Editor's Note:

The major U.S. stock market indices all rallied to new multi-month highs as investors reacted to the FOMC announcement today. The Federal Reserve said they are likely to keep rates unchanged well into 2014 and hinted they could offer more stimulus.

I've updated a few stop losses on our active trade list below.

NOTE: We want to take profits on LH and HOT by selling half of our position at the open tomorrow.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 79.85 change: +1.37

Stop Loss: 77.45
Target(s): 83.50
Current Option Gain/Loss: +16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/25 update: BRK.B exploded higher following the FOMC announcement this afternoon. Shares rallied from support near $78 toward resistance near $80 and outperformed with a +1.7% gain. I am raising our stop loss higher to $77.45. 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

01/25/12 new stop loss @ 77.45
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: 71.77 change: +0.59

Stop Loss: 68.75
Target(s): 76.50
Current Option Gain/Loss: +11.7%
Time Frame: exit prior to the Feb. 8th earnings
New Positions: see below

Comments:
01/25 update: CTSH continues to march higher and began to rebound late this morning. The stock closed a new multi-week highs. 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: 85.34 change: -0.64

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:
01/25 update: The DLTR trade is still not open yet. Both the stock and the S&P 500 opened lower this morning. DLTR did rebound near $85 intraday. Try again tomorrow.

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)

01/25/12 still not open
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: 108.76 change: +1.05

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:
01/25 update: Hmm... our FLS trade is not open yet. FLS opened higher but the S&P 500 did not. Shares of FLS managed to rebound and close at new relative highs. I am adjusting our entry point strategy. We now want to buy calls if FLS trades at $109.05 or higher. We'll raise our stop loss to $105.45.

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.

Trigger @ 109.05, stop loss 105.45

- Suggested Positions -

buy the FEB $110 call (FLS1218B110)

- or -

buy the APR $115 call (FLS1221D115)

01/25/12 adjusted entry point strategy to buy calls when FLS hits $109.05

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: 54.77 change: +0.25

Stop Loss: 52.40
Target(s): 57.50
Current Option Gain/Loss: +91.6%
Time Frame: exit prior to earnings
New Positions: see below

Comments:
01/25 update: HOT continues to inch higher. Shares are testing potential resistance at the $55.00 level. I am suggesting we go ahead and sell at least half of our call position at the open tomorrow morning. The bid on our call is at $3.20 (+91.6%). We will raise the exit target on the remainder of our position to $57.50. I am raising our stop loss to $52.40.

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

01/25/12 prepare to sell half at the open tomorrow morning. bid on our call is currently at $3.20 (+91.6%). We will adjust the exit target on the remainder of our position to $57.50
01/25/12 new stop loss @ 52.40
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: 79.27 change: +0.67

Stop Loss: 75.45
Target(s): 82.50
Current Option Gain/Loss: +13.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/25 update: The IWM rose to new six-month highs. Shares are nearing possible resistance at the $80.00 level soon. I am not suggesting new positions at this time.

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: 94.13 change: +1.25

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

Comments:
01/25 update: A strong performance in the airline stocks overshadowed another dip in the railroads. The IYT rallied to a +1.3% gain. A breakout past resistance near $95.00 would be very bullish and suggest a run towards $100.

- 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: 91.78 change: +0.60

Stop Loss: 87.90
Target(s): 94.75
Current Option Gain/Loss: +106.6%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
01/25 update: There was a sharp drop this morning but traders bought the dip near round-number support at $90. LH bounced back into positive territory. I am raising our stop loss to $87.90.

NOTE: The call option has doubled. We want to sell half at the open tomorrow morning. We'll keep the remainder and aim for $94.75.

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

01/25/12 sell half at the open tomorrow. Bid on the Feb. $90 call is at $3.10 (+106%).
01/25/12 new stop loss @ 87.90
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


Lufkin Industries - LUFK - close: 76.29 change: +1.04

Stop Loss: 73.40
Target(s): 82.00
Current Option Gain/Loss: - 11.8%
Time Frame: up to the Feb. 9th earnings report.
New Positions: see below

Comments:
01/25 update: LUFK briefly rallied to a new relative high and hit our trigger to buy calls at $76.60. If you're looking for an entry point consider waiting for another new relative high ($76.80) before initiating positions.

The options inflated pretty rapidly today. Readers might want to keep their position size small. Our target is $82.00 but we want to exit prior to the Feb. 9th earnings report. FYI: The Point & Figure chart for LUFK is bullish with an $85 target.

- Suggested Positions -

Long Feb $80 call (LUFK1218B80) Entry $2.95

01/25/12 triggered @ 76.60

Entry on January 25 at $76.60
Earnings Date 02/09/12 (confirmed)
Average Daily Volume = 300 thousand
Listed on January 24, 2012


Mohawk Industries - MHK - close: 63.74 change: +0.63

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: -45.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/25 update: MHK appears to be ending the three-day correction lower. The stock is hovering under short-term resistance at $64.00. A move past $64.00 could be used as a new entry point.

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: 59.59 change: -0.41

Stop Loss: 58.75
Target(s): 64.00
Current Option Gain/Loss: -47.0%
Time Frame: up to NOC's early February earnings report.
New Positions: see below

Comments:
01/25 update: Hmm... I can't explain the relative weakness in NOC. Stocks were general were a bit weak this morning but NOC underperformed today. The stock is testing technical support at its simple 200-dma. I would be tempted to buy calls on a new rebound above $60.00. The intraday low today was $58.86. Our stop is at $57.75. Don't forget 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: 46.67 change: +0.49

Stop Loss: 45.45
Target(s): 49.00
Current Option Gain/Loss: +16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/25 update: OMC bounced to a +1.0% gain. The move today looks like a new entry point for bullish positions.

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: 77.60 change: -0.34

Stop Loss: 74.75
Target(s): 83.50
Current Option Gain/Loss: Feb77.50c: -18.7% & Mar$80c: -15.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/25 update: The rally in PVH paused a bit today. The intraday bounce off its morning lows did not keep up with the major indices. I am not suggesting new positions at this time.

Earlier Comments:
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.

- Suggested Positions - (small 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: 46.09 change: +0.23

Stop Loss: 44.40
Target(s): 49.50
Current Option Gain/Loss: +12.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/25 update: Traders bought the dip near its rising 10-dma this morning. I am raising our stop loss up to $44.40.

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

01/25/12 new stop loss @ 44.40
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: 67.96 change: +0.70

Stop Loss: 64.75
Target(s): 68.50
Current Option Gain/Loss:(Jan$65c: +85.0%) & Feb$65c: +82.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/25 update: TJX rallied to another new record high. Readers may want to lock in profits now and/or raise their stop loss. Our final exit target is $68.50. More aggressive traders could aim for the $70.00 region. 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: 46.84 change: +1.17

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:
01/25 update: ANF continues to bounce. Shares outperformed with a +2.5% gain. The rally stalled near its 50-dma. If ANF posts another gain tomorrow then we'll probably drop it as a bearish candidate. At the moment our plan is unchanged.

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: 82.90 change: +1.77

Stop Loss: 85.25
Target(s): 77.00
Current Option Gain/Loss: -22.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/25 update: The stock market's widespread rally is making it tough for bearish trades. DECK outperformed today with a +2.1% gain. It is worth noting that today's rally stalled near last week's low (potential resistance).

Four days ago it looked like DECK has produced a bearish reversal. Today's gain looks like the end to a three-day bullish reversal pattern. This choppiness is really hard to trade. I am not suggesting new positions at this time. More conservative traders may want to abandon ship immediately.

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

01/25/12 DECK is not cooperating. Readers may want to exit immediately.

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