Editor's Note:

The U.S. markets have been unable to build on Tuesday's rally higher. There are pockets of strength but for the most part equities seem range bound.

We are suggesting an early exit on DOV and WAT since they're not performing. We've also removed ADSK as a candidate but I would keep it on your watch list. I've updated multiple stop losses tonight as well.

-James

Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 73.98 change: +0.45

Stop Loss: 72.65
Target(s): 77.00
Current Option Gain/Loss: -37.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: BA ended the week on an up note but shares have been stuck in the $73-75 zone for more than two weeks now. Readers may want to consider an early exit now since BA is not performing. Traders did buy the dip again at the bottom of its trading range on Friday morning. This past week's low was $72.74. I am raising our stop loss to $72.65. 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

01/07/12 new stop loss @ 72.65
01/05/12 new stop loss @ 72.25
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


Deere & Co. - DE - close: 82.30 change: +0.66

Stop Loss: 78.45
Target(s): 84.75
Current Option Gain/Loss: +44.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: DE continues to extend its gains. Shares were up every day this week. The stock managed to breakout past resistance near $80.00 and its simple 200-dma. Both levels should now be new short-term support. More conservative traders may want to raise their stop loss. DE is arguably short-term overbought and due for a dip. I am not suggesting new positions at this time.

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

chart:

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


Hi Tech Pharmacal Co. - HITK - close: 42.24 change: +1.25

Stop Loss: 39.40
Target(s): 44.50
Current Option Gain/Loss: +82.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: Thus far our patience on HITK is paying off. Shares delivered a strong week. The stock is up three days in a row after bouncing near its up trend line of support near the 40 and 50-dma. The breakout past resistance at $40.00 is bullish. The $40 level should now offer new support. We are raising our stop loss to $39.40. I am not suggesting new positions at current levels.

Earlier Comments:
We want to keep our position size small to limit our risk. 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.

(small positions) - Suggested Positions -

Long 2012Jan $40 call (HITK1221A40) entry $1.45

01/07/12 new stop loss @ 39.40
01/05/12 trade opened at $40.15 (trigger)
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

chart:

Entry on January 05 at $40.15
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 298 thousand
Listed on December 20, 2011


iShares Transportation - IYT - close: 90.31 change: -0.11

Stop Loss: 88.75
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Jan$95c: -75.0% & Feb$95c: -37.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/07 update: The transportation ETF looks like it wants to breakout higher but it's just not seeing any follow through. Shares do have a bullish trend of higher lows, but I would be cautious on launching new positions. Friday's high was $91.13. Readers may want to wait for a move past $91.25 or last week's high of $91.81 before considering new positions. We are raising our stop loss to $88.75.

- 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

01/07/12 new stop loss @ 88.75
01/03/12 IYT gapped open higher at $91.20, above our trigger at $90.75

chart:

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


TJX Companies - TJX - close: 66.46 change: +0.15

Stop Loss: 63.25
Target(s): 68.00
Current Option Gain/Loss: Jan$65c: +90.0% & Feb$65c: +57.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/07 update: TJX continued to inch higher on Friday after Thursday's strong surge. The stock is setting at new all-time highs but I would not chase it here. More conservative traders may want to exit now to lock in gains.

Earlier Comments:
On January 5th, management announced a 2-for-1 stock split payable on February 2nd, 2012.

- Suggested Positions -

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

- or -

Long Feb $65 call (TJX1218B65) Entry $1.75

01/07/12 readers may want to take profits now (Jan$65call +90%, Feb$65call +57%)
01/05/12 new stop loss @ 63.25, TJX announced strong same-store sales and a 2:1 split.
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


Whole Foods Market, Inc. - WFM - close: 72.75 change: +1.26

Stop Loss: 69.25
Target(s): 74.00
Current Option Gain/Loss: +65.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: WFM managed to eke out a 13-cent gain on Friday, which extended its gains to three days in a row. Last week's breakout past resistance near $70.00 is bullish but I would not chase it here. Wait for another dip or a bounce near $70.00, which should be new support. Please note we are raising our stop loss up to $69.25.

