Editor's Note:

Investors responded positively to bullish earnings reports from INTC and JPM. Stocks rallied to new two-year highs. The U.S. markets are closed on Monday. That leaves us with four trading days left before January options expire. There is still a good chance that the market produces a short-term top this coming week as investors react to the next wave of earnings news.

There are new stop losses tonight in AMZN, ESRX, JNPR, and MICC.

-James

Current Portfolio:


CALL Play Updates

Amazon.com Inc. - AMZN - close: 188.75 change: +3.22

Stop Loss: 181.80
Target(s): 192.50, 199.75
Current Option Gain/Loss: -19.5%, and - 5.1%
Time Frame: 4 to 6 weeks
New Positions: See below

Comments:
01/15 update: For the second time this week AMZN had an analyst firm raise their price target on the stock. The widespread rally and strength in the tech sector pushed AMZN to a +1.7% gain and a new all-time closing high. The high today was $188.94. I am adjusting our first target to take profits from $189.90 to $192.50 since we need to see AMZN above $190 if our January call is going to make any money. We'll adjust our secondary target from $199.00 to $199.75.

If you are looking for a new entry point I would wait for a dip into the $187-186 zone. Please note our new stop loss at $181.80.

- Suggested (SMALL) positions -

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

- or -

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

01/15: New stop loss @ 181.80, New targets 192.50, 199.75

Chart:

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: 70.07 change: +0.24

Stop Loss: 65.90
Target(s): 69.00, 71.85
Current Option Gain/Loss: +167.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/15 update: BA underperformed its peers in the defense sector and shares underperformed the broader market. The stock has been consolidating sideways near resistance at $70.00. I'm still expecting a pull back toward the $66.00 level or the 200-dma. Please note that I have adjusted our final target to $71.85. I'm not suggesting new bullish positions at this time. More conservative traders may want to raise their stops higher. Our final target to exit is $72.25.

- Suggested Positions - (small positions only!)

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

01/15: final target adjusted to $71.85
01/12 New stop loss @ 65.90
01/08: Exit the rest of our January calls @ $2.35 (+305%)
01/06: 1st Target Hit @ 69.00. Jan call @ $2.15 (+270%). Feb. call @ $1.80 (+146%)
01/06: New stop loss @ 64.90

Chart:

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


Caterpillar - CAT - close: 94.01 change: +0.13

Stop Loss: 92.25
Target(s): 99.80
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
01/15 update: Hmmm.... we need to start asking ourselves, "what's wrong with CAT?" The stock isn't moving. Shares have been stuck in the $92-95 trading range for over four weeks now. The rest of the market is breaking out higher, why isn't CAT moving? I don't have an answer. Today's lack of movement is another form of relative weakness. We definitely want to keep our positions small. Keep in mind that CAT is due to report earnings in less than two weeks and we do not want to hold over the announcement.

Currently our plan is to buy calls on a breakout with a trigger at $95.15.
The Point & Figure chart for CAT is bullish with a $118 target.

Trigger @ 95.15

- Suggested Positions -

Buy the 2011 February $100 calls (CAT1119B100) current ask $1.31

Chart:

Entry on January xxth at $ xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume = 4.2 million
Listed on January 5th, 2010


Cummins Inc. - CMI - close: 112.56 change: -0.35

Stop Loss: 108.75
Target(s): 117.50
Current Option Gain/Loss: -59.8% and + 0.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/15 update: Uh-oh! CMI did not participate in the market's rally on Friday. I couldn't find any news to explain the relative weakness. The lack of movement makes me cautious. I am not suggesting new bullish positions at this time. Currently our stop loss is at $108.75 but more conservative traders may want to use a stop closer to $110.

We have four trading days left on our January calls. Readers may want to consider an early exit on our January calls to salvage any capital left. There's always a chance CMI will rally before expiration but if CMI didn't rally today when will it move? There is short-term resistance at $114.00 and CMI needs to get past $115 if our January calls are going to see any gains.

(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.

