Editor's Note:

Stocks produced a relief rally thanks to news of a "resolution" for the Greek debt problem. Details of the EU aid package were few and far between but that didn't stop stocks from another oversold bounce. We are right back where we were several days ago where stocks look poised to rally higher but have stalled at short-term resistance.

Nimble traders could try playing the upside with some very short-term trades but I suspect this bounce will fail and we will eventually use it as a new entry point to launch bearish positions.

Investors are nervous and the one thing Wall Street hates the most is the unknown.


CALL Play Updates

Freeport McMoran - FCX - close: 74.17 change: +3.14 stop: 68.75 *new*

Take profits now! Just as we anticipated, positive news over the Greece situation buoyed the euro, pushed the dollar lower, and lifted commodities. This gave FCX a boost with a 4.4% gain and a breakout to new very short-term relative highs. The stock is facing potential round-number resistance near $75.00. The real challenge is the converging 50 and 100-dma near $78.00.

Our first target was $74.75. The high today was $74.73. I am suggesting we go ahead and take profits now. Our second target is unchanged at $77.50. Please note I'm moving the stop loss up to $68.75.

Chart:

Entry  on  February 06 at $ 70.23 
Change since picked:       + 3.94
                                /take profits now @ 74.17 (+5.6%)
Earnings Date            04/22/10 (unconfirmed)
Average Daily Volume =       20.6 million  
Listed on  February 06, 2010         


Teva Pharmaceutical - TEVA - close: 58.30 change: +1.44 stop: 56.45 *new*

TEVA is finally starting to show some strength again. The stock gained 2.5% to set a new short-term relative high at $58.78 intraday. We're almost out of time. TEVA reports earnings on the morning of Feb. 16th and we don't want to hold over the report. Unfortunately the market is closed on Monday. That means we have to exit tomorrow (Friday) at the closing bell. I am raising our stop loss to $56.45. Our short-term target to take profits is at $59.50.

Entry  on  February 02 at $ 57.58 
Change since picked:       + 0.72
Earnings Date            02/16/10 (confirmed)
Average Daily Volume =        6.0 million  
Listed on  February 02, 2010         


PUT Play Updates

Apple Inc. - AAPL - close: 198.67 change: +3.55 stop: 210.51

AAPL delivered a nice bounce with a 1.8% gain and a breakout above its very short-term trend of lower highs. The rally stalled near its 100-dma and the $200 level and shares still have overhead resistance near the 50-dma (201.70). If you study an intraday chart AAPL should have resistance near $200, 205 and 210 so pick your level of resistance to watch. 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:       - 2.41
Earnings Date            01/25/10 (confirmed)
Average Daily Volume =         26 million  
Listed on   January 28, 2010         


Abbott Labs - ABT - close: 53.54 change: +0.28 stop: 55.05

ABT is trying to bounce but only managed a 0.5% gain versus a nearly 1% rally in the S&P 500. Look for resistance near $54 and its 50-dma (54.25). I'd wait for the bounce to roll over before initiating new positions. our first target is $50.15. More aggressive traders can target the 200-dma or support near $48.00.

Entry  on  February 10 at $ 52.80
Change since picked:       + 0.74
Earnings Date            04/21/10 (unconfirmed)
Average Daily Volume =        7.5 million  
Listed on  February 09, 2010         


Franklen Resources Inc. - BEN - close: 97.99 change: +0.69 stop: 106.80

BEN is still churning sideways. This time the financials under performed the rest of the market. BEN managed a gain but it wasn't very impressive. We can still look for resistance near $100 or the 50-dma (105.21). Our target to exit is $92.50.

Entry  on   January 30 at $ 99.59 /gap higher entry point (small positions)
Change since picked:       - 1.60
Earnings Date            01/28/10 (confirmed)
Average Daily Volume =        1.2 million  
Listed on   January 30, 2010         


General Dynamics - GD - close: 67.80 change: +0.16 stop: 70.55

I don't see any changes from my Wednesday comments. GD recovered from its morning lows but the trend is unchanged. Look for short-term resistance near the 50-dma (68.62). If that breaks then look for a new lower high to form under $70.00. Readers may want to wait for the bounce to stall or fail before launching positions. There is potential support at $65 and the exponential 200-dma but we want to aim for the simple 200-dma near $61.85. We'll set our actually exit price at $62.60.

Entry  on  February 10 at $ 67.64
Change since picked:       + 0.16
Earnings Date            04/28/10 (unconfirmed)
Average Daily Volume =        2.4 million  
Listed on  February 10, 2010         


Goldman Sachs - GS - close: 154.05 change: +0.42 stop: 156.05

It was painfully obvious that the financials did not participate in the bounce on Thursday. Shares of GS only managed a 0.2% gain and remains in its sideways consolidation. We are still waiting for a breakdown. I am suggesting a trigger to buy puts at $147.45. If triggered our first target to take profits is at $138.00.

