Editor's Note:

No one was motivated to chase stocks or take profits the last trading day ahead of Christmas. Overall stocks continued to drift sideways. There is very little change in our play updates below. The only real changes are new stop losses for CSX and ESRX. Plus, we've modified our entry point on CMI to launch very small bullish positions now.

-James

Current Portfolio:


CALL Play Updates

Cummins Inc. - CMI - close: 110.91 change: -0.34

Stop Loss: 108.75
Target(s): 112.75 114.75
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
12/25 update: CMI pulled back toward the $110.50 level again. I'm going to suggest an aggressive entry point now to go ahead and buy very small call positions. This is a higher-risk entry point because CMI and the major indices still look short-term overbought. If you're patient we might see a better entry point on a dip near $110.00 or the rising 10-dma. We will leave our stop loss at $108.75.

Buy calls now (small positions only to limit our risk)

- Suggested Position -
Buy the 2011 January $115 calls (CMI1122A115) current ask $1.40

- or -

Buy the 2011 March $115 calls (CMI1119C115) current ask $4.90

12/25: Buy calls now at current levels (small positions)
12/21: New entry point @ $110.25, New stop @ 108.75, New option strikes.

Chart:

Entry on December 27th at $ xx.xx
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on December 11th, 2010


CSX Corp. - CSX - close: 63.68 change: -0.30

Stop Loss: 61.75
Target(s): 67.00, 69.50
Current Option Gain/Loss: -35.4% and -23.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/25 update: The railroad stocks are just not moving on Wall Street. The group and shares of CSX have been consolidating sideways for three weeks now. This is terrible for our call options. Readers may want to wait for CSX to see a new relative high before considering new bullish positions. If you do open new positions I would buy the February calls.

Please note our new stop loss at $61.75, just under the 50-dma.

- 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

12/25: new stop loss @ 61.75
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.

Chart:

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: 46.28 change: -0.18

Stop Loss: 43.75
Target(s): 44.90, 48.00
Current Option Gain/Loss: +625.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/25 update: CTL tested short-term support near $46.00 again. The stock appears to have short-term support about every $1.00 ($46, 45, 44, etc). I am not suggesting new positions at this time.

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

12/21: Adjusted final target to $48.00
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

Chart:

Entry on November 29th at $42.55
Earnings Date 02/22/11
Average Daily Volume = 3.0 million
Listed on November 27th, 2010


Cognizant Technology Solutions - CTSH - close: 72.83 change: +0.01

Stop Loss: 68.49
Target(s): 74.50, 79.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/25 update: CTSH is going nowhere fast. The stock is still consolidating sideways in a very narrow range. We want to wait to buy calls on a dip at $71.50. Our first target is $74.50. Our longer-term target is $79.00.
FYI: The Point & Figure chart for CTSH is forecasting a $93 price target.

Trigger to buy calls on the dip @ $71.50

- Suggested Positions -

Buy the 2011 January $75.00 calls (CTSH1122A75)

- or -

Buy the 2011 April $75.00 calls (CTSH1116D75)

Chart:

Entry on December xxth at $ xx.xx
Earnings Date 02/09/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on December 18th, 2010


Express Scripts - ESRX - close: 54.26 change: -0.49

Stop Loss: 51.49
Target(s): 53.95, 58.50
Current Option Gain/Loss: +16.9% and -25.2%
Time Frame: 5 to 6 weeks
New Positions: see below

Comments:
12/25 update: ESRX is showing some relative weakness the past few days. It's starting to make the new high on December 20th look like a little bull trap pattern. The stock is testing short-term support near $54.00, which also coincides with a four-month trendline of support. A bounce from here could be a new entry point. The late November lows were $51.66 so I'm raising our stop loss to $51.49. If you do open new positions here you may want to consider a tighter stop loss (maybe closer to $53 or $54). Our final exit target is $58.50.

FYI: The point & figure chart for ESRX is forecasting a very bullish, long-term target of $80.

We currently only have half a position open.

