Editor's Note:

Over the weekend I said the bullish reversal on Friday needs to see confirmation on Monday. That did not happen. There was no confirmation and stocks look poised to drop!


CALL Play Updates

Freeport McMoran - FCX - close: 69.20 change: -1.03 stop: 65.85

Wow! The lack of follow through on Friday's bounce is really bearish. FCX has produced a new lower high with today's failure. This was labeled an aggressive trade and more conservative traders may want to seriously consider an early exit immediately! I am not suggesting new bullish positions unless we see FCX bounced from $66.50 again. We want to use small positions. Out first target to take profits is at $74.75. Our second target is the 100-dma near $77.50.

Entry  on  February 06 at $ 70.23 
Change since picked:       - 1.03
Earnings Date            04/22/10 (unconfirmed)
Average Daily Volume =       20.6 million  
Listed on  February 06, 2010         


Teva Pharmaceutical - TEVA - close: 56.92 change: +0.16 stop: 54.95

TEVA managed to outperform the market with a minor gain. I remain cautious. Readers may want to up their stop loss toward the 50-dma near $55.80. This should be a short-term trade. TEVA reports earnings on Feb. 16th and we do not want to hold over the announcement. Our short-term target to take profits is at $59.50. Our second target is $61.50.

Entry  on  February 02 at $ 57.58 
Change since picked:       - 0.66
Earnings Date            02/16/10 (confirmed)
Average Daily Volume =        6.0 million  
Listed on  February 02, 2010         


PUT Play Updates

Apple Inc. - AAPL - close: 194.12 change: -1.34 stop: 210.51

The bounce in AAPL is failing near its 10 and 100-dma. This could be used as a new bearish entry point. More conservative traders may want to lower their stops closer to $206.

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.

Entry  on   January 28 at $201.08 (small positions)/gap open entry
Change since picked:       - 6.96
Earnings Date            01/25/10 (confirmed)
Average Daily Volume =         26 million  
Listed on   January 28, 2010         


Franklen Resources Inc. - BEN - close: 96.30 change: -1.70 stop: 106.80

Financials continue to underperform. Shares of BEN saw zero follow through on its Friday bounce. Shares gave up another 1.7%. The path of least resistance is down. Our target to exit is $92.50.

Entry  on   January 30 at $ 99.59 /gap higher entry point (small positions)
Change since picked:       - 3.29
Earnings Date            01/28/10 (confirmed)
Average Daily Volume =        1.2 million  
Listed on   January 30, 2010         


Gymboree - GYMB - close: 40.76 change: +0.10 stop: 42.26

GYMB is still advancing but shares stalled at their 50-dma this morning. The very short-term trend is up but I'm expecting this rally to reverse in the $42.00 region. Over the weekend we moved the stop loss down to $42.26. Today's move could be the failed rally at $42 we're looking for as a new entry point. More conservative traders could wait for a new drop under $40.00 to launch positions. Our first target is $35.50. Our second, longer-term target is $32.00. Consider using small positions to limit your risk.

Entry  on   January 23 at $ 39.74 
Change since picked:       + 1.02
Earnings Date            03/04/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on   January 23, 2010         


Intl. Bus. Mach. - IBM - close: 121.88 change: -1.09 stop: 131.55

The lack of any follow through for IBM's bounce on Friday is very bearish and shares set a new relative closing low today. I do think IBM is going lower. However, I suspect that the $120 level and the 200-dma near $118 could be support. The risk-reward to buy puts now doesn't seem very attractive. More aggressive traders may want to go ahead. I'm sticking to the plan and waiting for another failed rally/bounce we can short. Currently the trigger to buy puts is at $127.75. If triggered at $127.75 our first target is $122.00. Our second target is the 200-dma.

Entry  on  February xx at $ xx.xx <-- TRIGGER @ 127.75
Change since picked:       + 0.00
Earnings Date            04/20/10 (unconfirmed)
Average Daily Volume =        8.2 million  
Listed on  February 03, 2010         


Infosys Tech. - INFY - close: 51.12 change: +0.19 stop: 55.15

INFY eked out a gain today but shares failed at short-term resistance near $52.00. The stock looks poised to retest its lows from Friday.

Currently the plan is to open new put positions on a bounce to $54.50. If triggered on this new trade we'll take profits again at $50.15 and $46.50.

