Editor's Note:

Oil stocks were showing relative strength today and IOC hit our bullish target. Meanwhile LH and DECK hit our entry triggers. I've adjusted the entry strategy on PVH.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 79.15 change: -0.76

Stop Loss: 76.75
Target(s): 83.50
Current Option Gain/Loss: - 5.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/23 update: After three up days in a row BRK.B hit a little profit taking under resistance near $80. I am suggesting readers look for a dip in the $78.50-78.00 zone before considering new positions. 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


Cognizant Technology - CTSH - close: 70.61 change: +0.44

Stop Loss: 68.75
Target(s): 76.50
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the Feb. 8th earnings
New Positions: Yes, see below

Comments:
01/23 update: CTSH displayed some relative strength today with a +0.6% gain but failed to breakout past the $71.00 level. We want to use a trigger to buy calls at $71.05. If triggered our target is $76.50. We do not want to hold over the Feb. 8th earnings report. FYI: The Point & Figure chart for CTSH is bullish with an $85 target.

Trigger @ $71.05

- Suggested Positions -

buy the Feb $75 call (CTSH1218B75)

Entry on January xx at $ xx.xx
Earnings Date 02/08/12 (confirmed)
Average Daily Volume = 2.3 million
Listed on January 21, 2012


Flowserve Corp. - FLS - close: 107.21 change: +0.03

Stop Loss: 104.75
Target(s): 114.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/23 update: Our trade on FLS is not open yet. The stock opened lower this morning. It quickly reversed higher but failed to hit a new relative high before sinking back to almost unchanged. I don't see any changes from my prior comments. Although more conservative traders may want to wait for a rally past $108.50 before initiating new positions.

We are setting our stop loss at $104.75, just under Wednesday's low. I am setting our target at $114.50 but cautious traders may want to exit at $112.00 instead. FYI: The Point & Figure chart for FLS is bullish with a $139 target.

Do not enter position unless FLS and the S&P500 are both positive at the open

- Suggested Positions -

buy the FEB $110 call (FLS1218B110)

- or -

buy the APR $115 call (FLS1221D115)

Entry on January xx at $ xx.xx
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 400 thousand
Listed on January 21, 2012


Starwood Hotel & Resorts - HOT - close: 54.01 change: +0.46

Stop Loss: 49.75
Target(s): 55.75
Current Option Gain/Loss: +69.4%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/23 update: HOT managed to outperform the major indices with a +0.8% gain today. 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.

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 Russell 2000 ETF - IWM - close: 78.15 change: -0.10

Stop Loss: 75.45
Target(s): 82.50
Current Option Gain/Loss: -25.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/23 update: After a little volatility this morning the IWM drifted back toward the $78.00 level. The low today was $77.55. I am suggesting readers wait for a dip near $77.00 before considering new positions.

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

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


iShares Transportation - IYT - close: 93.40 change: -0.68

Stop Loss: 91.40
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:
01/23 update: Simple profit taking pushed the IYT back down toward its rising 10-dma. If the market dips again tomorrow I would look for the IYT to test the $92 area.

- Suggested Positions -

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

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


Laboratory Corp. - LH - close: 88.91 change: +0.27

Stop Loss: 86.90
Target(s): 94.75
Current Option Gain/Loss: + 0.0%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
01/23 update: Traders bought the dip in LH this morning and shares managed to trade over resistance at $89.00 late this afternoon. Our trade has been opened. If you're still looking for an entry point consider waiting for a rally past $89.15 next.

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.

- Suggested Positions -

Long Feb $90 call (LH1218B90) Entry $1.50

01/23/12 trade triggered at $89.00
01/21/12 new stop loss at $86.90. Still waiting for LH to hit our entry point at $89.00.

Entry on January 23 at $89.00
Earnings Date 02/10/12 (confirmed)
Average Daily Volume = 564 thousand
Listed on January 10, 2012


Mohawk Industries - MHK - close: 63.00 change: -0.30

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: -53.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/23 update: MHK is still correcting lower. Shares look headed for what should be support in the $62.00-61.00 zone. I am not suggesting new positions at this time.

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

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: 60.49 change: -0.90

Stop Loss: 58.75
Target(s): 64.00
Current Option Gain/Loss: -17.6%
Time Frame: up to NOC's early February earnings report.
New Positions: see below

Comments:
01/23 update: Defense and aerospace names hit some profit taking on Monday. NOC gave up -1.4%. Shares look headed for round-number support at $60.00 or short-term technical support at the 10-dma (near $59.65). Wait for this dip or a bounce before considering new positions.

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

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: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/23 update: OMC continues to correct lower. The saw a little volatility this morning with a drop from the $46.80 area down to the $45.75 level before paring its losses. Currently we have a stop loss at $45.45. More aggressive traders might want to put their stop under the $45.00 mark instead. 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

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


PVH Corp. - PVH - close: 76.28 change: -0.36

Stop Loss: 74.75
Target(s): 83.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
01/23 update: Our PVH trade is still not open yet. The stock opened lower, spiked toward its recent highs and then reversed again. I am adjusting our entry point strategy. We will use a trigger at $77.60 to open small bullish positions and we'll raise the stop loss to $74.75. FYI: The Point & Figure chart for PVH is bullish with a $92 target.

Buy calls at $77.60, keep positions small.

- Suggested Positions -

buy the Feb $77.50 call (PVH1218B77.5)

- or -

buy the Mar $80 call (PVH1217C80)

01/23/12 trade still not open
new entry point strategy to use a trigger at $77.60, stop loss at $74.75
01/21/12 trade not open yet. try again.

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: -0.00

Stop Loss: 43.75
Target(s): 49.50
Current Option Gain/Loss: + 8.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/23 update: TEVA spent the day churning sideways and closed unchanged on the session.

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: 66.59 change: +0.01

Stop Loss: 64.75
Target(s): 68.50
Current Option Gain/Loss:(Jan$65c: +85.0%) & Feb$65c: +31.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/23 update: It was a relatively quiet day for TJX with the stock closing virtually unchanged on the session. There is still a good chance that TJX will dip into the $65.50-65.00 area. 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

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

Deckers Outdoor Corp. - DECK - close: 81.38 change: -2.49

Stop Loss: 85.25
Target(s): 77.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/23 update: Our aggressive put play on DECK has been triggered. The stock underperformed the market with a -2.9% decline. Our trigger to buy puts was hit at $82.75. Our plan was to keep our position size small to limit risk. DECK can be a volatile stock.

Earlier Comments:
Our target is $77.00. We want to keep our position size small because any unexpected rally might spark some short covering. The most recent data listed short interest at 14% of the relatively small 37.1 million-share float.

(Small Positions) - Suggested Positions -

Long FEB $80 PUT (DECK1218N80) Entry $3.10

Entry on January 23 at $82.75
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on January 21, 2012


CLOSED BULLISH PLAYS

InterOil Corp. - IOC - close: 66.55 change: +3.25

Stop Loss: 58.40
Target(s): 66.00
Current Option Gain/Loss: + 7.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/23 update: Target hit.

Oil stocks were showing relative strength today. IOC surged to an intraday high of $66.90 this morning. Our target was hit at $66.00. Readers may want to keep an eye on it for another entry point if shares see a correction. Although honestly, we may not trade IOC again. We caught a $5.00 move in the stock and the option rallied less than a $1.00. Back out the option spread and our gains were not worth the risk.

- Suggested Positions -

Feb $65 call (IOC1218B65) Entry $5.60*, exit $ 6.00 (+7.1%)

01/23/12 target hit at $66.00
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