The market's oversold bounce continues. We're starting to see stocks challenge and break support. We're updating several stop losses this weekend.


CALL Play Updates

Autozone Inc - AZO - close: 163.67 change: +0.48 stop: 157.90 *new*

AZO is hanging in there. While there wasn't much follow through on Thursday's intraday bounce the stock is still poised to move higher. We have just over a week before AZO reports earnings around March 2nd. Keep that in mind if you're thinking about launching new positions. I am raising our stop loss to $157.90. More conservative traders may want to consider a stop loss even closer to $160.00, which has proven to be short-term support.

Our first target to take profits is at $167.50. Our second, more aggressive target is $174.00 but that will require AZO to break through resistance in the $170 region.

Suggested Options:
I am suggesting the March $165 calls (AZO1020c165).

Annotated Chart:

Entry  on  February 16 at $161.75 (small positions)
Change since picked:       + 1.92
Earnings Date            03/02/10 (unconfirmed)
Average Daily Volume =        538 thousand 
Listed on  February 13, 2010         


Sears Holding - SHLD - close: 95.04 change: +0.64 stop: 91.75 *new*

SHLD bounced again with a 0.6% gain on Friday. I would like to suggest a new entry point on a dip but we're almost out of time. SHLD is due to report earnings on Feb. 23rd before the market opens. Since we don't want to hold over the report we have to exit on Monday at the closing bell. Due to our lack of time I am raising our stop loss to $91.75. If we're lucky SHLD will hit our target to exit a $97.45.

Suggested Options:
No new positions at this time.

Annotated Chart:

Entry  on  February 16 at $ 93.07 (small positions) /gap open entry
Change since picked:       + 1.97
Earnings Date            02/23/10 (unconfirmed)
Average Daily Volume =        1.7 million  
Listed on  February 16, 2010         


Sina Corp. - SINA - close: 37.80 change: -0.25 stop: 34.95

I am very surprised that shares of SINA did not show more weakness on Friday. The Hong Kong and Japanese markets plunged on Friday both falling more than 2%. Many expect the Chinese Shanghai market to trade down on Monday after a week long holiday since Chinese investors have not had a chance to react yet to the government's new rules on higher bank reserve requirements. If the Shanghai does decline I'm expecting SINA to dip toward support near $36.00 and its rising 200-dma. Our plan is to buy calls at $36.50. We'll use a stop at $34.95. If triggered our first target to take profits is at $39.95.

FYI: If SINA gaps open under $35.00 we will not open positions.

Suggested Options:
I am suggesting the March $37.50 or $40 calls.

BUY CALL MAR 37.50 (NOQ1020C37.5) open interest=1143 current ask $2.00
-or-
BUY CALL MAR 40.00 (NOQ1020C40) open interest=3927 current ask $0.95

Annotated Chart:

Entry  on  February xx at $ xx.xx <-- TRIGGER @ 36.50
Change since picked:       + 0.00
Earnings Date            03/15/10 (unconfirmed)
Average Daily Volume =        1.4 million  
Listed on  February 18, 2010         


United States Steel - X - close: 53.29 change: +2.33 stop: 48.95 *new*

Friday turned out to be a strong day for X with a 4.5% gain and a breakout past its 50-dma. The high was $53.58. Our second and final target is $54.00. More aggressive traders may want to aim higher! I am raising our stop loss to $48.95. I am not suggesting new positions at this time. Odds are decent that X will hit our final target on Monday.

Suggested Options:
No new positions at this time.