- Suggested Positions -

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

01/07/12 new stop loss @ 69.25
01/05/12 new stop loss @ 68.75
01/03/12 WFM gapped open higher at $70.55, above our trigger (70.25)

chart:

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

Accenture Plc, - ACN - close: 51.83 change: -0.09

Stop Loss: 54.15
Target(s): 48.50
Current Option Gain/Loss: - 3.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: Friday's decline was not the follow through we were expecting on Thursday's breakdown but shares of ACN continue to look weak. I would still consider new put positions now or you could wait for a new lower high in the $53.00 area.

Our target is $48.50. We'll use a stop loss at $54.15, just above Wednesday's high. FYI: The Point & Figure chart for ACN is bearish with a $43 target.

(small positions) - Suggested Positions -

Long 2012Jan $52.50 PUT (ACN1221M52.5) Entry $1.35

chart:

Entry on January 06 at $51.91
Earnings Date 03/26/12 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on January 05, 2012


Cash America Intl. - CSH - close: 45.60 change: -0.40

Stop Loss: 46.75
Target(s): 40.50
Current Option Gain/Loss: Unopened
Time Frame: up to the earnings report.
New Positions: Yes, see below

Comments:
01/07 update: The bounce attempt on Friday ran out of steam and shares reversed. The stock looks poised to retest support near $45.00. I am expecting a breakdown soon.

We want to use a trigger to buy puts at $44.75 with a stop loss at $46.75. Our target is $40.50. FYI: The Point & Figure chart for CSH is bearish with a $33 target.

NOTE: We do not want to hold over CSH's earnings report on January 26th.

Trigger @ 44.75

- Suggested Positions -

buy the Jan $45 PUT (CSH1221M45)

- or -

buy the Feb $45PUT (CSH1218N45)

chart:

Entry on January xx at $ xx.xx
Earnings Date 01/26/12 (confirmed)
Average Daily Volume = 292 thousand
Listed on January 05, 2012


Coinstar, Inc. - CSTR - close: 40.98 change: -2.39

Stop Loss: 44.75
Target(s): 40.25
Current Option Gain/Loss: +100.0%
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Comments:
01/07 update: CSTR really underperformed the market on Friday with a -5.5% drop thanks to an analyst downgrade before the opening bell. Shares gapped lower at $42.30 and fell under the $41 level. Our exit target is $40.25. Yet readers may want to go ahead and exit now since our put option has already doubled (+100%). I am not suggesting new positions at this time. Please note our new stop loss at $44.75.

Earlier Comments:
I do want to point out that the larger trend for CSTR is suggesting a long-term target in the $25.00 area. If you've got the patience then consider aiming for the $27-25 zone over the next three or four months. The real signal will be a breakdown under significant support in the $38.50-37.50 zone.

NOTE: I have to warn you that being short CSTR is a popular trade. The most recent data listed short interest at almost 45% of the very small 28.2 million-share float. Any unexpected surge higher could produce a short squeeze. We will want to keep our position size small to limit our risk.

FYI: The Point & Figure chart for CSTR is bearish with a $34 target.

(SMALL Positions) - Suggested Positions -

Long Jan $45 PUT (CSTR1221M45) Entry $2.20

01/07/12 new stop loss @ 44.75
Readers may want to take profits now. The put option has already doubled (+100%).

chart:

Entry on January 05 at $44.38
Earnings Date 02/02/12 (unconfirmed)
Average Daily Volume = 846 thousand
Listed on January 04, 2012


Fossil, Inc. - FOSL - close: 78.46 change: -2.98

Stop Loss: 83.05
Target(s): 73.50
Current Option Gain/Loss: +10.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: There was no follow through in FOSL on its Thursday reversal higher. Shares opened weak on Friday and underperformed the market with a -3.6% drop. The volatility makes FOSL a tough trade but readers could use Friday's decline as a new entry point but if you do consider a tight stop above Thursday's high.