-2nd Entry-
Entry  on  February 00 at $ 00.00 <-- trigger @ 54.50
Change since picked:       - 0.00

-1st Entry Closed-
Entry  on   January 28 at $ 53.40
Change since picked:       - 2.47 <-- early exit @ 50.93 (-4.6%)
                            /1st target hit @ 50.15 (-6.0%)
Earnings Date            04/15/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on   January 25, 2010         


JPMorgan Chase - JPM - close: 37.70 change: -0.60 stop: 41.65

There was zero follow through on the bounce in JPM. Shares opened weak and spent the day churning sideways to close with a 1.5% loss. This is good news for our put play. Our first target to take profits is at $35.25. Our second target is $32.00.

Entry  on   January 26 at $ 38.44 
Change since picked:       - 1.44
Earnings Date            04/15/10 (unconfirmed)
Average Daily Volume =         46 million  
Listed on   January 26, 2010         


Mckesson Corp. - MCK - close: 58.31 change: -0.03 stop: 62.51

The bounce in MCK may not be over yet. I am suggesting we look for new bearish positions on a bounce near $60.00 or the 50-dma. Our first target to take profits will be $54.00.

Entry  on   January 30 at $ 58.82 
Change since picked:       - 0.51
Earnings Date            01/26/10 (confirmed)
Average Daily Volume =        2.8 million  
Listed on   January 30, 2010         


Retail Holders - RTH - close: 90.60 change: +0.04 stop: 94.10

The RTH managed a gain but today was anything but bullish. The bounce failed at the 10-dma and shares were sliding lower into the close. This looks like another bearish 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.

Entry  on   January 23 at $ 91.42 
Change since picked:       - 0.82
Earnings Date            --/--/--
Average Daily Volume =        1.7 million  
Listed on   January 23, 2010         


SIEMENS - SI - close: 84.80 change: -0.67 stop: 94.05

The oversold bounce in SI has stalled at the $86.00 level. I'm not suggesting new positions at this time.

Our second and final target is $81.00. More aggressive traders may want to aim lower.

Entry  on   January 26 at $ 94.34 /gap higher entry
Change since picked:       - 9.54
                            /1st target hit @ 87.55 (-7.1%)
Earnings Date            01/26/10 (confirmed)
Average Daily Volume =        368 thousand 
Listed on   January 26, 2010         


United Technology - UTX - close: 65.40 change: -1.10 stop: 69.05

The bounce in UTX has already failed under its 100-dma. This looks like another entry point for bearish positions. Our target to take profits is $61.00, just above the simple 200-dma. Our time frame is just two or three weeks.

Entry  on  February 04 at $ 66.38 
Change since picked:       - 0.98
Earnings Date            04/21/10 (unconfirmed)
Average Daily Volume =        5.1 million  
Listed on  February 04, 2010         


CLOSED BULLISH PLAYS

Intl Bus. Mach. - IBM - close: 121.88 change: -1.09 stop: 121.49

We have IBM on the newsletter as a put play with a trigger to buy puts on a bounce near resistance. Instead of waiting for the bounce to happen we added this call play to try and profit from the rebound. Unfortunately, no rebound occurred. IBM has erased Friday's afternoon rebound and look poised to breakdown. I'm hitting the "eject" button and suggesting an early exit immediately.

Chart:

Entry  on  February 06 at $123.52 
Change since picked:       - 1.09 <-- exit early (-0.88%)
Earnings Date            04/20/10 (unconfirmed)
Average Daily Volume =        8.3 million  
Listed on  February 06, 2010         


U.S.Steel - X - close: 44.09 change: -0.64 stop: 42.25

The oversold bounce in X has already rolled over. The lack of follow through on Friday's rebound is very bearish. I still think X is very oversold and due for a larger correction higher but today's action is negative. I'm suggesting an early exit immediately. More aggressive traders can let it ride and hope for a bounce from the 200-dma. I'd keep X on your watch list. We'll probably see another opportunity soon. This was labeled an aggressive trade with small positions to limit our risk.

Chart:

Entry  on  February 06 at $ 44.78 (small positions)
Change since picked:       - 0.64 <-- exit early $ 44.09 (-1.4%)
Earnings Date            04/27/10 (unconfirmed)
Average Daily Volume =       22.4 million  
Listed on  February 06, 2010