Editor's Note:

Stocks continued to rebound higher on Wednesday. Banks helped lead the way. We saw big gains in LMT and RIG. SPW hit our stop loss this morning before bouncing. I am removing CTSH and UTX from the play list.

-James

Current Portfolio:


CALL Play Updates

Amazon.com Inc. - AMZN - close: 185.01 change: +0.79

Stop Loss: 176.45
Target(s): 189.50, 199.00
Current Option Gain/Loss: +36.1%, and +19.4%
Time Frame: 4 to 6 weeks
New Positions: See below

Comments:
01/05 update: AMZN benefitted from another day of positive analyst comments. Shares rallied from short-term support near $184 and closed near its highs with a +1.3% gain. I am adjusting our first target to take profits from $189.50 to $189.90. Traders could buy calls on this bounce but consider a tighter stop loss (and aim for the $200 level).

We want to keep our position size small. AMZN can be a volatile stock. Our upside targets are $189.50 and $199.00.

- Suggested (SMALL) positions -

Long the 2011 January $190 calls (AMZN1122A190) Entry @ $2.35

- or -

Long the 2011 February $200 calls (AMZN1119B200) Entry @ $3.85

Entry on December 28th at $182.10
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on December 27th, 2010


Boeing Co. - BA - close: 67.48 change: +0.54

Stop Loss: 62.75
Target(s): 69.00, 72.25
Current Option Gain/Loss: +98.2%, and +56.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/05 update: Shares of BA were downgraded today but that didn't stop the stock from posting a gain and closing over technical resistance at its 200-dma. I am not suggesting new bullish positions at this time. Our first target to take some money off the table is $69.00. We wanted to keep our position size small to limit our risk. We should consider this a higher-risk aggressive trade. Our first target is $69.00. Our second target is $72.25.

- Suggested Positions - (small positions only!)

Long the 2011 January 67.50 calls (BA1122a67.5) Entry @ $0.58

Long the 2011 February $70.00 calls (BA1119B70) Entry @ $0.73

Entry on January 3rd at $66.15
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 5.3 million
Listed on December 25th, 2010


Cummins Inc. - CMI - close: 112.99 change: +1.39

Stop Loss: 108.75
Target(s): 114.50 117.50
Current Option Gain/Loss: +47.3% and +14.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: CMI's bounce from yesterday afternoon continued. Shares rallied to a new high. I am inching up our first profit target from $114.50 to $114.85. I'm not suggesting new positions here but aggressive traders could buy calls.

(small positions only to limit our risk)

- Suggested Positions -
Buy the 2011 January $115 calls (CMI1122A115) Entry @ $1.12

- or -

Buy the 2011 March $115 calls (CMI1119C115) Entry @ $4.73

01/04: New entry point on afternoon bounce.
01/01: Adjusted targets to $114.50, 117.50
12/27: CMI opens at $110.18
12/25: Buy calls now at current levels (small positions)
12/21: New entry point @ $110.25, New stop @ 108.75, New option strikes.

Entry on December 27th at $110.18
Earnings Date 02/02/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on December 11th, 2010


CSX Corp. - CSX - close: 65.89 change: +0.48

Stop Loss: 62.75
Target(s): 69.25
Current Option Gain/Loss: - 2.2% and +17.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: The rebound in CSX continues. I don't see any changes from my prior comments. Yesterday's dip near $65 was an entry point. You could chase it here. Please note I am removing the $67.0 target. We'll reduce our targets to just one at $69.25.

- 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

01/04: New stop loss @ 62.75
01/04: New entry point on afternoon bounce near $65
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.

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: 46.39 change: -0.34

Stop Loss: 43.75
Target(s): 44.90, 48.00
Current Option Gain/Loss: +675.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: Wednesday was another quiet day for CTL. Shares are still drifting sideways. There is no change from my prior comments. Our final target is $48.00. More aggressive traders may want to aim near the $50.00 level. Just remember we have less than three weeks left. 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

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


Deere & Co - DE - close: 84.24 change: +1.22

Stop Loss: 78.95
Target(s): 84.50, 89.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
01/05 update: Hmmm.... we have been waiting for a dip toward support near $80.00. I'm starting to think if we should consider buying calls on a breakout past resistance near $85.00. Right now the $80.50 entry point is obviously much more attractive so we'll leave our trigger there for the moment. If triggered we'll use a stop loss at $78.95, just under the 50-dma.
FYI: The Point & Figure chart for DE is pretty bullish with a $100 target.

Buy-the-Dip Trigger @ 80.50

- Suggested Positions -

Buy the 2011 February $80 calls (DE1119B80)

- or -

Buy the 2011 February $85 calls (DE1119B85)

Entry on December xxth at $ xx.xx
Earnings Date 02/16/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on December 30th, 2010


Express Scripts - ESRX - close: 55.88 change: -0.24

Stop Loss: 51.49
Target(s): 53.95, 58.50
Current Option Gain/Loss: +66.6% and + 5.4%
Time Frame: 5 to 6 weeks
New Positions: see below

Comments:
01/05 update: ESRX is still consolidating its gains from Monday. There is no change from my prior comments. Broken resistance near $55 should offer some support. Our final exit target is $58.50 but if you're holding the February calls you might want to consider aiming for $60.