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

- or -

Second Position (small position):

Long the 2011 February $55.00 calls (ESRX1119B55) current ask $2.22

12/25: new stop loss @ 51.49
12/20: Suggested new positions with Feb. 55 calls.
12/18: Adjusted final exit target to $58.50
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%)

Chart:

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: 59.47 change: -0.13

Stop Loss: 53.75
Target(s): 59.95, 62.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/25 update: We have been expecting FAST to roll over under resistance at $60.00. It looks like the correction might be starting. We want to buy calls on a dip at $56.75.

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 @ 56.75

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

- or -

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

12/21: Adjusted entry point trigger from 56.00 to 56.75

Chart:

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: 93.01 change: -0.36

Stop Loss: 90.90
Target(s): 96.75, 99.75
Current Option Gain/Loss: -62.5% and -19.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/25 update: FDX has been a disappointment. Shares have gone nowhere since their earnings report a week ago. There is no change from my prior comments. Readers may want to wait for a new relative high (maybe over 94.50 or over 95.00) before initiating new positions. Our first target to take profits is $96.75. Our second target is $99.75.

- Suggested Positions (only small positions so far) -

Buy the 2011 January $100 call (FDX1122A100) Entry @ $0.80

- or

Buy the 2011 April $100 call (FDX1116D100) Entry @ $2.96

12/17: FDX opens at $94.23 - our entry point.
12/16: Adjusted Entry - initiate small positions now (@ Friday's open)

Chart:

Entry on December 17th at $94.23
Earnings Date 12/16/10 (confirmed)
Average Daily Volume = 2.1 million
Listed on November 29th, 2010


Goldman Sachs - GS - close: 167.60 change: -2.00

Stop Loss: 162.95
Target(s): 171.00, 179.50
Current Option Gain/Loss: +25.4% and +18.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/25 update: After a strong three-day bounce shares of GS hit some profit taking on Thursday. If you're looking for a new entry point I'd wait for a dip or a bounce near the $165-164 area. Our first target to take profits is at $171.00.
FYI: The Point & Figure chart for GS is forecasting a very bullish $224 long-term target.

- Suggested Positions (only small positions so far) -

Buy the 2011 January $170 calls (GS1122A170) Entry @ $2.75

- or -

Buy the 2011 April $175 calls (GS1116D175) Entry @ $5.27

12/22: New stop loss @ 162.95
12/17: GS opened at $163.92
12/16: Adjusted Entry - initiate small positions now (@ Friday's open)

Chart:

Entry on December 17th at $163.92
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 7.2 million
Listed on December 2nd, 2010


International Business Machines - IBM - close: 145.89 change: -0.06

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:
12/25 update: IBM is still consolidating sideways but shares look poised to breakout higher. 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)

Chart:

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: 37.01 change: -0.89

Stop Loss: 34.90
Target(s): 39.75
Current Option Gain/Loss: -15.3% and - 6.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/25 update: I warned readers that $38.00 was probably resistance for JNPR. Shares erased two days of gains with some profit taking on Thursday. The stock gave up -2.3% and is nearing its 10-dma. I would consider new bullish positions on a dip near the $36-35 area. Our first target is $39.75.

- Suggested Positions (only small positions so far) -

Buy the 2011 January $38.00 calls (JNPR1122A38) Entry @ $0.78

- or -

Buy the 2011 April $40.00 calls (JNPR1116D40) Entry @ $1.50
12/17: JNPR opens at $36.91
12/16: Adjusted Entry - initiate small positions now (@ Friday's open)

Chart:

Entry on December 17th at $36.91
Earnings Date 01/25/11 (unconfirmed)
Average Daily Volume = 5.5 million
Listed on December 11th, 2010


Lockheed Martin Corp. - LMT - close: 69.25 change: -0.10

Stop Loss: 67.95
Target(s): 73.25
Current Option Gain/Loss: -51.4% and -55.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/25 update: There is nothing new to report on for LMT. Shares are still underperforming and I remain very cautious on LMT here. I am not suggesting new bullish positions at this time. More conservative traders may want to exit early or raise their stop loss (maybe raise it toward $69.00).

