Editor's Note:

The U.S. market was quiet on Tuesday after a three-day Christmas weekend. The major indices drifted sideways.

Our new play on ORLY has been triggered.

-James

Current Portfolio:


CALL Play Updates

The Andersons, Inc. - ANDE - close: 45.49 change: +0.19

Stop Loss: 42.45
Target(s): 49.75
Current Option Gain/Loss: - 9.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27 update: It was a quiet day for ANDE. Shares bounced off short-term and round-number support at $45.00 to post a minor gain but still enough to outperform the major indices. FYI: The Point & Figure chart for ANDE is bullish with a $74 target.

(small positions) - Suggested Positions -

Long Jan $45 call (ANDE1221A45) entry $1.60
(readers might want to consider buying February calls instead)

12/23/11 triggered at $45.25

Entry on December 23 at $45.25
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 211 thousand
Listed on December 21, 2011


Boeing Co. - BA - close: 74.27 change: +0.30

Stop Loss: 69.85
Target(s): 77.00
Current Option Gain/Loss: +24.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27 update: BA rebounded off this morning's low near $73.40 and came close to erasing Friday's minor decline. Volume was today was lighter than Friday's. I'd prefer to buy new calls on a dip or a bounce near $72.50. More conservative traders might want to raise their stop loss somewhere into the $71-72 zone.

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

12/22/11 new stop loss @ 69.85
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: 39.29 change: +1.14

Stop Loss: 36.70
Target(s): 44.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27 update: Hmm... I am starting to think that HITK is not going to see a dip to $37.25. Therefore we need to adjust our entry point strategy. More aggressive traders may want to buy calls now. I am suggesting a new trigger to buy calls at $40.15 with a stop loss at $38.85. We want to keep our position size small to limit our risk.

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.

New Trigger, buy calls @ 40.15, stop loss @ 38.85 (small positions)

- Suggested Positions -

buy the 2012Jan $40 call (HITK1221A40)

12/27/11 new trigger @ 40.15, stop loss 38.85
12/22/11 not open yet. New Trigger @ 37.25, stop 36.70
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


iShares Transportation - IYT - close: 90.18 change: +0.05

Stop Loss: 87.45
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/27 update: The rally in the transports has stalled. Shares of the IYT are drifting sideways. The high today was $90.53. There is no change from my prior comments. More aggressive traders may want to launch positions now. The newsletter is suggesting a trigger to open positions at $90.75. I have listed individual targets depending on which month you choose to play.

Trigger @ 90.75

- Suggested Positions -

buy the Jan $95 call (IYT1221A95)
target 94.75

- or -

buy the Feb $95 call (IYT1218B95)
target 98.50

Entry on December xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 582 thousand
Listed on December 22, 2011


JPMorgan Chase & Co - JPM - close: 33.03 change: -0.54

Stop Loss: 30.35
Target(s): 37.50
Current Option Gain/Loss: Jan$33c: +11.4% & Feb$35c: + 0.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27 update: The financial sector stumbled a little bit today. The banking indices were down -0.6% to -0.8%. Shares of JPM underperformed its peers with a -1.6% pull back and closed near its simple 100-dma. I would consider new positions now or you can wait for a dip closer to $32.50 instead.

Our multi-week target is $37.50.

- Suggested Positions -

Long 2012Jan $33 call (JPM1221A33) entry $1.05

- or -

Long February $35 call (JPM1218B35) entry $0.90

Entry on December 22 at $32.75
Earnings Date 01/13/12 (unconfirmed)
Average Daily Volume = 45.3 million
Listed on December 20, 2011


OpenTable, Inc. - OPEN - close: 40.70 change: -0.08

Stop Loss: 39.45
Target(s): 48.50
Current Option Gain/Loss: - 30.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27 update: OPEN quietly drifted sideways, hovering about support near $40 and its 50-dma. I would consider new positions now or you can wait for a stronger bounce off the $40.00 level.

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


O'Reilly Automotive - ORLY - close: 81.70 change: +0.15

Stop Loss: 79.75
Target(s): 87.00
Current Option Gain/Loss: Jan$85c: -30.0% & Feb$85c: -12.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27 update: Our new trade on ORLY is not off to the best start but the trade is open. Shares spent most of the day hovering under resistance near $82.00. There was a brief afternoon spike to $82.08 before the stock pared its gains. Our trigger was hit at $82.05. At this point I'd prefer to wait for ORLY to hit a new high (maybe 82.25) before initiating new positions.

