Editor's Note:

We had three trades opened today as the stock market closed its best January performance in 15 years (opened: MCP, MON, SPW).

Keep in mind that we want to exit our TJX trade tomorrow. See the update below for details.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 78.37 change: -0.32

Stop Loss: 77.75
Target(s): 84.00
Current Option Gain/Loss: -55.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/31 update: The stock market's morning rally attempt failed and BRK.B followed the market lower. Shares are once again near support at $78.00. Any further weakness could hit our stop loss at $77.75. I am not suggesting new positions at current levels.

We do not want to hold over the late February earnings report.

- Suggested Positions -

Long Feb $80 call (BRKB1218B80) entry $0.90

01/28/12 new stop loss @ 77.75, adjusted exit to $84.00
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: 71.75 change: +0.76

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:
01/31 update: CTSH outperformed the market with a +1.0% gain. Shares look poised to rally past short-term resistance near $72.00. It's worth noting that volume continues to fade lower.

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


Express Scripts, Inc. - ESRX - close: 51.16 change: -0.03

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -41.5%
Time Frame: exit prior to February earnings
New Positions: see below

Comments:
01/31 update: ESRX recovered off its midday lows to close virtually unchanged, only down three cents on the session. I will point out that the MACD indicator on the daily chart has produced a near sell signal.

Earlier Comments:
This stock could see more short covering. The most recent data listed short interest at almost 17% of the 482 million-share float. FYI: The Point & Figure chart for ESRX is bullish with a $75 target.

- Suggested Positions -

Long Feb $52.50 call (ESRX1218B52.5) Entry $2.00

Entry on January 26 at $52.67
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 6.6 million
Listed on January 25, 2012


Flowserve Corp. - FLS - close: 110.17 change: +1.42

Stop Loss: 105.75
Target(s): 114.50
Current Option Gain/Loss: Feb $110c: + 2.3% & Apr$115c: + 2.5%.
Time Frame: 3 to 4 weeks
New Positions: , see below

Comments:
01/31 update: FLS displayed relative strength with a +1.3% gain. Shares managed to hit new relative highs this afternoon as well. Volume was healthy too.

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.

- Suggested Positions -

Long FEB $110 call (FLS1218B110) Entry $2.59

- or -

Long APR $115 call (FLS1221D115) Entry $4.00

01/30/12 new stop loss at $105.75
01/26/12 trade opened on FLS' gap open higher at $109.21.
01/25/12 adjusted entry point strategy to buy calls when FLS hits $109.05, and use a stop loss at $105.45

Entry on January 26 at $109.21
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 400 thousand
Listed on January 21, 2012


Starwood Hotel & Resorts - HOT - close: 54.24 change: +0.09

Stop Loss: 53.15
Target(s): 57.50
Current Option Gain/Loss: +58.6%
Time Frame: exit prior to Feb. 2nd earnings.
New Positions: see below

Comments:
01/31 update: It was a quiet session for HOT. Shares spent the day in a narrow range. Tomorrow is our last day. We want to exit at the closing bell tomorrow to avoid holding over earnings. I am inching our stop loss up to $53.15. I am not suggesting new positions at this time.

Please note our new stop loss at $52.95.

- Suggested Positions -

Long Feb $52.50 call (HOT1218B52.5) entry: 1.67

01/31/12 new stop loss @ 53.15
01/30/12 new stop loss @ 52.95
01/28/12 prepare to exit on Feb. 1st at the close
01/28/12 new stop loss @ 52.65
01/26/12 sold half @ the open. Bid was $2.95 (+76.6%)
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: 79.02 change: -0.08

Stop Loss: 77.45
Target(s): 82.50
Current Option Gain/Loss: -14.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/31 update: The small cap ETF continues to churn sideways in the $78.50-80.00 zone. Please note that I am raising our stop loss to $77.45. 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

01/31/12 new stop loss @ 77.45
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: 94.84 change: -0.08

Stop Loss: 92.45
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:
01/31 update: The IYT briefly traded under $94.00 and its rising 10-dma before bouncing back to close almost unchanged on the session. I am raising our stop loss up to $92.45. We're not suggesting new positions at this time.

- Suggested Positions -

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

01/31/12 new stop loss @ 92.45
01/28/12 new stop loss @ 91.75
01/21/12 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: 91.39 change: +0.47

Stop Loss: 88.40
Target(s): 94.75
Current Option Gain/Loss: + 80.0%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
01/31 update: LH showed a little relative strength today with a +0.5% gain. Yet shares are still struggling with resistance near $92.00. I am reluctant to open new positions at this time.

If you have not done so yet readers may want to take profits now with the big on our call at $2.70 (+80%).

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

01/31/12 If you haven't done so yet readers may want to take profits now (+80%)
01/28/12 new stop loss @ 88.40
01/26/12 sold half @ the open, bid @ $2.65 (+76.6%)
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: 75.22 change: +0.66

Stop Loss: 73.40
Target(s): 82.00
Current Option Gain/Loss: - 38.9%
Time Frame: up to the Feb. 9th earnings report.
New Positions: see below

Comments:
01/31 update: LUFK continues to consolidate sideways in the $74-76 zone. I am not suggesting new positions at this time.

