Editor's Note:

The U.S. markets faded lower this morning but reversed higher with an afternoon rebound.

Our BMC put play was triggered today.

-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: +16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: The rally continues and BA confirms the breakout from its two-week trading range. The next hurdle for the bulls is potential resistance near $75.00. More conservative traders might want to up their stop loss.

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


Hi Tech Pharmacal Co. - HITK - close: 39.56 change: -1.09

Stop Loss: 37.90
Target(s): 44.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/21 update: Whew! Our play was almost triggered this morning. HITK opened higher but the S&P 500 actually opened lower before turning around this afternoon. HITK's rally attempt faded and the stock underperformed today with a -2.6% drop. I couldn't find any news to account for HITK's underperformance today. We will try again. Buy calls tomorrow morning but only if both HITK and the S&P 500 open positive. We will adjust our stop loss down to $37.90.

Earlier Comments:
The most recent data listed short interest at more than 13% of the very small 10 million share float. Our target is $44.50. Readers might want to aim higher. The Point & Figure chart for HITK is bullish with a $58 target.

*see Entry Details Above*

- Suggested Positions -

buy the 2012Jan $40 call (HITK1221A40)

12/21/11 trade not open yet. (SP500 opened lower) Try again. New stop loss @ 37.90

Entry on December xx at $ xx.xx
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 298 thousand
Listed on December 20, 2011


JPMorgan Chase & Co - JPM - close: 32.32 change: +0.11

Stop Loss: 30.35
Target(s): 37.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/21 update: Shares of JPM were downgraded to "neutral" today but I doubt this had much impact on the stock. The rally seemed to stall. Shares spent the session moving sideways in the $32.00-32.40 zone. I don't see any changes from my prior comments.

We are suggesting a trigger to open bullish positions at $32.75. We'll place our stop loss under Monday's low. More conservative traders might want to wait for JPM to breakout past technical resistance at its 100-dma instead (currently near $33.22).

Our multi-week target is $37.50.

Trigger @ 32.75

- Suggested Positions -

buy the 2012Jan $33 call (JPM1221A33)

- or -

buy the February $35 call (JPM1218B35)

Entry on December xx at $ xx.xx
Earnings Date 01/13/12 (unconfirmed)
Average Daily Volume = 45.3 million
Listed on December 20, 2011


OpenTable, Inc. - OPEN - close: 42.74 change: -2.05

Stop Loss: 39.45
Target(s): 48.50
Current Option Gain/Loss: + 46.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: After yesterday's +12% surge OPEN gave up -4.5% on the news its executive chairman was resigning. We discussed last night that OPEN was trading down after hours on this news.

Look for a dip or buy a bounce in the $42-40 zone.

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: 78.18 change: +1.48

Stop Loss: 74.25
Target(s): 79.75
Current Option Gain/Loss: +225.8%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/21 update: It was a strong day for PM. The stock broke out past resistance at $77.00 and surged to new all-time highs. Readers may want to take profits now. The newsletter's exit target is $79.75. We are raising our stop loss to $74.90.

Earlier Comments:
FYI: The Point & Figure chart for PM is bullish with a $95 target.

- Suggested Positions -

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

12/21 new stop loss @ 74.90, readers may want to take profits now (+225%)
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: 106.49 change: -0.05

Stop Loss: 98.75
Target(s): 109.50
Current Option Gain/Loss: +24.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: Shares of SAM hit the brakes today. The stock dipped to $104.74 this morning but recovering to almost unchanged on the session. I don't see any changes from my prior comments but more conservative traders might want to raise their stop loss toward the $102 area.

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: 65.21 change: +0.19

Stop Loss: 62.49
Target(s): 69.75
Current Option Gain/Loss: -24.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: VAR spent the session consolidating sideways near resistance at $65.00. The high today was $65.44. I am repeating my comments from yesterday. 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


Waters Corp. - WAT - close: 73.73 change: -0.38

Stop Loss: 70.75
Target(s): 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/21 update: There was no follow through on yesterday's bounce in WAT. Shares hit $74.43 this morning and fell to close down -0.5%. We're not giving up yet. We'll wait for WAT to show a little more strength. I am suggesting a trigger to buy calls at $74.55 with a stop loss at $70.75. Our target is $79.50.

