Editor's Note:

TJX hits our exit target prior to its 2-for-1 split tomorrow. We also closed our HOT trade as a winner prior to earnings tomorrow. Meanwhile MCP and DECK were stopped out.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 78.66 change: +0.29

Stop Loss: 77.75
Target(s): 84.00
Current Option Gain/Loss: -54.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/01 update: Berkshire did not make a lot of progress today. Shares failed to keep pace with the market and only gained +0.3%. This makes me cautious. 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: 72.98 change: +1.23

Stop Loss: 69.75
Target(s): 76.50
Current Option Gain/Loss: +17.6%
Time Frame: exit prior to the Feb. 8th earnings
New Positions: see below

Comments:
02/01 update: CTSH continues to show relative strength. The stock outperformed with a +1.7% gain and a breakout to new relative highs. I am raising our stop loss up to $69.75. It's also worth noting that volume improved on today's rally.

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

02/01/12 new stop loss @ 69.75
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: 51.92 change: +0.76

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -41.0%
Time Frame: exit prior to February earnings
New Positions: see below

Comments:
02/01 update: Shares of ESRX rallied +1.4% but our call option didn't move very much. This stock remains under last week's highs near $52.75. I am not suggesting new positions at this time.

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: 112.52 change: +2.35

Stop Loss: 106.95
Target(s): 114.50 for Feb call & 118.00 for April call
Current Option Gain/Loss: Feb $110c: +54.4% & Apr$115c: +27.5%.
Time Frame: 3 to 4 weeks
New Positions: , see below

Comments:
02/01 update: FLS delivered a strong session. The stock surged to $113.95 intraday and settled with a +2.1% gain. This breakout to new relative highs is bullish. I am raising our stop loss up to $106.95. More conservative traders may want to take profits now, especially if you're holding the February calls.

Please note I am adjusting our exit targets. We'll aim for $114.50 with our February calls and aim for $118.00 with our April calls. FYI: The Point & Figure chart for FLS is bullish with a $139 target.

- Suggested Positions -

Long FEB $110 call (FLS1218B110) Entry $2.59
exit target: $114.50

- or -

Long APR $115 call (FLS1221D115) Entry $4.00
exit target: $118.00

02/01/12 new stop loss @ 106.95
02/01/12 adjusted exit targets: $114.50 for Feb call, $118.00 for Apr call
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


iShares Russell 2000 ETF - IWM - close: 80.72 change: +1.70

Stop Loss: 77.95
Target(s): 82.50
Current Option Gain/Loss: +62.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/01 update: After four days of consolidating sideways the IWM has finally broken out past resistance near $80.00. We are moving our stop loss up to $77.95. 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

02/01/12 new stop loss @ 77.95
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: 95.38 change: +0.54

Stop Loss: 92.45
Target(s): 98.50
Current Option Gain/Loss:(Jan$95c: -100%) Feb$95c: +13.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/01 update: The IYT tagged new relative highs intraday but couldn't get past the $96.00 mark. The sector ETF underperformed the major indices. I am 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: 92.50 change: +1.11

Stop Loss: 89.65
Target(s): 94.75
Current Option Gain/Loss: +126.6%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
02/01 update: LH rallied to a +1.2% gain and broke through resistance near $92.00. I am raising our stop loss up to $89.65.

If you have not done so yet readers may want to take profits now with the big on our call at $3.40 (+126%).

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

02/01/12 new stop loss @ 89.65
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: 75.74 change: +0.52

Stop Loss: 73.40
Target(s): 82.00
Current Option Gain/Loss: - 44.0%
Time Frame: up to the Feb. 9th earnings report.
New Positions: see below

Comments:
02/01 update: LUFK drifted higher and closed up +0.69% but shares have still not broken out to new relative highs. 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


Monsanto - MON - close: 83.41 change: +1.36

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:
02/01 update: MON rallied to new 52-week highs with today's +1.6% gain. More conservative traders might want to raise their stops closer to the $80 level.

