Editor's Note:

The trading year for 2011 ended on a quiet note. Stocks drifted lower. We are updating some stop losses and suggesting some early exits on ANDE, ORLY, and PM. We've also removed TRMB as a candidate.

-James

Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 73.35 change: -0.76

Stop Loss: 71.75
Target(s): 77.00
Current Option Gain/Loss: -14.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/31 update: BA did not make any progress this week. Shares are consolidating sideways in the $73-75 zone. I am growing cautious on this stock and we are raising our stop loss to $71.75. More conservative traders may want to raise their stop closer to $73.00 instead. I am not suggesting new positions at this time.

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

12/31/11 new stop loss @ 71.75
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.

chart:

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: 58.05 change: -0.37

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:
12/31 update: Friday proved to be another quiet session with DOV consolidating sideways under resistance at its 200-dma. There is no change from my prior comments. 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)

chart:

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: 38.89 change: -0.07

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

Comments:
12/31 update: HITK tried to rally midday on Friday but reversed at resistance near $40.00. We are still waiting for a breakout. 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

chart:

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: 89.47 change: -0.39

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:
12/31 update: The mid-December rally in transports has stalled. The IYT has been consolidating sideways near resistance at its simple 200-dma and near the $90.00 level. We are still waiting for a breakout to new relative highs. 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

chart:

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


JPMorgan Chase & Co - JPM - close: 33.25 change: -0.17

Stop Loss: 31.70
Target(s): 37.50
Current Option Gain/Loss: Jan$33c: +14.2% & Feb$35c: + 8.8%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
12/31 update: The bounce in JPM has also stalled. Shares spent this past week consolidating sideways. JPM should do well if the financials rally but I am growing concerned with our time frame, which needs to be adjusted. JPM is due to report earnings on January 13th. We do not want to hold over the report. That only gives us eight more trading days. I am suggesting investors turn cautious. We are raising our stop loss up to $31.70. No new positions at this time.

- Suggested Positions -

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

- or -

Long February $35 call (JPM1218B35) entry $0.90

12/31/11 new stop loss @ 31.70
12/31/11 adjust our time frame. We want to exit prior to the January 13th earnings report.

chart:

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


TJX Companies - TJX - close: 64.55 change: -0.83

Stop Loss: 62.75
Target(s): 68.00
Current Option Gain/Loss: Jan$65c: + 5.0% & Feb$65c: + 5.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/31 update: Shares of TJX underperformed on Friday with a -1.2% decline. This has taken a chunk out of our January calls. I am growing cautious here after a week of TJX failing at the $65.50 level. We will raise our stop loss up to $62.75. More aggressive traders will want to keep their stop wider. I am not suggesting new positions at this time but we can look for short-term support in the $64.00-63.00 zone.

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

12/31/11 new stop loss @ 62.75

chart:

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


Varian Medical Sys. - VAR - close: 66.83 change: +1.06

Stop Loss: 65.35
Target(s): 69.25
Current Option Gain/Loss: +11.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/31 update: Readers may want to consider an early exit on our VAR trade. The stock outperformed the market with a +0.4% gain on Friday. Yet shares were retreating sharply from their intraday high at $67.82. I am growing cautious here. We are raising our stop loss up to $65.35. I am not suggesting new positions at this time.

- Suggested Positions -

Long JAN $65 call (VAR1221A65) entry $2.65

12/31/11 new stop loss @ 65.35
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

chart:

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: 74.05 change: -0.09

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:
12/31 update: I remain cautious on WAT. The bounce from the bottom of its trading range has stalled. You could argue the bounce has reversed. We're not quite ready to give up just yet. We're not suggesting new positions at this time. WAT needs to produce a convincing move past resistance near $75.00. 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.

chart:

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: 69.58 change: -0.36

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:
12/31 update: WFM failed to make any progress on Friday. Shares were content to drift sideways under resistance near $70.00. We are waiting for a breakout higher. 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)

chart:

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

Autodesk, Inc. - ADSK - close: 30.33 change: -0.07

Stop Loss: 31.25
Target(s): 25.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/31 update: Friday was also a quiet day for ADSK with the stock moving sideways in a narrow range. Nothing has changed for us. We are waiting for a breakdown. The late November low was $29.76. I am suggesting a trigger to buy puts at $29.65 with a stop loss at $31.25, which is just above this week's high.

