Editor's Note:

After a two-week decline the market has produced a sharp oversold bounce,fueled largely by short covering.

Our OPEN call trade has been triggered. I've updated a couple of stop losses tonight.

-James

Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 72.44 change: +2.28

Stop Loss: 69.25
Target(s): 77.00
Current Option Gain/Loss: -17.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: The market's widespread rally pushed BA from the bottom of its trading range to the top of its range. Traders could use a breakout past $73.00 as a new bullish entry point.

Earlier Comments:
There is potential resistance at $75.00 and more conservative traders may want to exit there. I am aiming for $77.00. FYI: The Point & Figure chart for BA is bullish with a $79 target.

- Suggested Positions -

Long 2012Jan $75 call (BA1221A75) entry $1.08

12/13/11 trade opened
12/12/11 adjusted stop loss to $69.25
12/12/11 trade did not open, try again.

Entry on December 13 at $71.67
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on December 10, 2011


OpenTable, Inc. - OPEN - close: 44.78 change: +4.85

Stop Loss: 39.45
Target(s): 48.50
Current Option Gain/Loss: + 76.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: Our OPEN trade has been triggered. Positive analyst comments this morning and the market's big move higher fueled a sharp session of short covering in OPEN. The stock gapped higher at $41.24 and rallied to $44.88 (a +12% gain for the day). Our trigger to buy calls was hit at $41.55.

If you missed our entry point you might get another chance tomorrow. After the closing bell OPEN disclosed in an SEC filing that its executive chairman, Jeffery Jordan, had resigned, effective immediately, on Dec. 14th. Jordan remains on the board. The stock was trading lower after hours on this news. I would be tempted to buy a dip in the $42-41 zone.

We are raising our stop loss to $39.45.

Earlier Comments:
The most recent data listed short interest at 53% of the very small 16.2 million-share float. This can be a volatile stock. Our target is the simple 100-dma but we'll tentatively put our exit target at $48.50. We want to keep our position size small to limit our risk.

(small positions) - Suggested Positions -

Long 2012Jan $45 call (OPEN1221A45) entry $1.50

12/20/11 new stop loss @ 39.40

Entry on December 20 at $41.55
Earnings Date 02/07/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 17, 2011


Phillip Morris Intl. - PM - close: 76.70 change: +0.50

Stop Loss: 74.25
Target(s): 79.75
Current Option Gain/Loss: +129.4%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/20 update: Defensive stocks were out of favor with the market in a "risk on" mood today. PM still managed to gain another +1.6%. Shares look poised to breakout past resistance at $77.00 soon. More conservative traders may want to take profits now with the call option up +129%.

Earlier Comments:
Our multi-week target is $78.50. FYI: The Point & Figure chart for PM is bullish with a $95 target.

- Suggested Positions -

Long 2012 Jan $75 call (PM1221A75) Entry $1.12

12/17 new stop loss @ 74.25
12/05 Call is up +100%, readers may want to exit now!
12/03 new stop loss @ 73.75
11/30 new stop loss @ 71.40
11/23 adjusted stop loss to $69.49
11/22 trade opened. PM opened at $72.11

Entry on November 22 at $72.11
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 7.3 million
Listed on November 19, 2011


Boston Beer Co. Inc. - SAM - close: 106.54 change: +2.31

Stop Loss: 98.75
Target(s): 109.50
Current Option Gain/Loss: +39.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: SAM gapped open higher and rallied to a +2.2% gain. The stock has now broken out past resistance near $105.00. We are raising our stop loss to $99.75.

Earlier Comments:
Our exit target is $109.50. More aggressive traders may want to aim higher. FYI: The Point & Figure chart for SAM is bullish with a $117 target. NOTE: The most recent data listed short interest at 22% of SAM's extremely small 8.3 million-share float. That's definitely a recipe for a short squeeze.

(small positions) - Suggested Positions -

Long JAN $105 call (SAM1221A105) Entry $2.05

12/20/11 new stop loss @ 99.75
12/03/11 new stop loss @ 98.75
12/02/11 trade triggered at $102.00

Entry on December 02 at $102.00
Earnings Date 03/08/12 (unconfirmed)
Average Daily Volume = 72.3 thousand
Listed on December 01, 2011


Varian Medical Sys. - VAR - close: 65.02 change: +1.82

Stop Loss: 62.49
Target(s): 69.75
Current Option Gain/Loss: -26.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: Today's market rally has kicked VAR past resistance near $64.00 but shares are still hovering near the top of its trading range at resistance near $65.00. Today's high was $65.41. I'd prefer to see a move past $65.50 before initiating new positions.