Chart:

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


CenturyLink, Inc. - CTL - close: 44.27 change: -0.59

Stop Loss: 43.75
Target(s): 44.90, 48.00
Current Option Gain/Loss: - 75.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/15 update: Warning! The action in CTL on Friday was bearish. Instead of rising with the rest of the market CTL turned lower and dipped toward technical support at its 50-dma. Shares actually tagged new relative lows at $44.22. If there was any value left in our January calls I'd exit early now but the January $45 calls are only bidding 5 cents. I'd rather hold on to it and see what happens between now and next Friday's expiration. I am not suggesting new bullish positions.

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


Express Scripts - ESRX - close: 57.59 change: -0.04

Stop Loss: 54.75
Target(s): 53.95, 58.50
Current Option Gain/Loss: +140.4% and +53.1%
Time Frame: 5 to 6 weeks
New Positions: see below

Comments:
01/15 update: ESRX rallied to new highs this past week. Shares are hovering between the $57 and $58 levels. The stock should see some support near $55.00 so I am raising our stop loss to $54.75. I'm not suggesting new bullish positions at this time. Our final target is $58.50. More aggressive traders may want to aim for $60.00.

Our plan was to exit the January calls on Friday at the closing bell (see Thursday's update). The January $52.50 calls closed with a bid at $5.05 (+140%).

We currently only have half a position open.

Current Position:
2011 January $52.50 calls (ESRX1122A52.5) Entry @ $2.10, exit @ 5.05 (+140%)

- or -

Second Position (small position):

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

01/15: New stop loss @ 54.75
01/14: Exit the January calls at the close. Exit @ $5.05 (+140%)
01/13: Plan on exiting the January calls tomorrow before the close.
01/06: New stop loss @ 53.75
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


FedEx Corp. - FDX - close: 95.83 change: +0.20

Stop Loss: 91.75
Target(s): 99.90, 104.75
Current Option Gain/Loss: -85.0% and - 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/15 update: FDX didn't make much progress on Friday. The Dow Jones Transportation index did not participate in the rest of the market's rally higher. FDX rallied to new multi-month highs but reversed at the $97.00 level. This does not bode well for our January calls. I have been suggesting that we sell our January calls at 40 cents but the high today was only 23 cents. We are down to four trading days left before January's expiration.

I remain cautious on FDX and would hesitate to open new bullish positions.

- 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

01/13: New targets for the April calls (99.90 and 104.75)
01/12: New stop loss @ 91.75
01/08: New exit strategy for January calls. Try to exit at 40 cents or more.
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: 175.00 change: +3.43

Stop Loss: 167.75
Target(s): 171.00, 179.50
Current Option Gain/Loss: +114.5% and +54.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/15 update: Better than expected earnings results from J.P.Morgan (JPM) sent the financial stocks surging higher. Shares of GS delivered a +2% gain on Friday closing at $175.00. On Thursday I suggested conservative readers exit their January calls on Friday. Right now our plan is to exit all of our positions on Tuesday at the closing bell to avoid holding over GS' earnings report on Wednesday morning. I am not suggesting new bullish positions at this time. Our final target is $179.50 should GS spike higher prior to Tuesday's closing bell.

- 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

01/13: New stop loss @ 167.75, plan on exiting Jan. 18th
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)

Chart:

Entry on December 17th at $163.92
Earnings Date 01/19/11 (confirmed)
Average Daily Volume = 7.2 million
Listed on December 2nd, 2010


International Business Machines - IBM - close: 150.00 change: +1.18

Stop Loss: 144.75
Target(s): 152.50, 159.50
Current Option Gain/Loss: +51.8%, and + 7.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/15 update: IBM has rallied to what could be significant round-number, psychological resistance at the $150.00 mark. This is also a new all-time high for Big Blue. Right now our plan is to exit our January calls on Tuesday at the closing bell to avoid holding over the earnings report (We'll risk it with the April calls). More conservative traders may want to exit the January positions now since there is a good chance that IBM will just drift sideways on Tuesday as investors wait for the earnings release. I am not suggesting new trades at this time.