Annotated Chart:

Entry  on  February 13 at $ 49.23 (small positions)/gap higher entry
Change since picked:       + 4.06
                           /1st target hit @ 51.86 (gap open exit, +5.3%)
Earnings Date            04/27/10 (unconfirmed)
Average Daily Volume =       23.3 million  
Listed on  February 13, 2010         


PUT Play Updates

Apple Inc. - AAPL - close: 201.67 change: -1.26 stop: 206.26 *new*

I find it very interesting that AAPL under performed the market on Friday with a 0.6% decline. If stocks are so strong why is AAPL churning sideways the last three days? The $200.00 level is new short-term support again so I wouldn't consider new bearish positions until AAPL traded under $198.50. The 100-dma is at $199.00. Last week's high was about $204.40. I am lowering our stop loss down to $206.26. If we get stopped out more nimble traders may want to buy calls an aim for the highs near $215.

Our first target to take profits is at $182.50. Our second target is $165.00 although we might exit at the 200-dma. The plan was to use small positions to limit our risk.

Suggested Options:
No new positions at this time.

Annotated Chart:

Entry  on   January 28 at $201.08 (small positions)/gap open entry
Change since picked:       + 0.59
Earnings Date            01/25/10 (confirmed)
Average Daily Volume =         26 million  
Listed on   January 28, 2010         


Abbott Labs - ABT - close: 54.38 change: -0.59 stop: 55.05

I am very surprised we were not stopped out on Friday. Shares have been coiling under resistance at $55.00 but couldn't quite breakout. Then on Friday ABT raised their quarterly dividend by 10%. You'd think that would have sparked some buying interest. Instead the stock retreated. I am not suggesting new bearish positions at this time. Shares have very minor support at $54.00 and then again at the rising 100-dma. The BTK biotech index remains one of the strongest looking sectors even if it does look a little overbought and due for a dip.

Our first target was $50.15. More aggressive traders can target the 200-dma or support near $48.00.

Suggested Options:
No new bearish positions at this time.

Annotated Chart:

Entry  on  February 10 at $ 52.80
Change since picked:       + 1.58
Earnings Date            04/21/10 (unconfirmed)
Average Daily Volume =        7.5 million  
Listed on  February 09, 2010         


Franklen Resources Inc. - BEN - close: 101.61 change: +0.20 stop: 105.26

The oversold bounce in BEN continues but the trend is still down. I'm expecting shares to roll over under their descending 50-dma currently near 104.40. Wait for a failed rally before considering new bearish positions. The 200-dma has risen to $93.40 so I'm raising our target to exit to $95.00.

Suggested Options:
No new positions at this time.

Annotated Chart:

Entry  on   January 30 at $ 99.59 /gap higher entry point (small positions)
Change since picked:       + 2.02 
Earnings Date            01/28/10 (confirmed)
Average Daily Volume =        1.2 million  
Listed on   January 30, 2010         


Goldman Sachs - GS - close: 156.18 change: +0.45 stop: 156.05

Hmm... if you were the optimistic sort you could also claim that GS is forming a small bull-flag pattern this past week. Shares are still trading sideways inside the $150-160 zone. Right now we have a trigger to buy puts at $147.45. However, GS could really go either way (see our extra trigger below). If GS hits our trigger to buy puts at $147.45 we'll use a stop at $156.05 and our first target will be $138.00. FYI: Technical traders will note that the 50-dma has crossed under the 200-dma, which is normally a very bearish signal.

It looks like the path of least resistance is down but if GS does breakout over resistance the move higher could be sharp! We want to jump on board if it does. I'm suggesting another trigger to buy calls. If GS hits $163.00 we want to buy small call positions with a stop loss at $155.75. Our target will be $177.50. We'll use the March $170 calls.

Suggested Options:
If GS hits our trigger at $147.50 we want to use the March $140 puts.

Annotated Chart:

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         


Intl. Bus. Mach. - IBM - close: 127.19 change: -0.62 stop: 130.51

So far so good. IBM rallied toward resistance at its 50-dma just like we planned. Readers can still open put positions at current levels. I am suggesting a stop loss at $130.51. More conservative traders may want to use a tighter stop closer to $128.00 instead. Our first target is $122.00. Our second target is the 200-dma.

Suggested Options:
I am suggesting the March $125 puts.