- Suggested Positions -

Long JAN $65 call (VAR1221A65) entry $2.65

12/14/11 adjust stop loss to $62.49

Entry on December 13 at $65.25
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on December 12, 2011


PUT Play Updates

AGCO Corp. - AGCO - close: 42.01 change: +1.69

Stop Loss: 42.75
Target(s): 35.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/20 update: AGCO rallied off support near $40 and closed with a +4.2% gain. Today's move does break the short-term two-week trend of lower highs. Currently we're still on the sidelines. The plan is to buy puts if AGCO trades at $39.90 or lower. Readers might want to consider an alternative and wait for AGCO to stall at resistance near its 200-dma and launch bearish positions there with a tight stop loss.

If triggered at $39.90 we want to keep our position size small.

Trigger @ 39.90 (small positions)

- Suggested Positions -

buy the Jan $40 PUT (AGCO1221M40)

Entry on December xx at $ xx.xx
Earnings Date 02/07/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 15, 2011


BMC Software Inc. - BMC - close: 34.39 change: +1.46

Stop Loss: 35.05
Target(s): 30.05
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/20 update: Short covering also produced a sharp rebound in BMC today. The stock surged +4.4% and appears to have broken the two-week trend of lower highs. Fortunately we are still on the sidelines. The plan is to buy puts when BMC trades at $32.75 or lower. I would keep an eye on potential technical resistance at the descending 40-dma (near $35).

Trigger @ 32.75

- Suggested Positions -

buy the 2012Jan $32.50 PUT (BMC1221M32.5)

Entry on December xx at $ xx.xx
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 14, 2011


Check Point Software - CHKP - close: 54.61 change: +1.56

Stop Loss: 55.05
Target(s): 48.00
Current Option Gain/Loss: -66.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: Today's market rebound produced a +2.9% bounce in CHKP. The stock has stalled near technical resistance close to its 30 and 200-dma. If the market rally continues tomorrow then odds are good we'll see CHKP hit our stop loss at $55.05.

Earlier Comments:
There is potential support near $51.00 but we're aiming for the $48.00 level. More aggressive traders could aim lower. FYI: The Point & Figure chart for CHKP is bearish with a $46 target.

(Small Positions) - Suggested Positions -

Long Jan $50 PUT (CHKP1221M50) Entry $1.20

12/13/11 new stop loss @ 55.05

Entry on December 09 at $53.29
Earnings Date 01/30/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 08, 2011


Coach, Inc. - COH - close: 58.64 change: +1.72

Stop Loss: 60.10
Target(s): 51.00
Current Option Gain/Loss: -34.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: Today's oversold bounce in COH produced a +3% gain but the rebound stalled near technical resistance at its 100 and 200-dma. If the market's rally continues tomorrow then we can look for COH to bounce toward the next level of resistance near $60.00. A failed rally near $60 can be used as a new bearish entry point.

Earlier Comments:
Our multi-week target is the $51.00 level. FYI: The Point & Figure chart for COH is bearish with a $52 target but this could grow.

- Suggested Positions -

Long 2012Jan $55 PUT (COH1221M55) Entry $1.45

Entry on December 19 at $58.08
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on December 17, 2011


ITT Educational Services - ESI - close: 51.60 change: +1.23

Stop Loss: 52.60
Target(s): 45.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/20 update: ESI saw a +2.4% bounce but shares failed to breakout past the top of its recent trading range with resistance at $52.50. Volume was very light today and the intraday low was $50.45. Our plan is unchanged.

Earlier Comments:
I am suggesting small bearish put positions if ESI hits $49.75. Why small positions? Because the most recent data listed short interest at 55% of the very small 17.9 million-share float. If ESI were to suddenly bounce the stock could shoot higher on a short squeeze.

If triggered at $49.75 we'll aim for $45.25. The Point & Figure chart for ESI is bearish with a $44 target.

Trigger @ 49.75 (small positions)

- Suggested Positions -

buy the 2012Jan $47.50 PUT (ESI1221M47.5)

Entry on December xx at $ xx.xx
Earnings Date 01/19/12 (unconfirmed)
Average Daily Volume = 363 thousand
Listed on December 19, 2011


Fluor Corp. - FLR - close: 49.11 change: +2.05

Stop Loss: 50.65
Target(s): 45.15
Current Option Gain/Loss: -45.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: Ouch! Today's +4.3% oversold bounce in FLR took a big chunk out of its recent losses. The stock is still trading under resistance near $50.00. I'd rather wait for the bounce to stall or reverse before considering new positions. More conservative traders might want to inch their stop loss closer to the $50.00 level.

Earlier Comments:
We want to keep our position size small because FLR is arguably already oversold but that doesn't mean it can't get more oversold. FYI: The Point & Figure chart for FLR is bearish with a $43 target.