- Suggested Positions -

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

- or -

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

01/13: Exit the January calls on Tuesday before the close (& earnings)
01/06: New stop loss @ 144.75
01/03: New targets @ $152.50, and $159.50

Chart:

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


Intrepid Potash, Inc. - IPI - close: 38.58 change: +0.81

Stop Loss: 34.75
Target(s): 39.90, 42.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
01/15 update: IPI rallied to new relative highs on Friday. We're still waiting for a dip. Our plan is to buy calls at $37.25 with a stop loss at $34.75. More conservative traders may want to use a tighter stop loss. The 20-dma could be technical support. Our first target is $39.90. Our second, more aggressive target is $42.00.

FYI: The Point & Figure chart for IPI is bullish with a $62 target.

Trigger @ 37.25

- Suggested Positions -

Buy the 2011 February $40 calls (IPI1119B40) current ask $1.25

Chart:

Entry on January xxth at $ xx.xx
Earnings Date 03/01/11 (unconfirmed)
Average Daily Volume = 717 thousand
Listed on January 12th, 2010


Juniper Networks - JNPR - close: 38.73 change: +0.51

Stop Loss: 36.70
Target(s): 39.90, 41.75
Current Option Gain/Loss: +23.0% and +28.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/15 update: JNPR rallied to new multi-year highs this past week, clearing the peak set back in 2007. The recent bounce from $38 is a positive sign and suggests JNPR is poised to make a run at $40.00 soon. Please note our new stop loss at $36.70. Friday's bounce actually looks like a new bullish entry point but given my bias for the rest of January that would be an aggressive move (to buy calls now). We have four trading days left for January options. More conservative traders may want to take profits now.

We want to sell all of our January calls and half of our April calls at $39.90.

- 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
01/15: New stop loss @ 36.70
01/06: New stop loss @ 35.75, new 1st target @ 39.90.
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


Millicom Intl. Cellular - MICC - close: 97.10 change: -0.34

Stop Loss: 93.75
Target(s): 99.90
Current Option Gain/Loss: - 4.3% and +27.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/15 update: Uh-oh! MICC underperformed the rest of the market on Friday. It looks like a number of stocks in the telecom industry were underperforming. MICC still has a bullish trend of higher lows but we're down to our last four trading days before January options expire. Cautious traders will want to seriously consider an early exit now if you're holding January calls. I am not suggesting new positions at this time. Our target to exit is $99.90.

Please note our new stop loss at $93.75.

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

01/13: New stop loss @ 93.75
01/06: New stop loss @ 92.49
01/03: New stop loss @ 91.75, New target at $99.90

Chart:

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


NetApp, Inc. - NTAP - close: 59.48 change: +0.86

Stop Loss: 54.90
Target(s): 62.25, 64.50
Current Option Gain/Loss: - 0.0%
Time Frame: 4 to 5 weeks
New Positions: Yes, see below

Comments:
01/15 update: NTAP bounced back toward its recent highs on Friday and looks poised to breakout over $60.00 soon. Readers may want to wait for a move past $60.00 before initiating new positions. Cautious traders might want to consider a stop loss closer to $56 instead. Our exit targets are $62.25 and $64.50.
The Point & Figure chart for NTAP is bullish with a $66 target.

- Suggested Positions (small positions only) -

Long the 2011 February $60 calls (NTAP1119B60) Entry @ $2.50

Chart:

Entry on January 12th at $59.04
Earnings Date 02/16/11 (unconfirmed)
Average Daily Volume = 3.8 million
Listed on January 11th, 2010


QUALCOMM Inc. - QCOM - close: 52.04 change: +0.17

Stop Loss: 48.75
Target(s): 54.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
01/15 update: I am surprised that QCOM did not show more strength on Friday. Shares merely churned sideways inside its current consolidation. I am moving our trigger to buy calls from $50.75 to $50.25 and moving our stop loss to $48.95. Wait for the dip toward support near $50.00. I would keep your position size small. Earnings are less than three weeks away and we normally want to avoid holding over an earnings report.
FYI: The Point & Figure chart for QCOM is bullish with an $84 target.