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


Molycorp, Inc. - MCP - close: 30.98 change: -0.14

Stop Loss: 29.75
Target(s): 38.50
Current Option Gain/Loss: Feb$31c: -27.5% & Mar$35c: -19.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/31 update: Our MCP trade is now open. Both the stock and the S&P 500 gapped open higher. Unfortunately both also reversed lower and failed to hold their early gains. I see today's move as potentially bearish and a possible short-term top. Look for shares of MCP to retest support near $30.00. Nimble traders can buy calls on a bounce from the $30 area.

Earlier Comments:
This stock could see a short squeeze with the most recent data listing short interest at 38.6% of the 51.8 million-share float.

I do see potential resistance near $35 and its 100-dma but we're going to aim for $38.50 given the chance that MCP does see some short covering. FYI: The Point & Figure chart for MCP is bullish with a long-term $49 target.

- Suggested Positions -

Long Feb $31 call (MCP1218B31) Entry $2.14

- or -

Long Mar $35 call (MCP1217C35) Entry $1.54

01/31/12 trade opened. MCP gapped higher at $32.53
01/30/12 not open yet. try again.

Entry on January 31 at $32.53
Earnings Date 03/08/12 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on January 28, 2012


Monsanto - MON - close: 82.05 change: -0.24

Stop Loss: 78.99
Target(s): 86.90
Current Option Gain/Loss: Feb85c: -20.0% & Mar$85c: -10.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/31 update: Our new MON call trade is open. Shares rallied to $82.95 intraday. Our trigger to buy calls was hit at $82.75. It was kind of a choppy day for shares of MON with above average volume. More conservative traders might want to wait for a new rally past $83.00 as an alternative entry point.

Earlier Comments:
MON can be somewhat volatile so we want to keep our position size small. If triggered our target is $86.90. FYI: The Point & Figure chart for MON is bullish with a long-term $113 target.

(small positions) - Suggested Positions -

Long FEB $85 call (MON1218B85) Entry $0.80

- or -

Long MAR $85 call (MON1217C85) Entry $1.80

Entry on January 31 at $82.75
Earnings Date 01/05/12
Average Daily Volume = 4.8 million
Listed on January 30, 2012


PVH Corp. - PVH - close: 77.19 change: +0.57

Stop Loss: 74.75
Target(s): 83.50
Current Option Gain/Loss: Feb77.50c: -47.9% & Mar$80c: -35.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/31 update: PVH displayed a little bit of strength with a bounce back above the 10-dma and a +0.7% gain on the session. 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


SPX Corp. - SPW - close: 69.63 change: -0.39

Stop Loss: 67.90
Target(s): 74.75
Current Option Gain/Loss: -15.5%
Time Frame: up to the Feb. 16 earnings report
New Positions: see below

Comments:
01/31 update: Our bullish SPW trade has been triggered at $70.50. Aggressive traders could still buy calls now. If you're looking for a new entry point consider waiting for a new relative high past $70.80.

Earlier Comments:
Our target is the $74.75 mark but more aggressive traders could aim higher. We do not want to hold over the Feb. 16th earnings report. FYI: The Point & Figure chart for SPW is bullish with an $82 target.

- Suggested Positions -

Long Feb $70 call (SPW1218B70) Entry $2.25

Entry on January 31 at $70.50
Earnings Date 02/16/12 (unconfirmed)
Average Daily Volume = 711 thousand
Listed on January 26, 2012


TJX Companies - TJX - close: 68.14 change: +0.69

Stop Loss: 66.75
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:
01/31 update: TJX continues to climb, which is good news for us. Tomorrow is our last day. If TJX does not hit our exit target at $68.50 tomorrow then we will exit anyway at the closing bell to avoid holding over the 2-for-1 split on Thursday. Cautious traders will want to exit immediately tomorrow morning to lock in a gain. I am raising our stop loss to $66.75.

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

01/31/12 new stop loss @ 66.75, exit tomorrow at the close (see details above)
01/30/12 prepare to exit soon!
01/26/12 new stop loss @ 66.49, Consider taking profits now!
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: 80.85 change: -0.00

Stop Loss: 84.25
Target(s): 77.00
Current Option Gain/Loss: -12.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/31 update: DECK dipped to round-number support near $80.00 and bounced back to close unchanged on the session. Readers may want to look for a new drop under $80.00 as a bearish entry point.

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

01/30/12 new stop loss @ 84.25
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


Cimarex Energy Co - XEC - close: 58.38 change: +0.68

Stop Loss: 60.25
Target(s): 51.00
Current Option Gain/Loss: -43.2%
Time Frame: exit prior to earnings on Feb. 15th
New Positions: see below

Comments:
01/31 update: The oversold bounce in XEC continues but shares remain under the bearish trend of lower highs. I would wait for a drop under $57.25 before considering new bearish positions.

Our target is $51.00. We do not want to hold over the Feb 15th earnings report.

- Suggested Positions -

Long FEB $55 PUT (XEC1218N55) Entry $1.85

01/30/12 Trade opened on XEC gap down at $56.57

Entry on January 30 at $56.57
Earnings Date 02/15/12 (confirmed)
Average Daily Volume = 1.0 million
Listed on January 28, 2012