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%)

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


FedEx Corp. - FDX - close: 93.87 change: +0.75

Stop Loss: 90.90
Target(s): 96.75, 99.75
Current Option Gain/Loss: -77.5% and -16.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/05 update: FDX managed to outperform the transportation index and the S&P 500 today. Yet shares are still trading under short-term resistance near the 94.25-94.50 zone. I'd rather wait for a move over $94.50 or even the $95.00 mark before considering new positions. Or you could buy calls now and just move your stop closer to the $92.00 level. If you do launch positions I would buy February or April calls.

- 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)

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: 174.00 change: +0.92

Stop Loss: 165.75
Target(s): 171.00, 179.50
Current Option Gain/Loss: +121.8% and +66.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: For the third time this month GS had its earnings estimates downgraded. Yet that didn't stop GS from closing at a new relative high. There is no change from my prior comments. The $171-170 zone should offer some short-term support. I am not suggesting new bullish positions at this time but nimble traders could look to buy an intraday bounce near the $170 level.

- 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

01/03: New stop loss @ 165.75
12/28: 1st Target Hit @ 171.00, Jan. call @ $4.75 (+72.7%), April call @ $7.35 (+39.4%)
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)

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: 147.05 change: -0.59

Stop Loss: 142.99
Target(s): 152.50, 159.50
Current Option Gain/Loss: -13.3%, and - 8.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: The action in IBM today was disappointing. The market's widespread rally failed to have any influence on IBM. I didn't see any specific news behind today's weakness. Readers can still buy positions here but keep your position size small. FYI: The Point & Figure chart on IBM is forecasting a long-term target of $196.

- Suggested Positions -

Long the 2011 January $150 calls (IBM1122A150) Entry @ $1.35

- or -

Long the 2011 April $155 calls (IBM1116D155) Entry @ $2.25

01/03: New targets @ $152.50, and $159.50

Entry on December 29th at $146.75
Earnings Date 01/18/11 (unconfirmed)
Average Daily Volume = 4.7 million
Listed on December 14th, 2010


Juniper Networks - JNPR - close: 37.88 change: +0.72

Stop Loss: 34.90
Target(s): 39.75
Current Option Gain/Loss: + 1.2% and +15.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: Positive analyst comments helped JNPR outperform today with a +1.9% gain. The rally stalled under resistance at its highs near $38.00. I am not suggesting new bullish positions at this time. 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)

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


Kohl's Corp. - KSS - close: 53.90 change: -0.44

Stop Loss: 53.75
Target(s): 57.90, 59.95
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
01/05 update: Wow! I'm surprised by the weakness in KSS today. You would have thought that the strongly positive ADP employment report this morning would have been good news for retailers. More jobs means more spending money in the stores by consumers. Instead KSS drifted lower.

I am suggesting a trigger to buy calls at $55.05. If triggered we'll start the play with a stop loss at $53.75. Our targets are $57.90 and $59.95.
FYI: The Point & Figure chart for KSS is bullish with a $73 target.

Trigger @ 55.05

- Suggested Positions -

Buy the 2011 February $55.00 calls (KSS1119B55)

- or -

Buy the 2011 April $57.50 calls (KSS1116D57.5)

Entry on January xxth at $ xx.xx
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 4.1 million
Listed on January 4th, 2010


Lockheed Martin Corp. - LMT - close: 71.92 change: +1.61

Stop Loss: 67.95
Target(s): 73.25, 74.90(or 200-dma)
Current Option Gain/Loss: +25.7% and + 5.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: Defense stocks participated in the widespread rally today but I couldn't see any specific news to account for LMT's outperformance. The stock surged past resistance at its 100-dma and closed with a +2.2% gain. Volume was strong on the rally as well, which is normally a healthy sign. I am not suggesting new positions at this time.

- 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

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: 96.65 change: +0.55

Stop Loss: 91.75
Target(s): 99.90
Current Option Gain/Loss: +21.7% and +27.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/05 update: Wednesday was a mild day for MICC. Shares faded towrad the $96.00 level before bouncing. Gains were mild. Broken resistance near $94 should offer stronger support. No new positions at this time. 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

01/03: New stop loss @ 91.75, New target at $99.90

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


Transocean Ltd. - RIG - close: 73.25 change: +3.60

Stop Loss: 67.85
Target(s): 72.50, 78.25
Current Option Gain/Loss: +33.8% and +41.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/05 update: Yesterday the oil service stocks were some of the worst performers. Today they are some of the best performers. RIG outperformed its peers and the broader market with a big +5% gain on healthy volume. I am raising our stop loss to $67.85. If you're looking for a bullish entry point I would wait for a dip near $71.00. Our final target is $78.25 but I'm considering an adjustment toward $79.75 instead.

