Editor's Note:

The stock market refuses to correct. We're starting to see some new entry points in our current portfolio. I'm suggesting new yet small positions in FDX, GS, and JNPR. Plus we can launch new positions in RIG and UNP.

-James

Current Portfolio:


CALL Play Updates

Cummins Inc. - CMI - close: 108.51 change: -0.11

Stop Loss: 98.40
Target(s): 108.25 114.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/16 update: CMI is consolidating sideways in the $107-110 zone. Currently our plan is to buy calls on a dip at $102.50 but we might need to adjust that trigger higher into the $104-105 area. For now we'll keep our trigger at $102.50.

We want to start with small positions! Consider only buying half your normal position size. Just in case the correction pulls CMI toward the 50-dma we want to have some cash on the sidelines to double down near the 50-dma.

Trigger @ $102.50

- Suggested Position -
Buy the 2011 January $105 calls (CMI1122A105)

- or -

Buy the 2011 March $110 calls (CMI1119C110)

Entry on December xxth at $ xx.xx
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on December 11th, 2010


CSX Corp. - CSX - close: 63.95 change: +0.87

Stop Loss: 59.75
Target(s): 67.00, 69.50
Current Option Gain/Loss: - 9.1% and - 4.4%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/16 update: Railroad stocks appear to have produced what looks like a bullish reversal today but we probably need to see some follow through to confirm it. Shares of CSX rallied from short-term support near $63.00 again. While I would prefer to launch new positions on a dip near $62 we could use today's bounce as a new entry point. You may want to start with a smaller position size to limit your risk.

- Current Positions - (We only have a small position open)

Buy the 2011 January $65 calls (CSX1122A65) Entry @ $1.75

- or -

Buy the 2011 February $65 calls (CSX1119B65) Entry @ $2.49

12/13: CSX opened at $64.39
12/11: New Entry Point Strategy. Buy half now.
12/11: New targets: 67.00, 69.50
12/02: New trigger @ 62.50.
12/01: New trigger @ 62.25, New stop @ 59.90, New targets.

Entry on December 13th at $64.39
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 5.9 million
Listed on November 23rd, 2010


CenturyLink, Inc. - CTL - close: 45.44 change: -0.35

Stop Loss: 43.75
Target(s): 44.90, 47.25
Current Option Gain/Loss: +425.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/16 update: CTL is acting normal here with shares pulling back after its strong mid-December rally. The stock found some support near $45 midday. I am still expecting a correction toward what should be stronger support near $44.00. I am not suggesting new positions at this time. Our final target to exit is $47.25.

FYI: Investors should know that CTL is currently involved with a $10.6 billion stock-swap merger with Qwest Communications (Q). The merger isn't supposed to be completed until the first half of 2011. The trend for both stocks is up and naturally looks very similar following the M&A announcement.

Current Position:
Long the 2011 January $45.00 calls (CTL1122A45) Entry @ 0.20

12/14: New stop loss @ 43.75
12/13: First Target Hit @ $44.90, option @ $0.85 (+325%)
12/01: Adjusted secondary target to $49.00

Entry on November 29th at $42x55
Earnings Date 02/22/11
Average Daily Volume = 3.0 million
Listed on November 27th, 2010


Express Scripts - ESRX - close: 54.61 change: +0.38

Stop Loss: 51.25
Target(s): 53.95, 57.25
Current Option Gain/Loss: +38.0%
Time Frame: 5 to 6 weeks
New Positions: Yes, see below

Comments:
12/16 update: ESRX managed a bounce but shares are stuck in the $54-55 trading range. Given the market's strength we may want to consider launching new positions on a breakout past $55.00 instead of waiting for a dip toward $52.00. The stock's 50-dma has risen to $51.44. I am raising our stop loss to $51.25.

We currently only have half a position open.

Current Position:
Long the 2011 January $52.50 calls (ESRX1122A52.5) Entry @ $2.10

12/16: New stop loss @ 51.25
12/07: Exit the December calls. option @ $2.01 (+64.7%)
12/01: First Target Hit @ $53.95. Dec's @ $2.20 (+80.3%). Jan's @ $3.10 (+47.6%)

Entry on November 18th at $51.81
Earnings Date 02/24/11
Average Daily Volume = 4.3 million
Listed on November 17th, 2010


Fastenal Co. - FAST - close: 59.18 change: +0.04

Stop Loss: 53.75
Target(s): 59.75, 62.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/16 update: FAST did not participate in the market's rebound on Thursday. Shares remain overbought and look ready to correct lower. I'm expecting support at $56.00. We have a trigger to buy calls at $56.00. Conservative traders could wait for a dip closer to $55 or $54 before launching positions. If triggered our first target is $59.75.

