Editor's Note:

The U.S. markets saw widespread gains, led by financials, even though Italian bond yields continue to rise.

-James

Current Portfolio:


CALL Play Updates

The Andersons, Inc. - ANDE - close: 44.39 change: +0.67

Stop Loss: 43.40
Target(s): 49.75
Current Option Gain/Loss: -46.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/29 update: ANDE managed to hold support near $44.00. Shares managed to close up +1.5% on the session. This bounce could be used as an entry point but we are raising our stop loss to $43.40.

(small positions) - Suggested Positions -

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

12/29/11 new stop loss @ 43.40
12/28/11 new stop loss @ 42.75
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: 74.11 change: +0.85

Stop Loss: 71.40
Target(s): 77.00
Current Option Gain/Loss: +13.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/29 update: BA made headlines today when the U.S. and Saudi Arabia signed a deal to sell Boeing's F-15 fighters. Shares of BA didn't move that much but did see a morning rally. The stock closed up +1.1% but remains under resistance near $75.00.

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

12/28/11 new stop loss @ 71.40
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


Dover Corp. - DOV - close: 57.61 change: -1.31

Stop Loss: 56.75
Target(s): 64.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/29 update: DOV recovered a good chunk of yesterday's losses with a +1.4% bounce today. Yet the stock struggled with the $58.50 level most of the session and DOV is still underneath its 200-dma. I am suggesting readers wait for a breakout higher with a trigger to buy calls at $59.55.

Earlier Comments:
More conservative traders may want to wait for DOV to rally past the $60.00 level instead since $60.00 might be considered round-number resistance. If we are triggered at $59.55 our target is $64.50. FYI: The Point & Figure chart for DOV is bullish with a $75 target.

Trigger @ 59.55

- Suggested Positions -

buy the Jan $60 call (DOV1221A60)

Entry on December xx at $ xx.xx
Earnings Date 01/27/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on December 27, 2011


Hi Tech Pharmacal Co. - HITK - close: 38.96 change: +0.75

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

Comments:
12/29 update: HITK also recovered a good portion of yesterday's losses with a strong +1.9% bounce today. Traders bought the dip near short-term support at $38.00. Yet HITK is still under round-number resistance near $40.00. The current plan is to buy calls (small positions) at $40.15 with a stop 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: 89.86 change: +1.14

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:
12/29 update: The transportation indices were showing relative strength today. The IYT rebounded +1.2% but remains under resistance near $90.00 and its 200-dma. There is no change from my prior comments. Our plan is to use a trigger at $90.75 to open bullish positions. 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: 33.42 change: +0.77

Stop Loss: 30.35
Target(s): 37.50
Current Option Gain/Loss: Jan$33c: +23.8% & Feb$35c: +14.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/29 update: JPM completely erased yesterday's losses with a strong +2.3% gain today. Financials as a sector were showing leadership today in spite of rising yields on Italian bonds. JPM does have some short-term resistance near $33.75 and $34.00. I would hesitate to open new bullish positions here.

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


O'Reilly Automotive - ORLY - close: 80.99 change: +0.02

Stop Loss: 79.75
Target(s): 87.00
Current Option Gain/Loss: Jan$85c: -60.0% & Feb$85c: -25.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/29 update: Hmm... the action in ORLY today is worrisome. The stock tried to rally this morning but spent the day drifting sideways to close virtually unchanged. The lack of participation in the market's rally is not a good sign. I am not suggesting new positions at this time.

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: 79.10 change: +0.59

Stop Loss: 76.75
Target(s): 79.50
Current Option Gain/Loss: +283.9%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/29 update: PM opened higher and closed up +0.75% on the session. The stock looks poised to hit our exit target at $79.50 tomorrow. More aggressive traders may want to aim higher but I'm a little concerned the $80.00 level might be round-number, psychological resistance. We are raising our stop loss up to $76.75.

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

12/29 new stop loss @ 76.75
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: +0.54

Stop Loss: 61.90
Target(s): 68.00
Current Option Gain/Loss: Jan$65c: +40.0% & Feb$65c: +25.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/29 update: TJX completely erased yesterday's losses. The stock is hovering under short-term resistance at $65.50. You could buy a breakout past this level but if you do I'd use a much tighter stop loss.

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: 43.72 change: +0.51

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:
12/29 update: TRMB produced a decent bounce (+1.1%) off the $43.00 level but we're still waiting for a breakout past resistance near $45.00. 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: 66.83 change: +1.06

Stop Loss: 64.40
Target(s): 69.25
Current Option Gain/Loss: + 3.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/29 update: VAR has made it back to its recent highs with a +1.6% gain today. We are raising our stop loss to $64.40. I am not suggesting new positions at this time.

- Suggested Positions -

Long JAN $65 call (VAR1221A65) entry $2.65

12/29/11 new stop loss @ 64.40
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: 74.14 change: +0.88

Stop Loss: 70.75
Target(s): 79.50
Current Option Gain/Loss: -31.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/29 update: There was no follow through on WAT's bearish decline yesterday but I remain cautious here. No new positions at this time. Readers may want to raise their stop loss.

- Suggested Positions -

Long Jan $75 call (WAT1221A75) entry $2.25

12/28/11 Traders may want to exit early now.

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


Whole Foods Market, Inc. - WFM - close: 69.94 change: +0.45

Stop Loss: 67.75
Target(s): 74.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/29 update: WFM spent the day consolidating sideways in the $69.50-70.00 zone. There was a brief spike to $70.14. I don't see any changes from my Wednesday night comments. We are waiting for a stronger breakout. I am suggesting a trigger to open bullish positions at $70.25. If triggered we'll use a stop loss at $67.75. Our target is $74.00. More aggressive traders may want to aim higher. FYI: The Point & Figure chart for WFM is bullish with an $85 target.

Trigger @ 70.25

- Suggested Positions -

buy the 2012Jan $70 call (WFM1221A70)

Entry on December xx at $ xx.xx
Earnings Date 02/08/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on December 28, 2011


PUT Play Updates

BMC Software Inc. - BMC - close: 32.61 change: +0.31

Stop Loss: 34.55
Target(s): 30.05
Current Option Gain/Loss: -19.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/29 update: BMC's oversold bounce today produced a +0.9% gain. Broken support near $33.00 should be new short-term resistance. I am not suggesting new positions at this time.

- Suggested Positions -

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

12/28/11 new stop loss @ 34.55
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: 60.61 change: +0.35

Stop Loss: 62.55
Target(s): 56.00
Current Option Gain/Loss: Dec$60p: -12.5% & Jan$60p: -32.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/29 update: The market's widespread gains today helped WPI hold support near the $60.00 level. I'm still expecting a breakdown but we do not want to open new positions here.

- 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

12/28/11 new stop loss @ 62.55
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