 31.6 million
Listed on January 04, 2010


L-3 Communications - LLL - close: 88.64 change: +0.89 stop: 86.90

I was about ready to give up on LLL. The stock broke out higher from its recent sideways consolidation. Traders even bought the dip midday near $88.00, which was recent resistance. This actually looks like an aggressive, higher-risk entry point.

I did label this an aggressive, higher-risk trade. Our first target to take profits is at $89.95. Our second and final target is $94.00. We want to exit ahead of the late January earnings report. FYI: The Point & Figure chart is bullish with a $104 target.

Entry  on  December 28 at $ 86.80       
Change since picked: + 1.84
Earnings Date 01/28/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 26, 2009


Precision Castparts - PCP - close: 116.28 change: -0.98 stop: 112.25

PCP gapped open higher this morning and almost hit our final target. Shares opened at $118.62 and our final target is $118.75. Traders did buy the dip intraday near $115. More conservative traders may want to go ahead and exit early. I'm not suggesting new positions. More aggressive traders could aim higher. We'll keep our final exit at $118.75.

Picked on  December 01 at $107.35      
Change since picked: + 8.93
/1st target hit $112.45 (+4.7%)
Earnings Date 01/20/10 (unconfirmed)
Average Daily Volume = 817 thousand
Listed on November 28, 2009


TORO Co. - TTC - close: 43.77 change: +0.61 stop: 41.40

TTC continues to rally and shares are trading near short-term resistance at their December highs near $44. I don't see any changes from our weekend comments. Our exit target is $45.90. We don't want to hold over the February earnings report. The plan calls for small positions to limit our risk.

Entry  on   January 07 at $ 42.60 (small positions)      
Change since picked: + 1.17
Earnings Date 02/18/10 (unconfirmed)
Average Daily Volume = 289 thousand
Listed on January 05, 2010


UnitedHealth Group - UNH - close: 32.92 change: +0.22 stop: 29.90

The HMO healthcare index drifted lower on Monday. UNH bucked the trend and managed a 0.6% gain. I'm not suggesting new positions at these levels. You could buy calls on a dip near $32.00 but use a very tight stop loss.

This was a "lottery ticket" style of play. We knew it was risky given all the political ups and downs for the healthcare bill. Our time frame was several weeks and we listed January and March calls. At this time if you choose to open new positions I'd use March calls but that would require holding over the late January earnings report (to get the most out of your March calls). Our first target is $34.00. Our longer-term target is $36.00.

Entry  on  December 10 at $ 30.31       
Change since picked: + 2.61
Earnings Date 01/21/10 (unconfirmed)
Average Daily Volume = 819 thousand
Listed on December 10, 2009


Whirlpool - WHR - close: 84.02 change: -0.54 stop: 79.90

WHR consolidated sideways after yesterday's big gain. Look for short-term support near $82.00. I'm not suggesting new positions at this time. Look for a dip back toward $82.00 as a possible entry point. If you open positions going forward I would use the February calls. Our original play suggested January calls so we'll need to exit before expiration.

WHR has already hit our first target at $84.75. Our second target is $89.00.

Entry  on  December 19 at $ 80.76 /gap higher entry      
Change since picked: + 3.26
/1st target hit $84.75 (+4.9%)
Earnings Date 02/08/10 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on December 19, 2009


PUT Play Updates

Sears Holding - SHLD - close: 99.44 change: +0.27 stop: 102.05

The RLX retail index displayed relative weakness but shares of SHLD managed a small 0.2% gain. The stock is still struggling with resistance near $100. I don't see any changes from our weekend play description. I'd still consider new positions here.

I'm suggesting small bearish positions with a stop loss above last week's high. Our first target to exit is $95.25. Our second target to exit is $91.00.

Entry  on   January 09 at $ 99.17 (small positions)
Change since picked:       + 0.00
Earnings Date            02/25/10 (unconfirmed)
Average Daily Volume =        2.0 million  
Listed on   January 09, 2010         


CLOSED BULLISH PLAYS

Intl. Business Mach. - IBM - close: 129.85 change: -1.37 stop: 128.90

IBM displayed relative weakness. The stock erased Friday's bounce. Shares actually spiked under the $129.00 level and hit our stop loss (128.90) to close our trade. The move today looks like a short-term bearish reversal. If you didn't get stopped out I'd consider an early exit.

Chart:

Entry  on  December 28 at $131.55      
Change since picked: - 2.65 <-- stopped @ 128.90 (-2.0%)
Earnings Date 01/19/10 (unconfirmed)
Average Daily Volume = 5.8 million
Listed on December 26, 2009


CLOSED BEARISH PLAYS

Fedex Corp. - FDX - close: 87.25 change: +2.26 stop: 85.51

The transportation sector was one of the better performers today. Today's rally in this group helped confirm last Friday's bullish breakout. Shares of FDX, which had been lagging its peers, finally broke out through the top of its trading range. I've been suggesting that nimble traders could buy calls on a breakout over $86 or $88 and FDX rallied past both levels intraday.

I'm dropping FDX as a bearish candidate as the stock never hit our trigger to buy puts at $81.90.

Chart:

Entry  on   January xx at $ xx.xx <-- TRIGGER @ 81.90      
Change since picked: + 0.00 *NEVER OPENED*
Earnings Date 03/18/10 (unconfirmed)
Average Daily Volume = 3.3 million
Listed on January 02, 2010


CLOSED STRANGLE & SPREAD PLAYS

United Parcel Service - UPS - close: 62.82 change: +2.65 stop: n/a

After weeks and weeks and weeks of going nowhere UPS is finally moving. The rally from last Friday continued. Shares of UPS gapped open higher and closed the session with a 4.4% gain and a new 52-week high. Over the weekend I turned cautious on our strangle play since we were down to our last five days and suggested we exit if either option in our strangle hit $1.35, which is breakeven. Well, the trading gods have smiled upon us and the January $60 calls opened at $1.49 closing our play above our adjusted target. Of course it was painful to see those same calls spike to $3.40 intraday. Our original target was actually $3.50 or higher.

Our strangle trade is closed. The options suggested for the January strangle were the January $60.00 calls (UPS-AL) and the January $55.00 puts (UPS-MK). Our estimated cost was $1.35.

Chart:

Picked on  November 21 at $ 57.99 /gap open entry      
Change since picked: + 4.83
Earnings Date 02/02/10 (unconfirmed)
Average Daily Volume = 4.7 million
Listed on November 21, 2009