Stocks recovered from their intraday lows and the major averages rallied toward their recent highs. The gap down affected our latest entry points.


CALL Play Updates

Apple Inc. - AAPL - close: 215.04 change: +9.11 stop: 203.99

A market rally, positive analyst comments, a new higher price target, and speculation over AAPL's next product all came together and pushed AAPL to a $9 gain (+4.4%). The stock rallied toward its January highs near $215. Hopefully the rally continues. We are down to our last few days. AAPL is due to report earnings on January 25th and we do not want to hold over the report.

This was an aggressive bullish trade and the plan was to use small positions (1/4 to 1/2 your normal trade size). Our first target to exit is $219.50. Our second target is $224.50.

Entry  on   January 13 at $210.65 
Change since picked:       + 4.39
Earnings Date            01/25/10 (confirmed)
Average Daily Volume =       17.1 million  
Listed on   January 13, 2010         


AvalonBay Commty. - AVB - close: 80.89 change: +1.46 stop: 77.90

It was a strong session for AVB. The stock produced a bullish engulfing (reversal) candlestick pattern. More aggressive traders may want to open positions now. I am suggesting we stick to our plan and wait for the stock to hit our trigger at $82.05. If triggered our first target is $87.50. We will plan to exit ahead of the early February earnings report.

Entry  on   January xx at $ xx.xx <-- TRIGGER @ 82.05  
Change since picked:       + 0.00   
Earnings Date            02/03/10 (confirmed)
Average Daily Volume =        1.4 million    
Listed on   January 09, 2010         


Express Scripts - ESRX - close: 91.00 change: +0.96 stop: 87.45

ESRX rallied off its intraday lows and posted a 1% gain. Shares look poised to run from here. I would use today's move as a new bullish 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:       - 0.65     
Earnings Date            02/24/10 (unconfirmed)
Average Daily Volume =        2.6 million      
Listed on   January 09, 2010         


FUQI Intl. - FUQI - close: 20.43 change: -0.30 stop: 18.99

FUQI continues to slip and is getting a lot closer to the $20.00 level, which should be support and a new entry point for us. However, if the market continues to rally on Wednesday I wouldn't be surprised to see FUQI rebound from here and readers could use a bounce tomorrow as a new entry point instead of waiting for a dip to $20.00 (the low today was $20.22).

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:       - 0.08       
Earnings Date            03/31/10 (unconfirmed)
Average Daily Volume =        1.0 million      
Listed on   January 04, 2010         


L-3 Communications - LLL - close: 89.54 change: +0.09 stop: 87.85

LLL really didn't make much progress today. Shares rallied off their lows but rolled over under the recent highs to close nearly unchanged. I am not suggesting new bullish positions at this time.

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:       + 2.74
                            /1st target hit @ 89.95 (+3.6%)
Earnings Date            01/28/10 (unconfirmed)
Average Daily Volume =        1.0 million      
Listed on  December 26, 2009         


TORO Co. - TTC - close: 43.05 change: +0.19 stop: 41.40

TTC dipped toward $42.50 this morning but the rebound stalled at $43.50. Readers may want to be patient here and wait for a dip or a bounce near $42.00 before launching new positions. 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:       + 0.45      
Earnings Date            02/18/10 (unconfirmed)
Average Daily Volume =        289 thousand     
Listed on   January 05, 2010         


UnitedHealth Group - UNH - close: 35.13 change: +1.38 stop: 31.95 *new*

The special election being held in Massachusetts to fill Ed Kennedy's senate spot has turned into a flash point on the healthcare debate. Healthcare stocks were in rally mode on expectations that the Republican candidate Scott Brown would beat Democrat Martha Coakley and disrupt the Democrats control over the senate floor.

Shares of UNH gapped open higher and spiked to $35.90 before settling with a 4% gain. If there is a clear winner tonight in the election it could have a big influence on the healthcare stocks. I am suggesting that readers start taking profits now and we'll probably want to sell on any opening spike tomorrow. Officially the newsletter will leave the final target at $36.00 but you may want to aim a little higher. Just be aware that any rally tomorrow could fizzle out as investors take profits. I am raising our stop loss to $31.95.

Entry  on  December 10 at $ 30.31    
Change since picked:       + 4.82    
Earnings Date            01/21/10 (unconfirmed) 
Average Daily Volume =        819 thousand      
Listed on  December 10, 2009         


Yanzhou Coal Mining. - YZC - close: 23.81 change: -0.18 stop: 22.50

Coal stocks, as a sector, gapped open lower and then bounced off their intraday lows. The KOL coal ETF gained 1.75%. Shares of YZC under performed its peers with a 0.75% decline. Yet shares also gapped open lower, which affected our entry point. I don't see any changes from our weekend comments and would still consider new bullish positions at this time. Our first target to take profits is at $26.50.

Entry  on   January 19 at $23.77 /gap down entry
                            /originally listed at $23.93
Change since picked:       + 0.04
Earnings Date            (Unknown)
Average Daily Volume =    444,000  
Listed on   January 17, 2010         


PUT Play Updates

Interoil Corp. - IOC - close: 72.82 change: -1.92 Stop: 76.50

The sell-off in shares of IOC continues. Shares gapped open lower at $74.01 and dipped to $71.23 before paring its losses. The close under its 30-dma is short-term bearish. If you didn't launch positions this morning you could wait for a new failed rally in the $74-75 zone. Our target to exit is $67.00.

Entry  on   January 19 at $74.01 /gap down entry
Change since picked:      - 1.19
Earnings Date           (Unknown)
Average Daily Volume =        1.1 million  
Listed on   January 17, 2010         


CLOSED BULLISH PLAYS

Caterpillar - CAT - close: 60.93 change: +0.81 stop: 59.45

The intraday bounce in shares of CAT today looks like a new bullish entry point. Unfortunately, CAT gapped open lower at $59.76 and dipped to $59.35 before bouncing. That means shares hit our stop loss at $59.45 closing this trade. Nimble traders may want to re-open positions right here with a stop under today's low. CAT has earnings coming up in about six days so I'm going to leave the play closed.

Chart:

Entry  on   January 09 at $ 60.95 /gap higher entry (small positions)
Change since picked:       - 1.50 <-- stopped @ 59.45 (-2.4%)
                         /take profits early $ 64.13 (+5.2%)
Earnings Date            01/26/10 (confirmed)
Average Daily Volume =        4.8 million    
Listed on   January 09, 2010         


Union Pacific - UNP - close: 65.52 change: -0.05 stop: 64.90

Shares of UNP underperformed its peers in the railroad sector and the S&P 500. The stock broke down under the $65.00 level on an intraday basis and hit our stop loss at $64.90. UNP managed to rebound once it tagged the 50-dma. I would seriously consider buying calls on a bounce from here with a stop under today's low. Yet UNP is due to report earnings in a couple of days so discipline tells me to wait until after the earnings report.

Chart:

Entry  on   January 12 at $ 67.39 
Change since picked:       - 2.49 <-- stopped out @ 64.90 (-3.6%)
Earnings Date            01/21/10 (confirmed)
Average Daily Volume =        2.5 million    
Listed on   January 12, 2010