Editor's Note:

The S&P 500 index has extended its 2012 gains to three weeks in a row.

On Friday we exited our BA trade. HUM was stopped out on a downgrade. PVH has not been opened yet.

UPDATE: The Greece/PSI negotiations over the weekend appear to have broken down. This is definitely a negative since so many were expecting a resolution with private sector investors (PSI) over the details of the Greek debt haircut by Monday. Monday morning could see a spike downward. We'll have to wait and see if there are any new headlines produced on Sunday.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 79.91 change: +0.32

Stop Loss: 76.75
Target(s): 83.50
Current Option Gain/Loss: +26.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/21 update: BRK.B continues to rally and shares are nearing possible round-number resistance at $80.00. I would not be surprised to see a little profit taking soon. Readers can launch new positions on a pull back. Look for short-term support in the $78.50-78.00 area. 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.

chart:

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: 53.55 change: +0.25

Stop Loss: 49.75
Target(s): 55.75
Current Option Gain/Loss: +55.6%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/21 update: HOT rebounded off its morning dip and climbed to new two-month highs. Shares are nearing potential resistance at its October peak near $54.00. If you're looking for a new entry point I'd wait for a dip or a bounce near $52.00 or its 10-dma. More conservative traders may want to start raising their stop loss.

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.

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


InterOil Corp. - IOC - close: 63.30 change: +1.09

Stop Loss: 58.40
Target(s): 66.00
Current Option Gain/Loss: - 3.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/21 update: IOC rallied off its Friday morning lows and closed up +1.7% on the session. I don't see any changes from my prior comments. If you're looking for a new entry point consider waiting for a dip or a bounce near support in the $60 area.

Earlier Comments:
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.

chart:

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


iShares Russell 2000 ETF - IWM - close: 78.25 change: +0.05

Stop Loss: 75.45
Target(s): 82.50
Current Option Gain/Loss: -11.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/21 update: It was option expiration Friday so I was not surprised to see the IWM trade sideways most of the session. The small cap ETF did see a small surge higher toward the closing bell, which might bode well for Monday. I would still consider new positions now or you could wait for a dip closer to the $77.00 level or its 10-dma.

Earlier Comments:
You may want to consider a stop closer to the 10-dma instead (currently 75.95). Our multi-week target is $82.50. Keep in mind the $80.00 level might offer some overhead resistance. FYI: The Point & Figure chart for IWM is bullish with a $90 target.

- Suggested Positions -

Long Feb $80 call (IWM1218B80) Entry $1.14

01/19/12 IWM gapped open higher at $78.13

chart:

Entry on January 19 at $78.13
Earnings Date --/--/--
Average Daily Volume = 40 million
Listed on January 18, 2012


iShares Transportation - IYT - close: 94.08 change: -0.44

Stop Loss: 91.40
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Jan$95c: - 100% & Feb$95c: + 6.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/21 update: The transportation ETF saw a little pull back on Friday following Thursday's pop higher. Shares spent most of the day drifting sideways along the $94 level. If the market sees a pull back I would look for the IYT to find support near $93 and then near $92. We are raising the stop loss up to $91.40.

The Jan. $95 calls opened at $0.25, which means the bid would have been either $0.05 or $0.00. We're listing it as a -100% loss.

- Suggested Positions -

Jan $95 call (IYT1221A95) entry $0.20, exit $0.00 (-100%)

- or -

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

01/21/22 new stop loss @ 91.40
01/21/12 January $95 calls have expired.
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: 88.83 change: +0.36

Stop Loss: 86.90
Target(s): 94.75
Current Option Gain/Loss: Unopened
Time Frame: up to the Feb. 10th earnings report.
New Positions: Yes, see below

Comments:
01/21 update: The Friday morning spike higher in LH failed at $88.98. Thus we're still waiting for a breakout. Traders did buy the dip again for the third day in a row at its 10-dma. I don't see any changes from my prior comments. The plan is to buy calls when LH hits $89.00 or higher. I am raising our stop loss up to $86.90. We do not want to hold positions over the Feb. 10th earnings report.

Our target is the $94.75 mark. FYI: The Point & Figure chart for LH is bullish with a $105 target.

Trigger @ 89.00

- Suggested Positions -

buy the Feb $90 call (LH1218B90)

01/21/12 new stop loss at $86.90. Still waiting for LH to hit our entry point at $89.00.

chart:

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


Mohawk Industries - MHK - close: 63.30 change: -1.88

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: -39.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/21 update: Friday was a disappointing session for MHK. Real estate related stocks were showing relative weakness. I am concerned that last week's performance on MHK's weekly chart looks like a potential top. I'm not suggesting new positions at this time. More conservative traders might want to raise their stops closer to the $61.00 level.