Annotated Chart:

Entry  on  February 18 at $127.00
Change since picked:       + 0.19
Earnings Date            04/20/10 (unconfirmed)
Average Daily Volume =        8.2 million  
Listed on  February 03, 2010         


JPMorgan Chase - JPM - close: 40.03 change: -0.38 stop: 41.65

The bounce in JPM is still struggling near the $40 level and its 200-dma. The stock made it to $40.70 on Friday morning before rolling over near its 30-dma. On a very short-term basis the trend is up but you can still argue it's just an oversold bounce. I am suggesting readers wait for a new move under $39.50 before considering new bearish positions. Our first target to take profits is at $35.25. Our second target is $32.00.

Suggested Options:
If JPM provides a new entry point I would use the March $35 puts.

Annotated Chart:

Entry  on   January 26 at $ 38.44 
Change since picked:       + 1.59
Earnings Date            04/15/10 (unconfirmed)
Average Daily Volume =         46 million  
Listed on   January 26, 2010         


Mckesson Corp. - MCK - close: 60.75 change: +0.04 stop: 62.05 *new*

Traders bought the dip near $60.00 on Friday morning keeping the oversold bounce alive. I am cautious on MCK since the $60 level and the $60.50 region should have been stronger resistance. The last few updates I've been suggesting readers look for a failed rally near the 50-dma currently around $61.40. Please note that I am lowering our stop loss to $62.05. More conservative traders may want to lower their stop closer to the 50-dma. Our first target to take profits will be $54.00.

Suggested Options:
Wait for a failed rally or a new decline under $59.50 before launching positions. I'm suggesting the March $55 puts.

Annotated Chart:

Entry  on   January 30 at $ 58.82 
Change since picked:       + 1.93
Earnings Date            01/26/10 (confirmed)
Average Daily Volume =        2.8 million  
Listed on   January 30, 2010         


SIEMENS - SI - close: 88.23 change: -1.28 stop: 92.05

SI's relative weakness on Friday is encouraging. Most of the European markets were higher on Friday so it's nice to see SI underperforming. I am not suggesting new bearish positions at current levels although more aggressive traders might want to consider buying puts again and just use a stop loss closer to $90.00. SI has already hit our first target at $87.55. Our second and final target is $81.00.

Suggested Options:
No new positions at this time.

Annotated Chart:

Entry  on   January 26 at $ 94.34 /gap higher entry
Change since picked:       - 6.11
                            /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: 68.52 change: +0.41 stop: 69.26 *new*

We've been expecting UTX to bounce back toward $68.50 and/or its 50-dma. Currently the 50-dma is at $69.14. Thus we need to adjust our stop loss just a little but and move it higher. I'm placing the stop at $69.26. More aggressive traders may want to place their stop just above $70.00 instead. Look for this oversold bounce to reverse before launching new positions. Our target to take profits is $61.00 near the rising 200-dma.

Suggested Options:
Wait for a new entry point. Use the March $65 puts.

Annotated Chart:

Entry  on  February 04 at $ 66.38 
Change since picked:       + 1.73
Earnings Date            04/21/10 (unconfirmed)
Average Daily Volume =        5.1 million  
Listed on  February 04, 2010         


CLOSED BULLISH PLAYS

Freeport McMoran - FCX - close: 77.16 change: +0.56 stop: 71.95

Target achieved. FCX rallied to $77.88 and tagged resistance at its 50-dma like we expected. Our second and final target to take profits was at $77.25. I would keep FCX on your watch list. We might get another opportunity to trade is soon. Look for support near $70 and its 200-dma and resistance in the $78-80 zone.

Chart:

Entry  on  February 06 at $ 70.23 
Change since picked:       + 7.02 <- 2nd target hit @ 77.25 (+9.9%)
                                /take profits now @ 74.17 (+5.6%)
Earnings Date            04/22/10 (unconfirmed)
Average Daily Volume =       20.6 million  
Listed on  February 06, 2010