- Suggested Positions -

Buy the 2011 January $70.00 calls (LMT1122A70) Entry @ $1.75

- or -

Buy the 2011 March $75.00 calls (LMT1119C75) Entry @ $1.00

Chart:

Entry on December 17th at $70.28
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 16th, 2010


Millicom Intl. Cellular - MICC - close: 93.43 change: +0.73

Stop Loss: 89.75
Target(s): 99.50
Current Option Gain/Loss: - 8.6% and + 6.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/25 update: Our new play in MICC continued to show some strength on Thursday. Shares actually gapped open on Thursday at $94.23 (our entry point) but failed to see much follow through on the opening move. The stock closed near potential resistance at its 100-dma. Nothing has changed from my Wednesday comments. We can buy calls now or if you're patient we might see a better entry point in the $91 area. Our exit target is $99.50. Aggressive traders could aim for the 2010 highs near $102.50.

FYI: It looks like MICC must have had a special dividend because several of the options have odd strike prices ending in .40.

- Suggested Positions -

Long the 2011 January 95.40 calls (MICC1122A95.4) Entry @ $2.30

- or -

Long the 2011 April $100.00 calls (MICC1116D100) Entry @ $3.30

Chart:

Entry on December 23rd at $94.23
Earnings Date 02/09/11 (unconfirmed)
Average Daily Volume = 518 thousand
Listed on December 22nd, 2010


Monsanto Co. - MON - close: 66.60 change: +0.15

Stop Loss: 59.89
Target(s): 67.25, 69.85
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
12/25 update: MON continues to hover just above the $66 level. Shares look overbought with the bit bounce from $60. We have a trigger to buy calls on a dip at $64.25. If triggered our first target is $67.25. Our second target is $69.85.
FYI: The Point & Figure chart for MON just broke out past descending resistance and is forecasting a $74 price target.

NOTE - Readers need to know that MON is due to report earnings on January 6th. Holding over the report would be a high-risk event.

Buy-the-dip Trigger @ 64.25

- Suggested Positions -

Buy the 2011 January $65.00 calls (MON1122A65) current ask $2.22

- or -

Buy the 2011 April $65.00 calls (MON1116D65) current ask $4.65

Chart:

Entry on December xxth at $ xx.xx
Earnings Date 01/06/11 (confirmed)
Average Daily Volume = 4.9 million
Listed on December 18th, 2010


Netflix Inc. - NFLX - close: 184.58 change: -0.77

Stop Loss: 174.90
Target(s): 199.50, 219.50
Current Option Gain/Loss: -28.7% and -20.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/25 update: NFLX was kind enough to offer us a better entry point on Thursday with a dip toward $181.50. I would still consider new bullish positions at current levels (just remember that is a very small bullish position).

Make no mistake, this is a very aggressive, higher-risk trade. I suggest readers keep their positions pretty small to limit your risk. Our first target is $199.50. Our second target is $219.50.

- Suggested Positions (small positions only) -

Long the 2011 January $200 calls (NFLX1122A200) Entry @ $4.35

- or -

Long the 2011 February $220 calls (NFLX1119b220) Entry @ $5.75

Chart:

Entry on December 22nd at $187.12
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 7.5 million
Listed on December 21st, 2010


Oceaneering International - OII - close: 74.63 change: -0.64

Stop Loss: 69.95
Target(s): 78.00, 79.95
Current Option Gain/Loss: -11.5%, -11.7%, and - 9.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/25 update: Hmm.... oil futures rallied to new relative highs and yet the oil service stocks ticked lower. OII opened at $75.28 (our new entry point) and closed lower on the session. Overall I remain bullish on OII and would still consider new positions here but readers may want to start small. Our first target is $78.00.

- Suggested Positions -

Buy the 2011 January $75 calls (OII1122A75) Entry @ $2.77

- or -

Buy the 2011 January $80 calls (OII1122A80) Entry @ 0.85

- or -

Buy the 2011 April $80 calls (OII1116D80) Entry @ 3.86

Chart:

Entry on December 23rd at $75.28
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume = 584 thousand
Listed on December 4th, 2010


Panera Break Co. - PNRA - close: 104.10 change: +0.30

Stop Loss: 103.90
Target(s): 109.95, 114.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
12/25 update: I'm not ready to give up on PNRA quiet yet. Shares were underperforming the last few days. If you look at an intraday chart PNRA looks poised to move lower. For the moment we will keep our breakout trigger to buy calls at $107.15. If shares don't recover soon we'll drop it as a bullish candidate.

