Editor's Note:

With the U.S. market's closed on Monday we are down to the last four trading days before January options expire.

Meanwhile stocks were down almost across the board on Friday thanks to new worries over downgrades in Europe. We did see OMC and WFM buck the trend.

-James

Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 74.60 change: -0.91

Stop Loss: 73.65
Target(s): 77.00
Current Option Gain/Loss: -42.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/14 update: BA followed the market lower on Friday morning. Shares managed to bounce at $74.16 but Friday's -1.2% loss erased Thursday's gain. I am not suggesting new positions at this time. We only have four trading days left before January options expire. Readers may want to consider an early exit soon or consider inching up your stop loss.

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

01/12/12 new stop loss @ 73.65
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


Berkshire Hathaway Inc. - BRK.B - close: 77.77 change: -0.73

Stop Loss: 76.75
Target(s): 83.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/14 update: Our new trade on BRK.B is not open yet. The stock gapped open lower, negating our entry on Friday. Shares dipped toward $77.00 before finding short-term support and bouncing. Thursday's high was $78.50. We will adjust our strategy to buy calls if BRK.B can trade at $78.75 or higher. I am moving our stop loss up to $76.75.

More conservative traders could wait for the stock to rally past $79.00 first before buying calls. Our multi-week target is $83.50. We do not want to hold over the late February earnings report.

Trigger @ 78.75

- Suggested Positions -

buy the Feb $80 call (BRKB1218B80)

01/14/12 adjusted entry point strategy to use a trigger @ 78.75
01/13/12 BRK.B gapped lower, negating our entry point. Trade did not open.

chart:

Entry on January xx at $ xx.xx
Earnings Date 02/27/12 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on January 12, 2012


Starwood Hotel & Resorts - HOT - close: 51.31 change: -1.30

Stop Loss: 48.75
Target(s): 55.75
Current Option Gain/Loss: + 2.3%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/14 update: After a multi-day rally HOT was due for a little pull back. The market weakness on Friday was just what it needed. Shares spiked down toward support near simple 10-dma and 200-dma. The low on Friday was $50.79. Our buy-the-dip trigger was hit at $51.00. I would still consider new positions now. More conservative traders may want to use a stop loss closer to the $50.00 level instead. FYI: The Point & Figure chart for HOT is bullish with a $64 target.

Don't forget that we plan to exit prior to the Feb. 2nd earnings.

- Suggested Positions -

Long Feb $52.50 call (HOT1218B52.5) entry: 1.67

01/13/12 Triggered on a dip at $51.00
01/10/12 initial entry point did not work. New strategy: buy a dip at $51.00.

chart:

Entry on January 13 at $51.00
Earnings Date 02/02/12 (confirmed)
Average Daily Volume = 2.4 million
Listed on January 09, 2012


iShares Transportation - IYT - close: 92.24 change: -0.66

Stop Loss: 89.45
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Jan$95c: - 100% & Feb$95c: -20.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/14 update: IYT's -0.7% decline on Friday erased about two days of gains. Yet I am encouraged by the action on Friday. Trades bought the dip once the IYT had filled the gap from January 10th and near its rising 10-dma. If the S&P 500 opens positive on Tuesday I would be tempted to buy February calls. We only have four days left on January options.

- 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

01/12/12 new stop loss @ 89.45
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


Laboratory Corp. - LH - close: 86.94 change: -0.63

Stop Loss: 85.95
Target(s): 94.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/14 update: LH is still consolidating sideways between support in the $85.50-88.00 zone. Shares continue to have technical resistance at the 200-dma overhead near $88.50. We are waiting on a bullish breakout higher.

I am suggesting a trigger to buy calls at $89.00. We'll aim for the $94.75 mark. More aggressive traders could aim for the $97-100 zone instead. FYI: The Point & Figure chart for LH is bullish with a $105 target.

NOTE: We do not want to hold over the earnings report around Feb. 9th (still an unconfirmed date).