FYI: FAST announced a special, one-time cash dividend of 42-cents on November 18th and all of the option strikes have been adjusted for this 42-cent dividend.

Trigger @ 56.00

Suggested Positions:
Buy the 2011 January $54.58 calls (FAST1122A54.58)

- or -

Buy the 2011 February $59.58 calls (FAST1119B59.58)

Entry on December xxth at $ xx.xx
Earnings Date 01/19/11 (unconfirmed)
Average Daily Volume = 880 thousand
Listed on December 8th, 2010


FedEx Corp. - FDX - close: 94.22 change: +1.83

Stop Loss: 90.90
Target(s): 96.75, 99.75
Current Option Gain/Loss: + 0.0% d
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/16 update: We were expecting FDX to see some volatility today but shares didn't see quiet enough volatility for us. The stock opened lower and dipped to $91.28 after FDX missed the earnings estimates. Wall Street was expecting $1.31 and FDX only delivered $1.16. Revenues were a miss at $9.63 billion versus the $9.7 billion estimate. However, the company raised their 2011 guidance from the $4.80-5.25 zone to the $5.00-5.30 range. This positive outlook fueled the big bounce in shares of FDX (and UPS for that matter).

While I would still rather wait for a dip toward stronger support at $90.00 we may not see that opportunity this year. I am suggesting a more aggressive entry point to buy calls now! let's start with small positions at least half of your normal trade size. We'll move our stop loss to $90.90 (today's low was $91.28). Our first target to take profits is $96.75. Our second target is $99.75. I am updating our strike prices below.

Option small positions now.

- Suggested Position -

Buy the 2011 January $100.00 call (FDX1122A100) current ask $0.84

- or

Buy the 2011 April $100 call (FDX1116D100) current ask $3.15

12/16: Adjusted Entry - initiate small positions now (@ Friday's open)

Chart:

Entry on December 17th at $ xx.xx
Earnings Date 12/16/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on November 29th, 2010


Goldman Sachs - GS - close: 164.46 change: -0.75

Stop Loss: 159.75
Target(s): 171.00, 179.50
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/16 update: Attention! I am adjusting our entry point strategy on GS. We have been waiting for a dip to $163.00 but the stock only fell to $163.21 intraday. We want to go ahead and buy calls now on this pull back. More conservative traders can go ahead and wait and hope for a pull back closer to $163, 162 or even the $160 levels. We will start this play with small positions (half your normal trade size or less) to limit our risk. I am moving our stop loss to $159.75. Our first target is $171.00. Our second target is $179.50.
FYI: The Point & Figure chart for GS is forecasting a very bulilsh $224 long-term target.

New Entry Point Now! Small Positions

- -Suggested Positions -

Buy the 2011 January $170 calls (GS1122A170) current ask $2.83

- or -

Buy the 2011 April $175 calls (GS1116D175) current ask $5.50

12/16: Adjusted Entry - initiate small positions now (@ Friday's open)

Chart:

Entry on December 17th at $ xx.xx
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 7.2 million
Listed on December 2nd, 2010


International Business Machines - IBM - close: 144.55 change: -0.17

Stop Loss: 142.99
Target(s): 149.90, 157.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/16 update: It was another mild day for IBM with shares trading in a narrow range. The lack of participation in the market's rebound is a bit odd. I don't see any changes from my prior comments. I'm suggesting a trigger to buy calls at $146.75. FYI: The Point & Figure chart on IBM is forecasting a long-term target of $196.

Breakout Trigger @ $146.75

- Suggested Positions -

Buy the 2011 January $150 calls (IBM1122A150)

- or -

Buy the 2011 April $155 calls (IBM1116D155)

Entry on December xxth at $ xx.xx
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 4.7 million
Listed on December 14th, 2010


Juniper Networks - JNPR - close: 36.70 change: +0.77

Stop Loss: 34.90
Target(s): 39.75
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/16 update: We are changing our entry point strategy on JNPR. The stock continues to show relative strength and added +2.1% today. As much as I don't like to "chase" a move shares of JNPR looks poised to rally through the rest of this year. I am suggesting we launch small positions now (only half your normal trade size) to limit our risk. We'll move the stop loss to $34.90 since $35.00 should be support. Our first target is $39.75. Please note that I have adjusted our option strikes.