If triggered our first, short-term target is $109.90. Our second, longer-term target is $114.00. This is an aggressive trade so we want to keep our position size small. FYI: The Point & Figure chart is very bullish with a $131 target.

Breakout Trigger @ $107.15

- Suggested Positions - (small positions) -

Buy the 2011 January $110 (PNRA1122A110)

- or -

Buy the 2011 February $115 (PNRA1119B115)

Chart:

Entry on December xxth at $ xx.xx
Earnings Date 02/10/11 (unconfirmed)
Average Daily Volume = 389 thousand
Listed on December 20th, 2010


Transocean Ltd. - RIG - close: 69.32 change: +0.04

Stop Loss: 66.25
Target(s): 72.50, 78.25
Current Option Gain/Loss: -37.6% and -30.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/25 update: RIG bounced from $68.50 for the second time in two weeks on Thursday. Shares are also nearing technical support at the 40-dma. This looks like a new entry point to buy calls but readers may want to wait for a little bit more strength first (like a move over $71). 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) Entry @ $1.80

12/17/10 Entry on Feb. calls @ $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


Union Pacific - UNP - close: 91.71 change: -0.38

Stop Loss: 89.75
Target(s): 96.25, 99.75
Current Option Gain/Loss: -36.8% and -14.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/25 update: Railroad stocks were pretty sleepy on Thursday. UNP drifted sideways. I would be tempted to buy calls here but readers might want to wait for a move over $92.50 first.

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

Second Position
Buy the 2011 February $95 calls (UNP1119B95) Entry @ $2.33

12/21/10: UNP provides another entry point.
12/17/10: Entry on Feb. calls @ $2.33
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: 72.73 change: -0.13

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:
12/25 update: There is no change from my previous comments on UPS. We are waiting for a pull back toward support near $70.00. Our trigger to buy calls is 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)

Chart:

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: 79.50 change: -0.02

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:
12/25 update: UTX is still hovering near resistance at the $79.50 level. The trend of higher lows does suggest UTX wants to breakout higher. Aggressive traders could buy calls now. I'm still a little bit hesitant to launch positions here but UTX is moving the right direction, albeit very slowly. At the moment our suggested entry point is at $77.10.
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)

Chart:

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: 44.82 change: -0.40

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:
12/25 update: VMC is still correcting lower, which is what we want to see. The stock should have some support in the $44-43 zone. Right now our trigger is to buy a dip at $43.75 but readers may want to bump that to above the $44.00 level and its simple 200-dma.

Trigger @ $43.75

- Suggested Positions -

Buy the 2011 January $45 calls (VMC1122A45)

- or -

Buy the 2011 February $45 calls (VMC1119B45)

Chart:

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: 89.39 change: -0.46

Stop Loss: 84.75
Target(s): 89.90, 94.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/25 update: XEC is another energy stock that saw some profit taking on Thursday in spite of the strength in oil prices. We are waiting for a dip back toward support. Currently our plan is to buy calls on a dip at $86.50. We want to keep our position size pretty small to limit our risk.

Trigger @ 86.50

- Suggested Positions -
Buy the 2011 January $90 calls (XEC1122A90)

- or - Buy the 2011 February $90 calls (XEC1119B90)

Chart:

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: 26.33 change: -0.29

Stop Loss: 27.75
Target(s): 25.10, 24.25
Current Option Gain/Loss: -33.3%
Time Frame: 2 to 3 weeks
New Positions: No

Comments:
12/25 update: Shares of EXPE are still reversing but I remain hesitant to launch new put positions. Meanwhile there were lots of headlines about EXPE and American Airlines on Thursday. Evidently the two are in a legal dispute after American pulled its data from EXPE's Orbitz travel website. In response EXPE just made flights for American Airlines a lot harder to find on their website.

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

Chart:

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