Editor's Note:

Cash America (CSH) hits our bearish target thanks to the earnings warning last night.

The stock market's widespread strength helped trigger our BRK.B and IOC trades. It also pushed bearish play ACN to our stop loss. New put play OPNT has been opened. We took profits on TJX January calls.

Current Portfolio:


CALL Play Updates

Boeing Co. - BA - close: 75.06 change: -0.18

Stop Loss: 73.65
Target(s): 76.00
Current Option Gain/Loss: -53.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: Uh-oh! BA failed to rally with the rest of the market today. That's a really bad sign when we only have two trading days left on our January calls. At this point readers have to decide how much capital can you salvage? You could exit now for a -53% drop. Fortunately with the S&P 500 over resistance at the 1300 level I would expect another up day tomorrow. I am adjusting our exit target down to $76.00.

- Suggested Positions -

Long 2012Jan $75 call (BA1221A75) entry $1.08

01/18/12 adjust exit target to $76.00, only 2 days left
01/17/12 only three trading days left
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.

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: 78.92 change: +0.95

Stop Loss: 76.75
Target(s): 83.50
Current Option Gain/Loss: + 4.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: Our BRK.B trade has been triggered. Shares hit our entry point at $78.75 this afternoon. I would still open new positions now at current levels. Our multi-week target is $83.50. We do not want to hold over the late February earnings report.

- Suggested Positions -

Long Feb $80 call (BRKB1218B80) entry $0.90

01/18/12 triggered at $78.75
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.

Entry on January 18 at $78.75
Earnings Date 02/27/12 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on January 12, 2012


Starwood Hotel & Resorts - HOT - close: 51.97 change: +1.34

Stop Loss: 49.75
Target(s): 55.75
Current Option Gain/Loss: +14.3%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/18 update: After underperforming yesterday HOT bounced back with a strong +2.6% gain. Traders bought the dip near its 200-dma. We can use this move as a new entry point. I am raising our stop loss to $49.75. 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

01/18/12 new stop loss @ $49.75
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.

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


Humana Inc. - HUM - close: 94.52 change: -0.98

Stop Loss: 92.95
Target(s): 99.75
Current Option Gain/Loss: -42.3%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/18 update: Hmm... healthcare stocks underperformed the market on Wednesday and HUM was no exception. Shares lost -1.0%. At this point I would look for a bounce near $93.00 or its simple 10-dma before considering new positions.

Our target is $99.75 since the $100 level might be round-number, psychological resistance. We do not want to hold over the early February earnings report. FYI: The Point & Figure chart for HUM is bullish with a $109 target.

- Suggested Positions -

Long Feb $100 call (HUM1218B100) entry $1.30

01/17/12 HUM gapped open higher at $95.75, above our trigger at $95.25

Entry on January 17 at $95.75
Earnings Date 02/06/12 (confirmed)
Average Daily Volume = 1.2 million
Listed on January 14, 2012


InterOil Corp. - IOC - close: 62.50 change: +2.39

Stop Loss: 58.40
Target(s): 66.00
Current Option Gain/Loss: - 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: Our new play on IOC has been triggered. Shares opened at $60.30 but quickly surged toward the $63.00 level, hitting our trigger to open positions at $61.00. I am raising our stop loss to $58.40.

Earlier Comments:
If IOC breaks out higher it could see a big move. That's because IOC could see a possible short squeeze. The most recent data listed short interest at more than 22% of the 33.4 million share float. Our target is $66.00. FYI: The Point & Figure chart for IOC is bullish with a long-term $91 target.

- Suggested Positions -

Long Feb $65 call (IOC1218B65) Entry $5.60*

01/18/12 new stop loss @ 58.40
* entry price is an estimate based on when IOC hit our trigger.

Entry on January 18 at $61.00
Earnings Date 03/22/12 (unconfirmed)
Average Daily Volume = 537 thousand
Listed on January 17, 2012


iShares Transportation - IYT - close: 92.99 change: +0.93

Stop Loss: 89.45
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Jan$95c: - 100% & Feb$95c: -13.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/18 update: Traders bought the dip near IYT's rising 10-dma and the ETF continues to move higher. Unfortunately it's not moving fast enough for our options. The ETF is up $1.80 from our entry point but our options are still underwater. I'm still tempted to buy February calls on today's move or you could wait for a new relative high over $93.20.

We only have two days left on January options and the IYT would have to be above $95.00 for our options to have any value, which is unlikely to happen.

- Suggested Positions -

Long Jan $95 call (IYT1221A95) entry $0.20

- 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

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


Laboratory Corp. - LH - close: 88.47 change: -0.07

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:
01/18 update: Resistance near $89.00 and the simple 200-dma is proving to be a tough cookie to crack. LH displayed some volatility this morning but the intraday high was only $88.86. If we don't see LH breakout higher by the weekend I'll likely drop it as a candidate for lack of movement.

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)

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


Mohawk Industries - MHK - close: 65.31 change: +1.02

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: - 1.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: MHK delivered another strong session with a +1.5% gain in spite of a downgrade by J.P.Morgan this morning. MHK has stalled twice now near the $66.00 level so this is new short-term resistance. More conservative traders may want to start raising their stop loss.

Our target is $67.50 but we do not want to hold over the February earnings report. More aggressive traders could aim higher.

Investors will be interested to note that the most recent data listed short interest at 5% of the 57 million share float. That's not excessive but it's a bit high and could boost any new gains as bears cover their shorts. FYI: The Point & Figure chart for MHK is bullish with a $90 target.