Initiate small positions now!

- Suggested Position -
Buy the 2011 January $38.00 calls (JNPR1122A38) current ask $0.81

- or -

Buy the 2011 April $40.00 calls (JNPR1116D40) current ask $1.45
12/16: Adjusted Entry - initiate small positions now (@ Friday's open)

Chart:

Entry on December 17th at $ xx.xx
Earnings Date 01/25/11 (unconfirmed)
Average Daily Volume = 5.5 million
Listed on December 11th, 2010


Nike Inc. - NKE - close: 89.23 change: +0.65

Stop Loss: 85.75
Target(s): 89.50, 94.50
Current Option Gain/Loss: +88.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/16 update: NKE delivered a bullish session with traders buying the dip near short-term support near the $88 area. If the market cooperates I would look for NKE to set new closing highs over $90.00 tomorrow. I am raising our stop loss to $85.75. Currently I am leaning towards an early exit ahead of NKE's earnings report next week. At the moment our final target is $94.50.

(Second position) Current Position:
Long the January $85.00 CALLS (symbol:NKE1122A85) Entry @ $2.78

12/16/10 New stop loss $85.75
12/13/10 Target Hit @ $89.64 (gap higher), option @ $5.51 (+98.2%)
12/13/10 New stop loss $83.90
12/11/10 New stop loss $83.49
12/07/10 Exit the December calls, option @ $2.25 (+95.6%)
12/01/10 New stop loss @ 82.45
11/30/10 Readers may want to exit December options early for a gain
11/30/10 Entry on January calls @ $2.78
11/29/10 Buy the bounce from $84.00
11/24/10 Target hit @ 86.75, Dec. option @ $2.60 (+126%)

Entry on November 11th at $83.00
Earnings Date 12/21/10
Average Daily Volume = 2.3 million
Listed on November 6th, 2010


Oceaneering International - OII - close: 73.80 change: +0.76

Stop Loss: 67.75
Target(s): 74.80, 79.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/16 update: We have to consider the possibility that the market will not correct lower between now and yearend. That has me looking for an alternative entry point on OII. Shares have resistance near $74.00. I'm not changing our entry point yet but a close over the $74.00 or $75.00 levels might change my mind on buying into strength. For now our entry point remains $70.25.

Trigger to buy @ $70.25

Suggested Position: Buy the 2011 January $75 calls (OII1122A75)

- or -

Suggested Position: Buy the 2011 April $75 calls (OII1116D75)

Entry on December xxth at $ xx.xx
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume = 584 thousand
Listed on December 4th, 2010


Transocean Ltd. - RIG - close: 69.31 change: -2.58

Stop Loss: 66.25
Target(s): 72.50, 78.25
Current Option Gain/Loss: -15.9% and + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/16 update: Is today's drop in RIG a delayed reaction to the U.S. civil suit news from yesterday? I don't think so. The stock was downgraded this morning. This pull back hit $68.53 at its lows. Personally, I see this dip as a new entry point to buy calls. Granted the news yesterday about the U.S. listing RIG as a defendant in a civil suit as they take BP to court does raise the uncertainty factor on this trade.

I am suggesting we buy calls on this dip (see below). If you're feeling nervous then consider a higher stop closer to $67.00 or $68.00. Our stop remains at $66.25. Our final target is $78.25.

- Current Positions -
Long the 2011 January $70.00 calls (RIG1122A70) Entry @ $2.95

- Second Position -
Long the 2011 February $75.00 calls (RIG1119B75) current ask $1.80

12/16/10 New Entry Point (buy February calls) - buy the dip.
12/11/10 New target 78.25, new stop loss $66.25
12/03/10 Target hit @ $72.50, option @ $4.95 (+67.7%)

Chart:

Entry on November 30th at $68.18
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 6.3 million
Listed on November 29th, 2010


Sherwin-Williams Co. - SHW - close: 81.97 change: +0.97

Stop Loss: 74.85
Target(s): 79.90, 84.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/16 update: SHW continues to outperform. Currently our plan is to buy calls on a dip at $77.00. I'm adjusting our stop loss to $74.85. I did adjust our option strikes.