Trigger @ 50.25

- Suggested Positions -

Buy the 2011 February $52.50 calls (QCOM1119B52.5) current ask $1.65

Chart:

Entry on January xxth at $ xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 12.1 million
Listed on January 8th, 2010


Research In Motion - RIMM - close: 64.77 change: +0.76

Stop Loss: 59.90
Target(s): 64.75, 67.50
Current Option Gain/Loss: +55.8%, and +48.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/15 update: Good news! RIMM posted another gain on Friday, which should negate the bearish reversal type pattern formed on Thursday. RIMM still looks a little bit overbought here and I wouldn't be surprised to see a dip back toward the $62 area. I am not suggesting new positions at this time. Our final target remains $67.50.

- Suggested Positions -

Long the 2011 February $62.50 calls (RIMM1119B62.5) Entry @ $2.47

- or -

Long the 2011 March $65.00 calls (RIMM1119C65) Entry @ $2.35

01/13: New stop @ 59.90
01/13: 1st Target Hit @ 64.75. Feb. call @ $4.00 (+61.9%) Mar. call @ $3.75 (+59.5%)
01/12: New stop loss @ 58.45

Chart:

Entry on January 6th at $61.00
Earnings Date 03/31/11 (unconfirmed)
Average Daily Volume = 9.9 million
Listed on January 5th, 2010


SPX Corp. - SPW - close: 74.17 change: +0.33

Stop Loss: 69.90
Target(s): 77.40, 79.90
Current Option Gain/Loss: - 9.7%
Time Frame: 4 to 6 weeks
New Positions: See below

Comments:
01/15 update: Traders bought the dip at $73.41 on Friday. I would stay cautious on SPW and wait for a dip closer to $72.50 before considering new bullish positions. More conservative traders may want to use a stop closer to $71.00 instead. Our upside targets are $77.40 and $79.90.
The Point & Figure chart for SPW is bullish with a $92 target.

- Suggested Positions -

Long the 2011 February 75.00 calls (SPW1119B75) Entry @ $2.16

Chart:

Entry on January 11th at $73.49
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 396 thousand
Listed on January 10th, 2010


Stanley Black & Decker, Inc. - SWK - close: 68.15 change: +0.22

Stop Loss: 64.75
Target(s): 69.90, 72.45
Current Option Gain/Loss: -85.7%, and -17.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/15 update: SWK rallied from its Friday morning lows to close back above $68.00 but the "breakout" over resistance near $68 is not very convincing. I would stay cautious on this stock. I'm not suggesting new bullish positions. We only have four trading days left on our January calls and odds are against us. We may want to plan on selling our January calls early if they trade over 35 cents just to recoup some of our capital. Keep your position size small to limit your risk.

- Suggested Positions -

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

- or -


01/15: Consider selling the January calls early @ 35 cents or more
01/06: New stop loss @ 64.75

Chart:

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


Cimarex Energy Co. - XEC - close: 97.28 change: +1.32

Stop Loss: 91.80
Target(s): 94.25, 99.50
Current Option Gain/Loss: +174.2%, and +87.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/15 update: XEC extended its rally on Friday to six days in a row. Shares added another +1.3% to close at new highs. I am raising our stop loss to $91.80 since the $92.00 level should offer some support. XEC looks very short-term overbought here and due for some profit taking. I am not suggesting new bullish positions at this time.

I would seriously consider an early exit right now just to lock in a gain. Our plan was to keep our position size small to limit our risk.

- Current Positions -

Long the 2011 February $95 calls (XEC1119B95) Entry @ $1.75

- or -

Long the 2011 March $95 calls (XEC1119C95) Entry @ $3.10

01/15: New stop loss @ 91.80
01/13: New stop loss @ 89.90
01/12: 1st Target Hit @ 94.25. Feb call @ $3.18 (+81.7%) Mar. call @ $4.20 (+35.4%)

Chart:

Entry on January 10th at $90.49
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume = 907 thousand
Listed on December 1st, 2010