Editor's Note:

The market has seen its upward momentum stall but we still had two trades get triggered today (CTSH and PVH). DLTR and FLS are still not open yet.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 78.48 change: -0.67

Stop Loss: 76.75
Target(s): 83.50
Current Option Gain/Loss: -43.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/24 update: BRK.B. dipped lower again and closed under its 10-dma. A minor pull back isn't that surprising. Shares should find some support in the $78-77 area. Readers can use a bounce near current levels as a new entry point. 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: 71.18 change: +0.57

Stop Loss: 68.75
Target(s): 76.50
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to the Feb. 8th earnings
New Positions: see below

Comments:
01/24 update: CTSH displayed relative strength and closed at new relative highs. Traders bought the dip near $70.00 this morning and the stock rallied past the $71 level, hitting our trigger to buy calls at $71.05. If the S&P 500 opens positive tomorrow I would still consider new positions in CTSH. 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.

- Suggested Positions -

Long Feb $75 call (CTSH1218B75) Entry $0.85

01/24/12 trade opened at $71.05

Entry on January 24 at $71.05
Earnings Date 02/08/12 (confirmed)
Average Daily Volume = 2.3 million
Listed on January 21, 2012


Dollar Tree Inc. - DLTR - close: 85.98 change: +0.19

Stop Loss: 83.75
Target(s): 89.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/24 update: Our new trade on DLTR is not open yet. Both the stock and the S&P 500 opened lower this morning. DLTR did rebound near $85 intraday. I am suggesting we try again tomorrow morning.

I am suggesting new positions at the open tomorrow but only if both DLTR and the S&P 500 index open positive. More conservative traders may want to wait for DLTR to trade at a new high ($86.65) before initiating positions. Our target is $89.75. More aggressive traders may want to aim higher. FYI: The Point & Figure chart for DLTR is bullish with a $113 target.

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

- Suggested Positions -

buy the Feb $87.50 call (DLTR1218B87.5)

01/24/12 trade did not open. try again.

Entry on January xx at $ xx.xx
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on January 23, 2012


Flowserve Corp. - FLS - close: 107.71 change: +0.50

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:
01/24 update: Our FLS trade is still not open. Shares opened lower and dipped to $106.18 before bouncing back into positive territory. Shares did close near their high for the session, which should bode well for tomorrow morning. I am suggesting we try again.

The plan is to buy calls if both FLS and the S&P 500 open positive tomorrow morning. 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: 54.52 change: +0.51

Stop Loss: 51.45
Target(s): 55.75
Current Option Gain/Loss: +82.6%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/24 update: HOT quickly rebounded off its morning gap lower. Shares rallied past short-term resistance at $54.00 to outperform the market with a +0.9% gain.

We are raising our stop loss to $51.45.

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

01/24/12 new stop loss @ 51.45
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: 78.60 change: +0.45

Stop Loss: 75.45
Target(s): 82.50
Current Option Gain/Loss: - 7.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/24 update: The IWM dipped to its short-term technical support at the rising 10-dma early this morning and bounced. The small caps managed to outperform the large caps with a +0.5% gain in the IWM.

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: 92.88 change: -0.52

Stop Loss: 91.40
Target(s): 94.75 or 98.50
Current Option Gain/Loss: Jan$95c: - 100% & Feb$95c: -41.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/24 update: The IYT transportation ETF underperformed today thanks to a sell-off in the railroad industry. Railroad stocks, as a group, were down -2.7%. The intraday low in the IYT was $91.66. If the correction continues tomorrow we could see IYT hit our stop loss.

- 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: 91.18 change: +2.27

Stop Loss: 86.90
Target(s): 94.75
Current Option Gain/Loss: +83.3%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
01/24 update: Shares of LH were in rally mode and outperformed the market with a +2.5% gain. The move was fueled by a bullish earnings report from rival DGX this morning. LH's breakout past resistance in the $89-90 zone is also positive. I am not suggesting new positions tonight.

