Editor's Note:

Worries over Europe's debt struggles weighed on the markets this morning but stocks recovered to close nearly flat on the session.

Our new DE play has been triggered.

-James

Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 74.33 change: +0.11

Stop Loss: 71.75
Target(s): 77.00
Current Option Gain/Loss: - 8.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: BA made headlines today with its announcement that it would close its Wichita, Kansas plant by the end of 2013. More than 2,100 people will lose their jobs as BA shuttles work to other plants. One of BA's vice presidents said that the "market for defense work has changed dramatically in the past 18 months" (source: AP).

Meanwhile the stock bounced off its simple rising 10-dma to close relatively flat on the session. I am not suggesting new positions at this time but readers may want to raise their exit targets toward the $78-79.50 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

12/31/11 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.

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


Deere & Co. - DE - close: 79.31 change: +1.96

Stop Loss: 78.45
Target(s): 84.75
Current Option Gain/Loss: - 2.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: Our new play on DE has already been triggered. Shares opened near $79.00, rallied past $81.00, but pared its gains to close near its simple 200-dma. DE managed to post a +1.4% advance, outperforming the major indices. Our trigger to buy calls was hit at $80.50. If the market opens positive again tomorrow I would still open positions now at current levels.

Our target is $84.75. More aggressive traders could aim higher. FYI: The Point & Figure chart for DE is bullish with a $96 target.

- Suggested Positions -

Long 2012Jan $80 call (DE1221A80) entry $2.05

Entry on January 04 at $80.50
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 3.3 million
Listed on January 03, 2012


Dover Corp. - DOV - close: 58.17 change: -0.92

Stop Loss: 56.75
Target(s): 64.50
Current Option Gain/Loss: -60.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: DOV underperformed the market today. Wednesday's -1.5% decline nearly erased yesterday's gains. The stock is hovering near short-term support at $58.00 and its 10-dma. I warned readers to expect a dip into the $58.50-58.00 zone. We can use this dip as a new entry point or more conservative traders could wait for a new bounce past the simple 200-dma instead ($59.05).

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.

- Suggested Positions -

Long Jan $60 call (DOV1221A60) entry $1.25

01/03/12 DOV gapped open higher at $59.57, above our trigger, opening this trade.

Entry on January 03 at $59.57
Earnings Date 01/27/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on December 27, 2011


Hi Tech Pharmacal Co. - HITK - close: 39.45 change: +0.40

Stop Loss: 37.95
Target(s): 44.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: HITK outperformed the market with a +1.0% gain but that doesn't tell the whole story. Shares saw an intraday dip and bounce off support near $38.00 and its rising 40-dma as well. I am adjusting our stop loss to $37.95.

The current plan is to buy calls (small positions) at $40.15 with a stop at $37.95. 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 @ 37.95 (small positions)

- Suggested Positions -

buy the 2012Jan $40 call (HITK1221A40)

01/04/12 still not open yet. Adjust stop loss to $37.95
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: 90.64 change: +0.30

Stop Loss: 87.45
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Jan$95c: - 100% & Feb$95c: -24.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/04 update: Traders bought the dip in the transports midday. This ETF bounced off a test of its 10-dma and 200-dma. I would use this bounce today as a new bullish entry point to buy calls.

- Suggested Positions -

Long Jan $95 call (IYT1221A95) entry $0.20
target 94.75

- or -

Long Feb $95 call (IYT1218B95) entry $1.45
target 98.50

01/03/12 IYT gapped open higher at $91.20, above our trigger at $90.75

Entry on January 03 at $91.20
Earnings Date --/--/--
Average Daily Volume = 582 thousand
Listed on December 22, 2011


JPMorgan Chase & Co - JPM - close: 34.95 change: +0.22

Stop Loss: 32.35
Target(s): 37.50
Current Option Gain/Loss: Jan$33c: +121.9% & Feb$35c: +88.8%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/04 update: Shares of JPM began trading ex-dividend today for the company's next quarterly cash dividend payable on January 30th. JPM recovered off its morning lows to close up +0.6%, which outperformed most of its peers. I don't see any changes from yesterday's comments. More conservative traders may want to seriously consider just taking profits right here with JPM at resistance near $35.00 and its 150-dma.