Earlier Comments:
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

chart:

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


Northrop Gruman - NOC - close: 61.39 change: +0.08

Stop Loss: 58.75
Target(s): 64.00
Current Option Gain/Loss: +26.4%
Time Frame: up to NOC's early February earnings report.
New Positions: see below

Comments:
01/21 update: After a strong Wednesday-Thursday rally shares of NOC took a day off to rest on Friday. If the market dips I would look for NOC to retest the $60 area. Please note our new stop loss at $58.75.

We plan to exit prior to NOC's earnings report in early February. FYI: The Point & Figure chart for NOC is bullish with a $71 target.

- Suggested Positions -

Long Feb $60 call (NOC1218B60) Entry $1.70

01/21/12 new stop loss @ 58.75

chart:

Entry on January 19 at $60.34
Earnings Date 02/01/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on January 18, 2012


Omnicom Group - OMC - close: 46.71 change: -0.98

Stop Loss: 45.45
Target(s): 49.00
Current Option Gain/Loss: +22.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/21 update: OMC's rally seemed to run out of gas on Friday. The stock reversed course with a -2.0% decline. OMC could easily drop toward its 10-dma near $46 without seriously damaging its multi-week up trend but I will point out that last week's performance looks like a potential top on the weekly chart.

I am not suggesting new bullish 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

01/19/12 new stop loss @ 45.45, readers may want to take profits now (+66%)
01/18/12 new stop loss @ 44.75

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


PVH Corp. - PVH - close: 76.64 change: -0.31

Stop Loss: 73.90
Target(s): 83.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
01/21 update: Our new PVH trade is not open yet. Shares of PVH opened higher on Friday but the S&P 500 did not (although it was only down a very small margin at the open). That's okay since neither the index or PVH moved very much. I am suggesting we try again. I am suggesting small bullish positions at the open on Monday but only if both PVH and the S&P 500 index open positive. Nimble traders might consider buying a dip near $75.00 if the market sees a pull back. FYI: The Point & Figure chart for PVH is bullish with a $92 target.

*See Entry Details Above*

- Suggested Positions -

buy the Feb $77.50 call (PVH1218B77.5)

- or -

buy the Mar $80 call (PVH1217C80)

01/21/12 trade not open yet. try again.

chart:

Entry on January xx at $ xx.xx
Earnings Date 03/28/12 (unconfirmed)
Average Daily Volume = 867 million
Listed on January 19, 2012


Teva Pharmaceuticals - TEVA - close: 45.83 change: +0.04

Stop Loss: 43.75
Target(s): 49.50
Current Option Gain/Loss: +12.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/21 update: TEVA managed to trade over $46 on Friday before paring its gains. I would expect a dip toward $45.00 or its simple 10-dma soon.

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

chart:

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: 66.58 change: -0.34

Stop Loss: 64.75
Target(s): 68.50
Current Option Gain/Loss:(Jan$65c: +85.0%) & Feb$65c: +34.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/21 update: TJX spiked to a new record high and almost hit $67.50 before reversing lower and closing in the red. If recent history is any guide then we might look for a dip back toward the $65.50 area soon. I am not suggesting new positions at this time.

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

- Suggested Positions -

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

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


PUT Play Updates

Currently we do not have any active put trades.


CLOSED BULLISH PLAYS

Boeing Co. - BA - close: 75.52 change: -0.04

Stop Loss: 73.65
Target(s): 76.00
Current Option Gain/Loss: -44.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/21 update: We have run out of time on our January calls for BA. We adjusted our plan to exit at the opening bell on Friday. BA opened at $75.68. The bid on our January $75 calls opened at $0.60 (-44.4).

- Suggested Positions -

Long 2012Jan $75 call (BA1221A75) entry $1.08 exit $0.60 (-44.4%)

01/20/12 exited at the open.
01/19/12 prepare to exit at the open tomorrow
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.

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


Humana Inc. - HUM - close: 92.15 change: -2.79

Stop Loss: 92.95
Target(s): 99.75
Current Option Gain/Loss: -61.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/21 update: HUM was a significant underperformer on Friday thanks to a downgrade by Wells Fargo. The stock spiked lower and fell to $90.95 intraday. Our stop loss was hit at $92.95.

The overall trend is still up. Traders may want to consider buying dips or a bounce near $90 or its rising 50-dma. 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 -

Feb $100 call (HUM1218B100) entry $1.30, exit $0.50 (-61.5%)

01/20/12 stopped out at $92.95, drop on analyst downgrade
01/17/12 HUM gapped open higher at $95.75, above our trigger at $95.25

chart:

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