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

01/24/12 rival DGX delivers a strong earnings report
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: 63.11 change: +0.11

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: -51.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/24 update: MHK's gain today was not very convincing. I remain cautious here. More conservative traders may want to raise their stop loss closer to the $62.00 level. 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: 60.00 change: -0.49

Stop Loss: 58.75
Target(s): 64.00
Current Option Gain/Loss: -32.3%
Time Frame: up to NOC's early February earnings report.
New Positions: see below

Comments:
01/24 update: The mini correction in NOC continues. The stock gapped open lower and then spent almost the entire day in a 40-cent range on either side of the $60.00 level. $60 should be short-term support so I would consider buying calls on a bounce here. Just remember that we plan to exit prior to the Feb.1st earnings report. 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 (confirmed)
Average Daily Volume = 1.5 million
Listed on January 18, 2012


Omnicom Group - OMC - close: 46.18 change: +0.01

Stop Loss: 45.45
Target(s): 49.00
Current Option Gain/Loss: - 2.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/24 update: The stock market's widespread weakness this morning pushed OMC to an intraday low of $45.60. Shares quickly rebounded but spent much of the day drifting sideways just above the $46.00 level. 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: 77.94 change: +1.66

Stop Loss: 74.75
Target(s): 83.50
Current Option Gain/Loss: Feb77.50c: - 2.0% & Mar$80c: - 5.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/24 update: PVH displayed relative strength today with a +2.1% gain. This breakout to new highs hit our trigger to buy calls at $77.60. The plan was to keep our position size small to limit risk. FYI: The Point & Figure chart for PVH is bullish with a $92 target.

keep positions small.

- Suggested Positions -

Long Feb $77.50 call (PVH1218B77.5) Entry $2.40

- or -

Long Mar $80 call (PVH1217C80) Entry $2.55

01/24/12 trade triggered at $77.60
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 24 at $77.60
Earnings Date 03/28/12 (unconfirmed)
Average Daily Volume = 867 million
Listed on January 19, 2012


Teva Pharmaceuticals - TEVA - close: 45.87 change: +0.04

Stop Loss: 43.75
Target(s): 49.50
Current Option Gain/Loss: + 6.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/24 update: The upward momentum in TEVA has stalled. Shares were flat yesterday and they eked out a 4-cent gain today. Volume has been low two days in a row. If you're looking for a new entry point I'd prefer to wait for a dip or a bounce near $45.00.

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: 67.26 change: +0.67

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:
01/24 update: TJX continues to show strength. The stock flirted with a new record high this afternoon. Volume does seem to be fading this week. 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

Abercrombie & Fitch - ANF - close: 45.67 change: +1.44

Stop Loss: 46.05
Target(s): 40.00 or 37.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/24 update: Hmm... it was an interesting day in ANF. Most of the market gapped down or spiked lower this morning and then bounced. ANF was pretty much strong right from the start and rallied to a +3.2% gain. I'm not giving up yet. The larger trend is still bearish.

I am suggesting a trigger to buy puts at $43.40 (new relative low). I am listing two different targets. I'd look to exit at $40.00 or $37.00. Keep in mind the $40.00 level could offer some round-number support. FYI: The Point & Figure chart for ANF is very bullish with a long-term $12 target.

Trigger @ 43.40

- Suggested Positions -

buy the Feb $43 PUT (ANF1218N43)

Entry on January xx at $ xx.xx
Earnings Date 02/15/12 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on January 23, 2012


Deckers Outdoor Corp. - DECK - close: 81.13 change: -0.25

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:
01/24 update: DECK dipped to new two-week lows this morning at $78.33 but shares rebounded to close back above the $81 level. The strong intraday bounce is short-term bullish. I'd expect a bounce back toward the $82.50-83.00 zone. Wait for a new lower high before considering new positions.

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