Trigger @ 74.55

- Suggested Positions -

buy the Jan $75 call (WAT1221A75)

Entry on December xx at $ xx.xx
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 787 thousand
Listed on December 20, 2011


PUT Play Updates

AGCO Corp. - AGCO - close: 41.52 change: -0.49

Stop Loss: 42.55
Target(s): 35.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/21 update: There was no follow through on AGCO's bounce from Tuesday. There is still a chance shares might break down under support at $40.00. We'll tweak our entry point and move the trigger to buy puts down to $39.75. We'll adjust our stop loss to $42.55.

If triggered at $39.75 we want to keep our position size small.

Trigger @ 39.75 (small positions)

- Suggested Positions -

buy the Jan $40 PUT (AGCO1221M40)

12/21/11 adjust trigger to $39.75, stop to $42.55

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: 33.00 change: -1.39

Stop Loss: 35.05
Target(s): 30.05
Current Option Gain/Loss: -14.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: BMC almost completely erased yesterday's gains with a -4.0% plunge. This is probably a reaction to ORCL's disappointing earnings report last night. Shares of BMC did hit an intraday low of $32.71 and that's enough to trigger out put play (trigger was 32.75). If you're looking for an entry point I'd wait for a new relative low (under 32.70).

- Suggested Positions -

Long 2012Jan $32.50 PUT (BMC1221M32.5) entry $1.05

12/21/11 trigger hit at $32.75

Entry on December 21 at $32.75
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 14, 2011


Check Point Software - CHKP - close: 52.14 change: -2.47

Stop Loss: 55.05
Target(s): 48.00
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: CHKP has erased yesterday's +3% bounce with a -4.5% drop today. This move in CHKP is also influenced by the disappointing results from Oracle (ORCL). CHKP did manage a small bounce off its lows near $51.15. Volume was heavy on today's decline. I am not suggesting new positions.

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: 59.87 change: +1.23

Stop Loss: 60.10
Target(s): 51.00
Current Option Gain/Loss: -58.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: The oversold bounce in COH continues. Shares outperformed today with a +2.0% gain. Just as expected the stock rallied toward the next level of resistance near $60.00. The high today was $59.90. If the market is positive again tomorrow then COH will likely hit our stop loss at $60.10.

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: 52.52 change: +0.92

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:
12/21 update: ESI is still trying to rebound and it's doing a good job of it today with a +1.7% gain. Shares stalled at short-term technical resistance near the simple 10-dma. Since we're still sitting on the sidelines here it doesn't hurt to wait and watch. If the bounce continues tomorrow we will probably drop ESI as a bearish candidate.

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: 49.20 change: +0.09

Stop Loss: 50.65
Target(s): 45.15
Current Option Gain/Loss: -54.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: FLR underperformed the market with a minor bounce. I am not suggesting new positions at this time. More conservative traders may 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: 19.45 change: -0.29

Stop Loss: 20.55
Target(s): 16.75
Current Option Gain/Loss: - 40.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: Tech stocks underperformed today and JNPR was no exception. The stock lost -1.4% but that follows yesterday's +8.9% surge. I remain very cautious here. More conservative traders may want to exit early or tighten their stops closer to the $20.00 level.

(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: 70.72 change: +0.43

Stop Loss: 71.05
Target(s): 60.50
Current Option Gain/Loss: -69.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: MON tried to breakout past the $71.00 level this morning but failed twice. That doesn't mean it won't happen tomorrow if the market continues to move higher. We are not suggesting new positions at this time and more conservative traders may want to exit early now.

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

12/21/11 readers may want to exit early now

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: 44.66 change: -0.27

Stop Loss: 46.15
Target(s): 42.75
Current Option Gain/Loss: Dec$45p: +111.1% & Jan$45P: + 0.0%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
12/21 update: There was no follow through on TMO's bounce on Tuesday. Shares underperformed with a -0.6% decline today. I am not suggesting new positions at this time. More conservative traders might want to consider lowering their stop loss closer to the $45.00 level. Or you could exit now with the put option at breakeven.

- 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: 65.68 change: +0.21

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:
12/21 update: WLP is still trying to bounce. If we see WLP close over $66.00 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: -47.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/21 update: WPI extended its bounce to two days in a row. Shares are nearing what should be short-term resistance near $62.00. The exponential 200-dma at $62.75 should also be overhead resistance. We're leaving our stop at $63.05. More conservative traders might want to adjust their stops lower in case the bounce continues. 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