- Suggested Positions -

Long Feb $65 call (MHK1218B65) Entry $2.48

01/17/12 MHK gapped open higher at $63.99

Entry on January 17 at $63.99
Earnings Date 02/21/12 (unconfirmed)
Average Daily Volume = 621 thousand
Listed on January 14, 2012


Omnicom Group - OMC - close: 47.09 change: +0.50

Stop Loss: 44.75
Target(s): 49.00
Current Option Gain/Loss: +44.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: OMC quickly rallied off its morning lows but volume is definitely fading. The stock might look a little bit short-term overbought here. I am not suggesting new positions at this time. Look for support in the $46.00-45.00 zone. Please note our new stop loss at $44.75.

More conservative traders could take profits early right now.

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

01/18/12 new stop loss @ 44.75

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


Teva Pharmaceuticals - TEVA - close: 45.40 change: +0.53

Stop Loss: 43.75
Target(s): 49.50
Current Option Gain/Loss: + 1.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: Today's rebound in TEVA has renewed my faith in the trend. We can use today's gain and close over $45.00 as a new entry point for bullish positions.

Our target is $49.50 but we'll plan to exit prior to the earnings report in early February. FYI: The Point & Figure chart for TEVA is bullish with a $57 target.

(Small Positions)- Suggested Positions -

Long Feb $45 call (TEVA1218B45) entry $1.50

01/18/12 TEVA has rebounded. Use it as a new entry point.
01/17/12 Be careful. TEVA hit our trigger and reversed to close back under $45.00

Entry on January 17 at $45.25
Earnings Date 02/08/12 (unconfirmed)
Average Daily Volume = 5.9 million
Listed on January 14, 2012


TJX Companies - TJX - close: 66.85 change: +0.87

Stop Loss: 64.75
Target(s): 68.50
Current Option Gain/Loss:(Jan$65c: +85.0%) & Feb$65c: +54.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/18 update: The trading gods have smiled on our January TJX calls. The stock rallied +1.3% to close near its highs for the session. Our plan was to exit our January $65 calls at the closing bell tonight. These closed with a bid of $1.85 (+85%).

TJX is now trading just under the $67.00 level, which is where it reversed two weeks ago. A breakout could send it toward the $69-70 zone. I am adjusting our exit target for our February calls from $68.00 to $68.50.

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

- Suggested Positions -

2012Jan $65 call (TJX1221A65) Entry $1.00, exit $1.85 (+85.0%)

- or -

Long Feb $65 call (TJX1218B65) Entry $1.75

01/18/12 adjusted exit target to $68.50
01/18/12 closed Jan $65 calls @ $1.85 (+85.0%)
01/17/12 prepare to exit January calls at close tomorrow
01/17/12 new stop loss @ 64.75
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

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


PUT Play Updates

OPNET Technologies - OPNT - close: 32.90 change: -0.36

Stop Loss: 33.85
Target(s): 30.00
Current Option Gain/Loss: -22.7% (wide spreads)
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: OPNT continues to underperform the market. Shares slipped to new relative lows before paring its losses by the closing bell. Our trigger to buy puts was hit at $32.70. Given the stock's weakness I am tempted to open positions again tomorrow but with the market's major indices in breakout mode I would be cautious launching new bearish positions.

Earlier Comments:
Our target is $30.00. More aggressive traders may want to aim lower but I am concerned the 2011 summer lows could be support.

We want to keep our position size small because OPNT has above average short interest at 11.7% of the 14.8 million share float. That raises the risk of a short squeeze should the stock reverse higher. FYI: The Point & Figure chart for OPNT is bearish with a $20 target.

The spreads are a little wide as well, which is another reason to keep our position size small.

(small positions) - Suggested Positions -

Long Feb $30 PUT (OPNT1218B30) Entry $1.10

Entry on January 18 at $32.70
Earnings Date 02/07/12 (confirmed)
Average Daily Volume = 252 thousand
Listed on January 17, 2012


CLOSED BEARISH PLAYS

Accenture Plc, - ACN - close: 54.95 change: +1.46

Stop Loss: 54.15
Target(s): 48.50
Current Option Gain/Loss: -96.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/18 update: With the market in breakout mode I am not surprised to see ACN finally break through resistance at the $54.00 level. Our stop loss was hit at $54.15 this morning.

(small positions) - Suggested Positions -

Long 2012Jan $52.50 PUT (ACN1221M52.5) Entry $1.35, exit $0.05 (-96.2%)

01/18/12 stopped out at $54.15
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: 41.50 change: -2.60

Stop Loss: 46.10
Target(s): 40.50
Current Option Gain/Loss: Jan $45 put: +223.8% & Feb$45put: +64.5%
Time Frame: up to the earnings report.
New Positions: see below

Comments:
01/18 update: Target achieved.

As expected CSH saw a sharp drop on Wednesday in reaction to its lowered earnings guidance released last night. The stock gapped open lower at $41.49 and plunged to $40.00 a couple of times before finally paring its losses. Our exit target was hit at $40.50.

- Suggested Positions -

Jan $45 PUT (CSH1221M45) Entry $1.05, exit $3.40 (+223.8%)

- or -

Feb $45PUT (CSH1218N45) Entry $2.40 exit $3.95 (+ 64.5%)

01/18/12 Target hit at $40.50
01/17/12 prepare to exit Jan. $45 puts at the close tomorrow.
01/17/12 new stop loss @ 46.10
01/17/12 CSH issued lowered guidance after the closing bell.

chart:

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