- 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

01/05/11 New stop loss @ 67.85
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%)

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


Stanley Black & Decker, Inc. - SWK - close: 67.26 change: -0.55

Stop Loss: 65.75
Target(s): 69.90, 72.45
Current Option Gain/Loss: -57.1%, and -20.6%
Time Frame: 4 to 6 weeks
New Positions: Yes

Comments:
01/05 update: All right. Now I'm a little bit worried about SWK. The market sees a big rally and SWK does not participate. Readers may want to hold off on initiating new positions. Keep your position size small to limit your risk. Just because these call options look cheap do not go overboard. Repeat - small positions only. FYI: The Point & Figure chart for SWK is bullish with a $77 target.

- Suggested Positions -

Long the 2011 January $70 calls (SWK1122A70) Entry @ $0.70

- or -


Entry on January 4th at $68.15
Earnings Date 01/27/11 (confirmed)
Average Daily Volume = 1.6 million
Listed on January xxth, 2010


Union Pacific - UNP - close: 92.96 change: -0.12

Stop Loss: 89.75
Target(s): 96.25, 99.75
Current Option Gain/Loss: -40.1% and - 9.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/05 update: The underperformance in UNP today is also a little disappointing but the transports took a back seat to other sectors on Wednesday. I would still consider buying February calls here.

- 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

01/04/11: New entry point on afternoon bounce.
01/01/11: UNP is giving us another entry point.
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

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: 72.90 change: +0.11

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:
01/05 update: We are still waiting for a dip near support at $70.00. An alternative entry point would be to wait for a breakout over resistance near $74.00. Currently, I'm suggesting a trigger to buy calls at $70.25. More aggressive traders could consider a move over $74.00 as a potential entry point. I'm considering raising our buy-the-dip trigger toward $72.25.

Trigger @ 70.25

Suggested Position:
Buy the 2011 February$70.00 call (UPS1119B70)

- 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


Cimarex Energy Co. - XEC - close: 90.17 change: +1.32

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:
01/05 update: XEC reversed yesterday's losses and closed back above the $90.00 mark. We might want to consider buying a breakout past the $92.00 level. Currently we're waiting for a dip to buy calls at $86.50. More conservative traders could wait for a dip closer to $85.00. 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)

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: 25.43 change: +1.01

Stop Loss: 26.05
Target(s): 25.10, 23.25
Current Option Gain/Loss: - 8.3%
Time Frame: 2 to 3 weeks
New Positions: No

Comments:
01/05 update: It looks like the market's widespread rally sparked some short covering in EXPE. The stock erased almost four days of losses with today's +4% gain. More conservative traders may want to exit early now. We have a stop loss at $26.05. No new positions at this time. Our first target has already been hit. We're currently aiming for $23.25.

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

01/03/11 New stop loss @ $26.05
12/30/10 Target hit @ 25.10, option @ 0.80 (+25%)
12/30/10 new stop loss at $26.51

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


CLOSED BULLISH PLAYS

Cognizant Technology Solutions - CTSH - close: 76.19 change: +2.03

Stop Loss: 71.75
Target(s): 74.70, 79.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
01/05 update: I am giving up on CTSH. The stock continues to perform well but we don't want to chase it here at new highs. Shares never hit our trigger to open bullish positions. I would keep CTSH on your watch list should this stock see a correction (and it will).

(no chart, play never opened)

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


SPX Corp. - SPW - close: 71.04 change: +0.47

Stop Loss: 69.95
Target(s): 76.50, 79.75
Current Option Gain/Loss: -50.0%, and -38.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/05 update: Sometimes the stock market does not want to cooperate. Shares of SPW broke down under $70.00 just enough to hit $69.90. Our stop loss was at $69.95 so the play was closed before shares of SPW rebounded higher this afternoon. You might want to keep SPW on your watch list for another breakout past $72.50. NOTE: The options didn't trade much today so our exit is an estimate.

- Suggested Positions -

Long the 2011 January $75 calls (SPW1122A75) Entry @ $0.50, Exit @ $0.25 (-50%)

- or -

Long the 2011 February $75 calls (SPW1119B75) Entry @ $1.80, Exit @ $1.10 (-38.8%)
01/05 Stopped out @ 69.95. Jan. call @ 0.25 (-50%), Feb. call @ $1.10 (-38.8%)
01/04 Triggered @ 72.60

Chart:

Entry on January 4th at $72.60
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 346 thousand
Listed on January 1st, 2010


United Technology Corp. - UTX - close: 79.23 change: +0.11

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:
01/05 update: I am giving up on UTX as a bullish candidate. More aggressive traders may want to consider buying calls on a move over $80.00. Keep in mind that UTX could have resistance at its highs near $82.50. The stock never hit our trigger to buy calls.

(no chart, play never opened)

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