Trigger @ $77.00 <-- new trigger

Suggested Positions:

Buy the 2011 January $80.00 calls (SHW1122A80)

- or -

Buy the 2011 March $85.00 calls (SHW1119C85)

Entry on December xxth at $ xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 675 thousand
Listed on December 9th, 2010


Union Pacific - UNP - close: 92.29 change: +0.85

Stop Loss: 89.75
Target(s): 96.25, 99.75
Current Option Gain/Loss: + 0.0% and +0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/16 update: The action in UNP today looks like a new entry point to buy calls. Shares dipped to $90.52 and bounced. I'm suggesting we initiate new positions here. Cautious traders could wait another day to see if UNP can break the very short-term trend of lower highs. Please note I am raising our stop loss to $89.75.

- Current position -
Suggested Position:
Buy the 2011 January $95 calls (UNP1122A95) Entry @ $1.52

Second Position
Buy the 2011 February $95 calls (UNP1119B95) current ask $2.65

12/16/10: New Entry point: buy February calls
12/16/10: New stop loss @ 89.75

Chart:

Entry on November 30th at $89.83
Earnings Date 01/20/11
Average Daily Volume = 2.9 million
Listed on November 20th, 2010


United Parcel Service - UPS - close: 73.76 change: +1.51

Stop Loss: 66.85
Target(s): 74.75, 78.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/16 update: UPS soared to new relative highs following the positive earnings guidance from rival FDX. I still don't want to chase this move in UPS but we will consider raising our entry point trigger. For the moment we'll leave our trigger at $70.25 but I'm looking at raising our buy-the-dip trigger toward $72.25.

Trigger @ 70.25

Suggested Position:
Buy the 2011 January $70.00 call (UPS1122A70)

- or -

Buy the 2011 April $75.00 call (UPS1116D75)

Entry on December xxth at $ xx.xx
Earnings Date 02/01/10 (unconfirmed)
Average Daily Volume = 3.9 million
Listed on December 6th, 2010


United Technology Corp. - UTX - close: 79.02 change: +0.07

Stop Loss: 73.90
Target(s): 81.50, 84.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/16 update: Shares of UTX are consolidating in a narrow range. Aggressive traders may want to consider a breakout trigger to buy calls on a move over $79.50 or $80.00. Currently our plan is to buy calls on a dip at $77.10. Cautious traders could wait for a pull back closer to $76.00 or even $75.00.
FYI: The Point & Figure chart is bullish with a $91 target for UTX.

Trigger to buy calls @ $77.10

Suggested Position: Buy the 2011 January $80 calls (UTX1122A80)

- or -

Suggested Position: Buy the 2011 February $80 calls (UTX1119B80)

Entry on December xxth at $ xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 3.2 million
Listed on December 4th, 2010


Vulcan Materials Co. - VMC - close: 47.33 change: +0.94

Stop Loss: 39.95
Target(s): 47.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/16 update: VMC bounced with the rest of the market. We are still waiting for a correction. Our plan is to buy calls on a dip at $43.75 but we might want to raise that trigger above $44.00 and possible support at the simple 200-dma.

Trigger @ $43.75

Suggested Position: Buy the 2011 January $45 calls (VMC1122A45)

- or -

Buy the 2011 February $45 calls (VMC1119B45)

Entry on December xxth at $ xx.xx
Earnings Date 02/07/11 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 13th, 2010


Cimarex Energy Co. - XEC - close: 88.40 change: +1.10

Stop Loss: 79.85
Target(s): 87.40, 89.90
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/16 update: The strength in XEC today is encouraging. We may want to consider buying calls on a close over its current all-time high at $88.69. For the moment we'll keep our buy the dip trigger but we may see a new breakout entry point tomorrow.

Trigger @ 84.00

Suggested Position:
Buy the 2011 January $85 calls (XEC1122A85)

- or - Buy the 2011

Entry on December xxth at $ xx.xx
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume = 907 thousand
Listed on December 1st, 2010


PUT Play Updates

Expedia Inc. - EXPE - close: 25.98 change: +0.29

Stop Loss: 27.75
Target(s): 25.10, 24.25
Current Option Gain/Loss: + 8.3%
Time Frame: 2 to 3 weeks
New Positions: No

Comments:
12/16 update: EXPE is still consolidating sideways in the $25.50-26.25 zone. There is no change from my prior comments. I am not suggesting new bearish positions at current levels. We have two targets. Our first target is $25.10.

Current Position: Buy the 2011 January $25 Put (EXPE1122M25) Entry @ $0.60

Entry on December 8th at $26.88
Earnings Date 02/10/11 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on December 7th, 2010