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

01/06/12 there was no follow through on Thursday's bounce.
01/05/12 Today's move might be a bullish reversal. Readers may want to consider an early exit immediately

chart:

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


LinkedIn Corp. - LNKD - close: 64.19 change: +0.06

Stop Loss: 62.55
Target(s): 51.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/07 update: LNKD is another volatile stock. Shares spent last week churning sideways in the $61-66 zone. Bigger picture the stock seems to have a bearish pattern of lower highs and lower lows. Furthermore LNKD has tens of millions of shares that will come to market when their lock up period expires in mid February.

The newsletter is suggesting readers wait for a breakdown with a trigger to buy puts at $59.75 instead. Our exit target is $51.50. FYI: The Point & Figure chart for LNKD is bearish with a $55 target.

Trigger @ 59.75 (small positions)

- Suggested Positions -

buy the Jan $57.50 PUT (LNKD1221M57.5)

chart:

Entry on January xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on January 04, 2012


Tractor Supply Company - TSCO - close: 69.71 change: +0.29

Stop Loss: 72.15
Target(s): 65.50
Current Option Gain/Loss: -29.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: TSCO tried to rally on Friday morning but reversed at short-term resistance at the 10-dma. Shares still managed a +0.4% gain. I see Friday's intraday reversal as a new bearish entry point. We are lowering our stop loss down to $72.15.

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

01/07/12 new stop loss @ 72.15

chart:

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


CLOSED BULLISH PLAYS

Dover Corp. - DOV - close: 57.66 change: -1.02

Stop Loss: 56.75
Target(s): 64.50
Current Option Gain/Loss: -80.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: DOV is just not performing as expected. Shares are chopping around sideways in the $57-60 zone and the up trend is in jeopardy. Shares seem to be struggling with technical resistance at the simple 200-dma. I am suggesting an early exit immediately to limit any losses.

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. FYI: The Point & Figure chart for DOV is bullish with a $75 target.

- Suggested Positions -

Jan $60 call (DOV1221A60) entry $1.25, exit 0.25 (-80%)

01/07/12 exit early
01/03/12 DOV gapped open higher at $59.57, above our trigger, opening this trade.

chart:

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


JPMorgan Chase & Co - JPM - close: 35.36 change: -0.32

Stop Loss: 32.35
Target(s): 37.50
Current Option Gain/Loss: Jan$33c: +172.3% & Feb$35c: +125.5%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/07 update: It was our plan to exit our JPM trade at the open on Friday morning to lock in gains. The stock opened at $35.69, which is up one cent from Thursday's closing bell. The 2012 January $33 call opened with a bid of $2.86 and the February $35 call opened with a bid of $2.03.

- Suggested Positions -

2012Jan $33 call (JPM1221A33) entry $1.05 exit $2.86 (+172.3%)

- or -

February $35 call (JPM1218B35) entry $0.90 exit $2.03 (+125.5%)

01/06/12 planned exit at the open
01/05/12 Plan to exit immediately tomorrow morning!
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.

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


Waters Corp. - WAT - close: 74.15 change: +0.44

Stop Loss: 72.75
Target(s): 79.50
Current Option Gain/Loss: -44.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07 update: Our WAT play is not progressing as expected. I am still concerned that the action this past week looks like a bearish reversal near resistance. We're suggesting an early exit immediately.

- Suggested Positions -

Jan $75 call (WAT1221A75) entry $2.25 exit $1.25 (-44.4%)

01/07/12 exit early
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.

chart:

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


CLOSED BEARISH PLAYS

Autodesk, Inc. - ADSK - close: 30.96 change: +0.14

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:
01/07 update: The larger trend for ADSK still looks vulnerable to more declines but short-term the stock has been showing a little relative strength. We are removing ADSK from the newsletter as a bearish candidate since the stock is not cooperating but I would keep it on your watch list. A breakdown under $29.75 could be used as a bearish entry point.

Trigger @ 29.65

Our trade never opened.

01/07/12 Removed ADSK from the newsletter. Trade never opened.

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