Entry  on  February xx at $ xx.xx <-- TRIGGER @ 147.45
Change since picked:       + 0.00
Earnings Date            04/13/10 (unconfirmed)
Average Daily Volume =         17 million  
Listed on  February 00, 2010         


Gymboree - GYMB - close: 41.85 change: +0.03 stop: 42.26

Something happened this morning that caused shares of GYMB to gap open lower and spike down toward $40.00. Unfortunately I can't find the news behind the move. Traders bought the dip at $40.00 and GYMB rallied back into positive territory. I'm still a little perplexed by this stock's recent strength. If there is any follow through tomorrow we should get stopped out. A failure at $42.00 could be used as a new entry point. 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:       + 2.11
Earnings Date            03/04/10 (unconfirmed)
Average Daily Volume =        513 thousand 
Listed on   January 23, 2010         


Intl. Bus. Mach. - IBM - close: 123.73 change: +0.92 stop: 131.55

IBM is still trying to bounce from the $122 level. If the stock does continue to rebound we can watch for resistance near $126 and then at the 50-dma near $128. I am lowering our trigger to buy puts from $127.75 to $127.00.

If triggered at $127.00 our first target is $122.00. Our second target is the 200-dma.

Entry  on  February xx at $ xx.xx <-- TRIGGER @ 127.00
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: 54.27 change: +1.16 stop: 55.15

Our new trigger to buy puts on INFY has been hit at $53.90. Shares managed to rally past $54.00 and close near its 50-dma. If there is any follow through we can expect shares to trade toward $55.00. If you haven't launched new positions yet I'd wait for the bounce to stall or roll over under $55 first. Our first target is $50.15. Our second target is $46.50. The plan was to use the March $50 puts.

Chart:

-2nd Entry-
Entry  on  February 11 at $ 53.90
Change since picked:       + 0.37
Earnings Date            04/15/10 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on   January 25, 2010         


JPMorgan Chase - JPM - close: 39.02 change: +0.15 stop: 41.65

Banking stocks in Europe did not react well to the Greece aid-package news. Financials here in the U.S. also under performed the rest of the market. JPM eked out a very small gain and remains under resistance at $40.00 and its 200-dma. If the rebound continues look for a failed rally near $40 as a new entry point. 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:       + 0.58
Earnings Date            04/15/10 (unconfirmed)
Average Daily Volume =         46 million  
Listed on   January 26, 2010         


Mckesson Corp. - MCK - close: 58.99 change: +0.38 stop: 62.51

MCK is still trying to bounce. I don't see any changes from my prior comments. Look for resistance near $60.00 and the 50-dma near $61.50. Our first target to take profits will be $54.00.

Entry  on   January 30 at $ 58.82 
Change since picked:       + 0.17
Earnings Date            01/26/10 (confirmed)
Average Daily Volume =        2.8 million  
Listed on   January 30, 2010         


MEDCO Health Solutions - MHS - close: 62.78 change: +0.82 stop: 64.26

Our new put play on MHS is now open. Shares hit our trigger to buy puts at $62.75 late this afternoon. More conservative traders can wait for the bounce to stall or roll over. Look for resistance at the 50-dma near $63.70. The plan was to use March $60 puts. Our first target is $57.50.

Chart:

Entry  on  February 11 at $ 62.75 
Change since picked:       + 0.03
Earnings Date            02/23/10 (unconfirmed)
Average Daily Volume =        3.2 million  
Listed on  February 09, 2010         


Retail Holders - RTH - close: 91.89 change: +0.81 stop: 94.10

Retail stocks are bouncing. Technically today's gain has produced a bullish engulfing candlestick (reversal) pattern although these patterns usually need to see confirmation first. I would still expect to see resistance in the $93-94 range with the 50-dma at $93.40. 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:       + 0.47
Earnings Date            --/--/--
Average Daily Volume =        1.7 million  
Listed on   January 23, 2010         


SIEMENS - SI - close: 87.13 change: +0.70 stop: 94.05

The bounce in SI was not very impressive but shares did rebound from their rising 200-dma and the $85.00 level. We may want to consider an early exit right here, especially if you think the market is going to see a significant rebound. Personally, I'm expecting any bounce to fail. SI should have resistance near $90 and near $92 (50-dma). I am 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:       - 7.21
                            /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: 66.71 change: +0.07 stop: 69.05

UTX is not making much progress. Shares remain under their 10 and 100-dma in spite of the bounce. However, even if UTX does break above this technical resistance the stock should see additional resistance near $68.00. Wait for the bounce to roll over before launching new 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:       + 0.33
Earnings Date            04/21/10 (unconfirmed)
Average Daily Volume =        5.1 million  
Listed on  February 04, 2010