Don't forget that we plan to exit ahead of the January 13th earnings report.

- Suggested Positions -

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

- or -

Long February $35 call (JPM1218B35) entry $0.90

01/03/12 new stop loss @ 32.35, readers may want to take profits now
2012Jan $33 call +111.4%, Feb $35 call +81.1%
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.

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: 64.43 change: +0.72

Stop Loss: 62.75
Target(s): 68.00
Current Option Gain/Loss: Jan$65c: + 5.0% & Feb$65c: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/04 update: TJX was showing a little bit of relative strength today. Traders bought the morning dip and the stock bounced to a +1.1% gain. Tomorrow could be volatile as several major retailers will announce their December same-store sales numbers. I am not suggesting new positions at this time.

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

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


Waters Corp. - WAT - close: 74.45 change: -1.49

Stop Loss: 72.75
Target(s): 79.50
Current Option Gain/Loss: -28.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: Uh-oh! WAT gave back a significant portion of yesterday's gains. The stock underperformed today with a -1.9% loss. The combination of yesterday's failure at technical resistance and today's drop is bearish. Readers may want to exit early immediately. I am raising our stop loss to $72.75.

- Suggested Positions -

Long Jan $75 call (WAT1221A75) entry $2.25

01/04/12 new stop loss @ 72.75
01/03/12 new stop loss @ 71.75
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: 71.49 change: +1.85

Stop Loss: 67.75
Target(s): 74.00
Current Option Gain/Loss: +21.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: WFM displayed relative strength today. Shares surged from $69.40 this morning to hit new multi-week highs near $71.50 this afternoon. WFM closed up +2.6%.

Readers might want to raise their stop loss closer to the $69.00 area.

- Suggested Positions -

Long 2012Jan $70 call (WFM1221A70) entry $1.90

01/03/12 WFM gapped open higher at $70.55, above our trigger (70.25)

Entry on January 03 at $70.55
Earnings Date 02/08/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on December 28, 2011


PUT Play Updates

Autodesk, Inc. - ADSK - close: 30.21 change: -0.60

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:
01/04 update: ADSK erased yesterday's bounce and underperformed the market with a -1.9% decline. Yet the stock is still hovering near support at $30.00. There is no change from my prior comments.

We are waiting for a breakdown. The late November low was $29.76. I am suggesting a trigger to buy puts at $29.65. 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)

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


Fossil, Inc. - FOSL - close: 78.08 change: -1.19

Stop Loss: 83.05
Target(s): 73.50
Current Option Gain/Loss: +52.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: FOSL couldn't get past resistance near $80.00 this morning. Shares sank to new multi-months lows. I would still consider new positions now.

Earlier Comments:
Our target is $73.50. More conservative traders may want to exit in the $75 area instead. FYI: The Point & Figure chart for FOSL is bearish with a $71 target.

- Suggested Positions -

Long 2012Jan $75 PUT (FOSL1221M75) entry $0.95

Entry on January 03 at $81.12
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 31, 2011


Tractor Supply Company - TSCO - close: 69.37 change: -0.09

Stop Loss: 72.55
Target(s): 65.50
Current Option Gain/Loss: - 6.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: TSCO spent most of the day in a $1.00 range. Shares struggled with short-term resistance near $70.00 this afternoon. The action today looks like a new bearish entry point to buy puts.

Earlier Comments:
We will aim for a drop to $65.50 but more aggressive traders may want to aim for the $62-60 zone instead.

- Suggested Positions -

Long Jan $70 PUT (TSCO1221M70) entry $2.20

Entry on January 03 at $69.50
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 550 thousand
Listed on December 31, 2011


Watson Pharmaceuticals - WPI - close: 60.31 change: -0.32

Stop Loss: 62.55
Target(s): 56.00
Current Option Gain/Loss: Jan$60p: -40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/04 update: WPI underperformed the markets with a -0.5% decline but shares are still hovering above support near $60.00. I am not suggesting new positions at this time.

- Suggested Positions -

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