It was a very rough January for the market and investors are looking for the next level of support.


CALL Play Updates

Volatility Index - VIX - close: 24.62 change: +0.89 stop: 19.90

The VIX rebounded intraday as stocks began to falter. Naturally as the sell-off gathered steam the VIX's bounce did too. I would still consider new positions here. Bear in mind it could be a very bumpy ride. I'm listing a wide stop loss. We want to give it room to maneuver. Our first target to take profits is at $29.50. Our second target is $34.00.

Suggested Options:
Traders may want to consider the February calls. I'm suggesting the March $30 calls.

BUY CALL MAR 30.00 open interest=13,988 current ask $1.85
CBOE format: VIX1017C30

Annotated Chart:

Entry  on   January 28 at $ 23.73 
Change since picked:       + 0.89
Earnings Date            --/--/--
Average Daily Volume =          x million  
Listed on   January 28, 2010         


PUT Play Updates

Apple Inc. - AAPL - close: 192.06 change: -7.22 stop: 216.00

AAPL was not spared as the market headed lower into the weekend. Shares actually gapped open higher at $201.08, which provided a better entry point for our put positions. The "rally" attempt quickly failed and AAPL has now broken support at $200 and at the 100-dma. If you don't feel like chasing the stock here you could wait for another bounce toward $200 to buy puts. Otherwise I don't see any changes from our Thursday night comments.

We're going to give this trade lots of room with a wide stop since shares have been so volatile lately. Our first target to take profits is at $182.50. Our second target is $165.00 although we might exit at the 200-dma. This is an aggressive trade and I'm suggesting small positions.

Suggested Options:
On Thursday I suggested the March $180 puts.

Annotated Chart:

Entry  on   January 28 at $201.08 (small positions)/gap open entry
Change since picked:       - 9.82
Earnings Date            01/25/10 (confirmed)
Average Daily Volume =         26 million  
Listed on   January 28, 2010         


FEDEX Corp. - FDX - close: 78.35 change: -0.72 stop: 82.55

The early morning bounce in FDX failed at the 100-dma and shares closed at their lows for the session (and the month). I would still be tempted to open bearish positions here. I'm adding a second target. Our first target to take profits is at $75.25. Our second target is $72.00. More aggressive traders could aim for the 200-dma.

Suggested Options:
At this point I would consider the March $80 or $75 puts.

Annotated Chart:

Entry  on   January 25 at $ 79.45 
Change since picked:       - 1.10
Earnings Date            03/18/10 (unconfirmed)
Average Daily Volume =        3.0 million  
Listed on   January 23, 2010         


Gymboree - GYMB - close: 39.01 change: +0.51 stop: 42.75

I am more than a little surprised to see GYMB in positive territory on Friday. I couldn't find any company specific news to account for the relative strength. The RLX retail sector index was down, although not that much. Technically GYMB's trend is down but shares are oversold and could easily see a bounce. The $40 level and the 200-dma should be immediate resistance but if this fails then look for resistance at $42.00. Readers may want to wait on launching new positions. Our first target is $35.50. Our second, longer-term target is $32.00. Consider using small positions to limit your risk.

Suggested Options:
If you choose to launch positions now I would use the February $40 or March $35 puts.

Annotated Chart:

Entry  on   January 23 at $ 39.74 
Change since picked:       - 0.73
Earnings Date            03/04/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on   January 23, 2010         


Infosys Tech. - INFY - close: 51.91 change: -0.43 stop: 56.25

After breaking support on Thursday INFY continues to decline with another 0.8% drop on Friday. It's probably not too late to open positions but keep in mind that INFY is short-term oversold and due for a bounce. The stock could easily bounce at the 100-dma near $51.00. Broken support in the $54-55 zone should be new resistance so you may want to wait for a new failed rally under $55.00. Our first target is $50.15. Our second and final target is $46.50.

Suggested Options:
I am suggesting the Feb. $50 puts although March $50 puts would also work well.

Annotated Chart:

Entry  on   January 28 at $ 53.40
Change since picked:       - 1.49
Earnings Date            04/15/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on   January 25, 2010         


JPMorgan Chase - JPM - close: 38.94 change: -0.54 stop: 41.55

Once again the bounce in JPM has failed at resistance near $40.00 and its 200-dma. You could still argue shares are short-term oversold and due for a bigger bounce but investors remain very cautious on the banks. I would still consider new positions at current levels. If JPM breaks above $40 then look for resistance at the 50-dma near $42 (more aggressive traders may want to raise their stops). Our first target to take profits is at $35.25. Our second target is $32.00.

Suggested Options:
I'm suggesting the Feb. $38 put or the March $35 puts.

Annotated Chart:

Entry  on   January 26 at $ 38.44 
Change since picked:       + 0.50
Earnings Date            04/15/10 (unconfirmed)
Average Daily Volume =         46 million  
Listed on   January 26, 2010         


Mettler Toledo Intl. - MTD - close: 97.47 change: +0.13 stop: 102.25

We only have a few days left. MTD is due to report earnings on February 4th. We do not want to hold over the announcement. I hesitate to launch new positions given our time frame. Shares of MTD are trading between support at the 100-dma and resistance at $100 and its 50-dma (101.00). Our first target is $95.25. Our second target is $90.50.

Suggested Options:
No new positions at this time.

Annotated Chart:

Entry  on   January 22 at $ 99.40
Change since picked:       - 1.93
Earnings Date            02/04/10 (unconfirmed) 
Average Daily Volume =        134 thousand 
Listed on   January 21, 2010         


Retail Holders - RTH - close: 92.07 change: +0.27 stop: 95.05

Investors sold into strength on Friday when the RTH bounced toward its 50-dma. The failed rally move looks like a new entry point to buy puts. Our first target is the $87.00 level. The 200-dma will probably be support. The RTH moves kind of slow so make sure you use an option that gives you enough time.

Suggested Options:
I'm suggesting the March $90 puts. Readers may want to consider April puts.

Annotated Chart:

Entry  on   January 23 at $ 91.42 
Change since picked:       + 0.65
Earnings Date            --/--/--
Average Daily Volume =        1.7 million  
Listed on   January 23, 2010         


SIEMENS - SI - close: 89.11 change: -2.04 stop: 95.75 *new*

So far so good. The post-earnings bounce has reversed. Shares of SI are falling toward previous support. The Jan. 22nd low was $87.38. Our first target to take profits is at $87.55. I am adjusting our stop loss down to $95.75. Our second target is $81.00. Our time frame is three to four weeks.

Suggested Options:
I am not suggesting new positions at this time. Look for a new failed rally in the $93-94 zone.

Annotated Chart:

Entry  on   January 26 at $ 94.34 /gap higher entry
Change since picked:       - 5.23
Earnings Date            01/26/10 (confirmed)
Average Daily Volume =        368 thousand 
Listed on   January 26, 2010         


CLOSED BULLISH PLAYS

QUALCOMM Inc. - QCOM - cloes: 39.19 change: -1.29 stop: 39.40

Ouch! After a 14% crash on Thursday there was no bounce in shares of QCOM. The stock quickly fell through support at $40.00 and posted another 3.1% decline. Our stop loss was hit at $39.40. We knew this was going to be a very speculative trade and it didn't pan out.

Chart:

Entry  on   January 28 at $ 40.48 (very small positions)
Change since picked:       - 1.08 <-- stopped @ 39.40 (-2.6%)
Earnings Date            01/28/10 (confirmed)
Average Daily Volume =         18 million  
Listed on   January 28, 2010