- Suggested Positions - (Small Positions)

Long 2012Jan $45 PUT (FLR1221M45) entry $1.20

12/19/11 new stop loss @ 50.65

Entry on December 14 at $49.35
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on December 13, 2011


Juniper Networks - JNPR - close: 19.74 change: +1.62

Stop Loss: 20.55
Target(s): 16.75
Current Option Gain/Loss: - 47.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: JNPR shorts were definitely scrambling for cover today. After a very sharp two-week decline the stock sprinted higher this morning but stalled near resistance at $20.00. The high today was $20.13. JNPR ended the session up +8.9%. More conservative traders might want to consider an early exit now or lowering their stop loss near today's high. We are leaving our stop at $20.55.

(small positions) - Suggested Positions -

Long 2012Jan $17.50 PUT (JNPR1221M17.5) entry $0.57

12/17/11 readers may want to take profits now. JNPR looks short-term oversold
12/14/11 new stop loss @ 20.55
12/12/11 JNPR gapped open lower at $19.58, opening our trade. Stop loss at $20.75

Entry on December 12 at $19.58
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 8.8 million
Listed on December 10, 2011


Monsanto Co - MON - close: 70.29 change: +2.84

Stop Loss: 71.05
Target(s): 60.50
Current Option Gain/Loss: -58.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: Hmm... readers might want to consider hitting the eject button on this trade. MON outperformed the market today with a +4.2% gain. The stock also managed to close over potential resistance at $70.00 and above several key moving averages. I am not suggesting new positions at this time. We have a stop at $71.05.

Earlier Comments:
Our target is $60.50. More conservative traders may want to exit near $63.00 instead. FYI: The Point & Figure chart for MON is bearish with a $60 target.

(small positions) - Suggested Positions -

Long 2012Jan $65 PUT (MON1221M65) entry $2.05

Entry on December 14 at $67.35
Earnings Date 01/05/12 (unconfirmed)
Average Daily Volume = 3.7 million
Listed on December 13, 2011


Thermo Fisher Scientific - TMO - close: 44.93 change: +1.39

Stop Loss: 46.15
Target(s): 42.75
Current Option Gain/Loss: Dec$45p: +111.1% & Jan$45P: - 7.1%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
12/20 update: TMO produced an oversold bounce (+3.1%) right back to round-number resistance at $45.00. More conservative traders might want to consider lowering their stop loss. The high today was $45.11. I am not suggesting new positions at this time.

- Suggested Positions -

(December position closed 12/15/11)
DEC $45 put (TMO1117X45) Entry $0.45 exit $0.95 (+111.1%)

- or -

Long JAN $45 put (TMO1221M45) Entry $1.40

12/15/11 planned exit for Dec. $45 put. bid @ 0.95 (+111.1%)
12/14/11 Prepare to exit Dec. $45 puts at the open tomorrow, current bid on these puts is $1.20 (+166.6%)
12/14/11 new stop loss @ 46.15
12/05/11 TMO gapped open higher at $47.10

Entry on December 05 at $47.10
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 3.5 million
Listed on December 03, 2011


WellPoint Inc. - WLP - close: 65.47 change: +1.83

Stop Loss: 65.75
Target(s): 58.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/20 update: WLP bounced off support near $63.50 to close up +2.8%. If we see shares close over $66.00 then we'll drop it as a bearish candidate. Until then the plan is to buy puts when WLP hits $63.25.

Trigger @ 63.25

- Suggested Positions -

buy the 2012Jan $60 PUT (WLP1221M60)

Entry on December xx at $ xx.xx
Earnings Date 01/25/12 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on December 19, 2011


Watson Pharmaceuticals - WPI - close: 61.19 change: +1.54

Stop Loss: 63.05
Target(s): 56.00
Current Option Gain/Loss: Dec$60p: -12.5% & Jan$60p: -35.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/20 update: WPI bounced off multi-month lows to close up +2.5%. Shares are still trading under resistance near $62.00 but I'm not suggesting new positions at this time.

- Suggested Positions -

(December position closed 12/15/11)
DEC $60 PUT (WPI1117X60) Entry $0.80 exit $0.70 (-12.5%)

- or -

Long JAN $60 PUT (WPI1221M60) Entry $2.00

12/19/11 new stop loss @ 63.05
12/15/11 planned exit for Dec. $60 puts, bid $0.70 (-12.5%)
12/14/11 Prepare to exit Dec. $60 puts at the open tomorrow, current bid on these puts is $0.65

Entry on December 07 at $61.75
Earnings Date 02/14/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on December 03, 2011