Our exit target is $25.50. FYI: The Point & Figure chart for ADSK is bearish with a $23 target.

Trigger @ 29.65

- Suggested Positions -

buy the 2012Jan $30 PUT (ADSK1221M30)

- or -

buy the Feb $28 PUT (ADSK1218N28)

chart:

Entry on December xx at $ xx.xx
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on December 29, 2011


BMC Software Inc. - BMC - close: 32.78 change: +0.17

Stop Loss: 33.55
Target(s): 30.05
Current Option Gain/Loss: -19.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/31 update: The oversold bounce in BMC continued for a second day but gains were mild. Shares struggled with prior support and now new resistance at $33.00 plus the 10-dma. I would still consider new positions now. We are going to try and reduce our risk by adjusting the stop loss down to $33.55.

- Suggested Positions -

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

12/31/11 new stop loss @ 33.55
12/28/11 new stop loss @ 34.55
12/21/11 trigger hit at $32.75

chart:

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: 60.34 change: -0.27

Stop Loss: 62.55
Target(s): 56.00
Current Option Gain/Loss: Dec$60p: -12.5% & Jan$60p: -30.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/31 update: Thursday's bounce from the $60 level has already stalled and WPI drifted lower on Friday. I would not open new positions here. We can look for a new lower high near $62 or wait for a breakdown to new relative lows before considering new positions.

- 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

chart:

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


CLOSED BULLISH PLAYS

The Andersons, Inc. - ANDE - close: 43.66 change: -0.73

Stop Loss: 43.40
Target(s): 49.75
Current Option Gain/Loss: -62.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/31 update: We are giving up on ANDE. The stock underperformed the market again on Friday with a -1.6% decline. The breakdown under what should have been short-term support near $44.00 is bearish. We're suggesting an early exit immediately.

(small positions) - Suggested Positions -

Jan $45 call (ANDE1221A45) entry $1.60 exit $0.60 (-62.5%)
(readers might want to consider buying February calls instead)

12/31/11 exit early
12/29/11 new stop loss @ 43.40
12/28/11 new stop loss @ 42.75
12/23/11 triggered at $45.25

chart:

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


O'Reilly Automotive - ORLY - close: 79.95 change: -1.04

Stop Loss: 79.75
Target(s): 87.00
Current Option Gain/Loss: Jan$85c: -80.0% & Feb$85c: -40.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/31 update: ORLY underperformed the market again with a -1.2% drop on Friday. The stock's bullish trend is in jeopardy. Friday's close under $80.00, which should have been short-term support, is bearish. The low on Friday was $79.94. I am suggesting we exit positions immediately.

- Suggested Positions -

Jan $85 call (ORLY1221A85) entry $0.50 exit $0.10 (-80.0%)

- or -

Feb $85 call (ORLY1218B85) entry $1.60 exit $0.95 (-40.6%)

12/31/11 exit positions immediately.

chart:

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: 78.48 change: -0.62

Stop Loss: 76.75
Target(s): 79.50
Current Option Gain/Loss: +239.2%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
12/31 update: I am suggesting we take profits and exit our PM trade. The stock hit a Friday morning high of $79.25 and then dropped toward its lows for the week to settle with a -0.7% decline. We want to exit positions immediately.

- Suggested Positions -

2012 Jan $75 call (PM1221A75) Entry $1.12 exit 3.80 (+239.2%)

12/31 exit early
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

chart:

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


Trimble Navigation Ltd. - TRMB - close: 43.40 change: -0.32

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

Comments:
12/31 update: We are growing impatient with TRMB. The last few days we've been waiting for a breakout past resistance near $45.00 but that hasn't happened yet. Tonight we are removing TRMB as a candidate with the trade unopened. Readers may want to keep TRMB on their watch list for a close over resistance at $45.00 as a potential bullish entry point.

Trigger @ 45.25

Trade did not open.

12/31/11 TRMB removed as an active candidate.

chart:

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