Earlier Comments:
Our multi-week target is $87.00 but the $85.00 level might be round-number resistance so we'll need to stay flexible. FYI: The Point & Figure chart for ORLY is bullish with a $103 target.

- Suggested Positions -

Long Jan $85 call (ORLY1221A85) entry $0.50

- or -

Long Feb $85 call (ORLY1218B85) entry $1.60

Entry on December 27 at $82.05
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 941 thousand
Listed on December 24, 2011


Phillip Morris Intl. - PM - close: 78.83 change: +0.08

Stop Loss: 75.75
Target(s): 79.50
Current Option Gain/Loss: +266.0%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/27 update: Hmm... readers will want to seriously consider an exit now. PM rallied to $79.42 this morning before fading back to a +0.1% gain. Our exit target is $79.50. I am not suggesting new positions at this time.

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

12/24 new stop loss @ 75.75, adjusted target to $79.50
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


TJX Companies - TJX - close: 65.38 change: +0.07

Stop Loss: 61.90
Target(s): 68.00
Current Option Gain/Loss: Jan$65c: +45.0% & Feb$65c: +25.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/27 update: It turned out to be a quiet day for TJX too. Shares drifted sideways above the $65.00 level. I am not suggesting new positions at this time but a dip or a bounce near $64.00 would work as an entry point.

Earlier Comments:
TJX doesn't move super fast so we'll need some patience. Our target is $68.00. FYI: The Point & Figure chart for TJX is bullish with a $78 target.

- Suggested Positions -

Long 2012Jan $65 call (TJX1221A65) Entry $1.00

- or -

Long Feb $65 call (TJX1218B65) Entry $1.75

Entry on December 22 at $64.10
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on December 21, 2011


Trimble Navigation Ltd. - TRMB - close: 44.60 change: -0.03

Stop Loss: 42.70
Target(s): 49.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/27 update: TRMB is still consolidating sideways under resistance near $45.00. We are still waiting on a breakout past this level. I am suggesting a trigger to buy calls at $45.25 with a stop loss at $42.70. Our target is $49.50. FYI: The Point & Figure chart for TRMB is bullish with a $63 target.

Trigger @ 45.25

- Suggested Positions -

buy the Jan $45 call (TRMB1221A45)

Entry on December xx at $ xx.xx
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 544 thousand
Listed on December 22, 2011


Varian Medical Sys. - VAR - close: 66.68 change: +0.47

Stop Loss: 62.49
Target(s): 69.25
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27 update: Traders bought the dip in VAR at $66.00 this morning and the stock displayed relative strength with a +0.7% gain. I am not suggesting new positions at this time. Please note I am adjusting our exit target down to $69.25.

- Suggested Positions -

Long JAN $65 call (VAR1221A65) entry $2.65

12/27/11 adjust exit target to $69.25
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: 74.62 change: +0.03

Stop Loss: 70.75
Target(s): 79.50
Current Option Gain/Loss: -15.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27 update: WAT bounced near short-term support at $74.00 again. The stock managed to tag a new two-week high intraday before paring its gains to virtually unchanged. More conservative traders may want to adjust their stop loss higher.

- Suggested Positions -

Long Jan $75 call (WAT1221A75) entry $2.25

Entry on December 22 at $74.55
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 787 thousand
Listed on December 20, 2011


PUT Play Updates

BMC Software Inc. - BMC - close: 33.00 change: -0.11

Stop Loss: 35.05
Target(s): 30.05
Current Option Gain/Loss: -28.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/27 update: Today was a non-event for BMC. Shares continued to drift sideways near $33.00 for the third day in a row. Readers may want to wait for a new relative low, under $32.70, before initiating new positions.

- 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


Watson Pharmaceuticals - WPI - close: 61.37 change: -0.71

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:
12/27 update: WPI underperformed the market with a -1.1% loss. Shares are fading from short-term resistance near $62.00. This could be used as a new entry point but traders might want to consider a tighter stop loss.

- 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