Trigger @ 89.00

- Suggested Positions -

buy the Feb $90 call (LH1218B90)

chart:

Entry on January xx at $ xx.xx
Earnings Date 02/09/12 (unconfirmed)
Average Daily Volume = 564 thousand
Listed on January 10, 2012


Omnicom Group - OMC - close: 46.46 change: +0.59

Stop Loss: 44.25
Target(s): 49.00
Current Option Gain/Loss: +22.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/14 update: OMC continued to show relative strength on Friday. Shares rallied +1.2% and did so on above average volume, which is a good sign. Bears could have argued that $46.00 was potential resistance so Friday's advance is encouraging. I am not suggesting new positions at this time.

Our target is $49.00. We do not want to hold over the mid February earnings report. FYI: The Point & Figure chart for OMC is bullish with a $64 target.

- Suggested Positions -

Long Feb $45 call (OMC1218B45) entry $1.80

chart:

Entry on January 12 at $45.75
Earnings Date 02/14/12 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on January 11, 2012


TJX Companies - TJX - close: 65.15 change: -0.16

Stop Loss: 63.75
Target(s): 68.00
Current Option Gain/Loss: Jan$65c: -30.0% & Feb$65c: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/14 update: The fact that TJX limited its losses to just 16 cents on a widespread down day for stocks is encouraging. Shares could have broken short-term support at $65.00 on the market's Friday morning plunge yet TJX held this level. Unfortunately I am concerned that if stocks continue to drop on Tuesday we will see TJX breakdown and possibly drop toward the $63.50 area (January lows) or its rising 40 and 50-dma.

I am not suggesting new positions at this time. We only have four trading days left before January options expire.

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

01/12/12 new stop loss @ 63.75
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: 73.69 change: +1.76

Stop Loss: 71.45
Target(s): 74.25
Current Option Gain/Loss: +94.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/14 update: WFM outperformed the market on Friday with a +2.4% gain. Traders bought the dip near $71.50 on Friday morning and the stock rallied toward its highs for the week. The actual high on Friday was $73.75. We keep waiting to exit at $74.00. The stock's 2011 high was $74.45 on October 27th. I am adjusting our exit price to $74.25. However, I strongly suggest that more conservative traders exit positions at the open on Tuesday morning since we only have four trading days left before January options expire and the bid is at $3.70 (+94.7%). I am raising our stop loss up to $71.45.

- Suggested Positions -

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

01/14/12 new stop loss @ 71.45, adjusted exit target to $74.25. Cautious traders may want to exit immediately with only four days left on January options. Current bid is at $3.70 (+94.7%)
01/12/12 new stop loss @ 69.75
01/10/12 WFM begins trading ex-dividend tomorrow morning
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: 53.25 change: -0.69

Stop Loss: 54.15
Target(s): 48.50
Current Option Gain/Loss: -77.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/14 update: Resistance at the $54.00 level held thanks in large part to the market's widespread drop on Friday morning. ACN did pare its losses by the close. I remain very cautious here. Readers may want to exit early. I am not suggesting new positions at this time.

NOTE: We only have four trading days left before January options expire.

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

01/14/12 resistance at $54.00 is holding so far but readers may want to consider an early exit anyway.

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: 44.57 change: -0.44

Stop Loss: 46.75
Target(s): 40.50
Current Option Gain/Loss: Jan $45 put: - 9.5% & Feb$45put: - 6.2%
Time Frame: up to the earnings report.
New Positions: see below

Comments:
01/14 update: CSH dropped to new multi-month lows on Friday. This is a clear breakdown under support. The stock looks very bearish and I would consider new bearish positions with February puts. Our problem is the time frame. CSH isn't moving fast enough. January options expire in four trading days. Even with the February puts we still want to exit prior to the January 26th earnings report. Keep that in mind when considering new positions.

Our target is $40.50. FYI: The Point & Figure chart for CSH is bearish with a $33 target.

- Suggested Positions -

Long Jan $45 PUT (CSH1221M45) Entry $1.05

- or -

Long Feb $45PUT (CSH1218N45) Entry $2.40

chart:

Entry on January 11 at $44.75
Earnings Date 01/26/12 (confirmed)
Average Daily Volume = 292 thousand
Listed on January 05, 2012