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: 76.47 change: -0.72

Stop Loss: 74.75
Target(s): 83.50
Current Option Gain/Loss: Feb77.50c: -58.3% & Mar$80c: -45.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/01 update: The action in PVH on Wednesday was disappointing. The stock's morning rally attempt failed and shares underperformed the market with a -0.9% decline. Technically today's move has created a bearish engulfing candlestick pattern, which is a potential bearish reversal signal. 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: 70.75 change: +1.12

Stop Loss: 67.90
Target(s): 74.75
Current Option Gain/Loss: + 4.4%
Time Frame: up to the Feb. 16 earnings report
New Positions: see below

Comments:
02/01 update: Hmm... I could not find any news to explain the volatility in SPW this morning. Shares spiked from $68.35 to 71.69 in minutes. The stock eventually settled with a +1.6% gain. If you were waiting for a new relative high as your entry point this should qualify.

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


Wellcare Health Plans - WCG - close: 61.96 change: +2.20

Stop Loss: 57.75
Target(s): 64.50
Current Option Gain/Loss: + 7.5%
Time Frame: exit prior to earnings on Feb. 15th
New Positions: see below

Comments:
02/01 update: Our new WCG trade is off to a strong start. We had a trigger to buy calls at $60.25 but the stock gapped open higher at $60.28. Shares surged to $62.80 before settling with a +3.6% gain. The breakout past $60.00 is very bullish and WCG has closed at new four-year highs. My only concern right now is the sudden expansion in WCG's option spreads.

Earlier Comments:
Our target is $64.50. We do not want to hold over the Feb. 15th earnings report. FYI: The Point & Figure chart for WCG is bullish with a long-term $74 target.

- Suggested Positions -

Long Feb $60 call (WCG1218B60) Entry $2.79

02/01/12 trade opened on gap higher at $60.28, above our trigger of $60.25

Entry on February 01 at $60.28
Earnings Date 02/15/12 (confirmed)
Average Daily Volume = 485 thousand
Listed on January 31, 2012


PUT Play Updates

Cimarex Energy Co - XEC - close: 58.50 change: +0.12

Stop Loss: 60.25
Target(s): 51.00
Current Option Gain/Loss: -48.6%
Time Frame: exit prior to earnings on Feb. 15th
New Positions: see below

Comments:
02/01 update: XEC underperformed the market with a +0.2% gain versus +0.9% for the S&P 500 and 1.3% in the oil services sector index. I am not suggesting new bearish positions. If the market continues to rally XEC could easily see the bounce continue.

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


CLOSED BULLISH PLAYS

Starwood Hotel & Resorts - HOT - close: 55.05 change: +0.81

Stop Loss: 53.15
Target(s): 57.50
Current Option Gain/Loss: +82.6%
Time Frame: exit prior to Feb. 2nd earnings.
New Positions: see below

Comments:
02/01 update: It was our plan to close our HOT positions today at the closing bell to avoid holding over earnings out tomorrow morning.

- Suggested Positions -

Long Feb $52.50 call (HOT1218B52.5) entry: 1.67, exit $3.05 (+82.6%)

02/01/12 planned exit at the close
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.

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


Molycorp, Inc. - MCP - close: 29.69 change: -1.29

Stop Loss: 29.75
Target(s): 38.50
Current Option Gain/Loss: Feb$31c: -57.0% & Mar$35c: -44.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/01 update: It was a disappointing session for MCP. Prior to the opening bell news broke that MCP was receiving a $390 million investment from Molymet, a Chilean company. According to news sources Morgan Stanley thought the deal was beneficial and allowed for new investment by MCP. Yet J.P.Morgan's analyst felt that the investment raised doubts about MCP's cash flow. Even though the market was in a bullish mood it seems that bears won the day with MCP.

The stock quickly sank off its morning highs and broke down under what should have been support near $30.00. Our stop was hit at $29.75.

I would keep MCP on your watch list. 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.

- Suggested Positions -

Feb $31 call (MCP1218B31) Entry $2.14, exit $0.92 (-57.0%)

- or -

Mar $35 call (MCP1217C35) Entry $1.54, exit $0.85 (-44.8%)

02/01/12 stopped out at $29.75
01/31/12 trade opened. MCP gapped higher at $32.53
01/30/12 not open yet. try again.

chart:

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


TJX Companies - TJX - close: 68.29 change: +0.15

Stop Loss: 66.75
Target(s): 68.50
Current Option Gain/Loss:(Jan$65c: +85.0%) & Feb$65c: +108.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/01 update: Target achieved.

We were planning to exit at the closing bell tonight but TJX hit our exit target at $68.50 instead. The bid on our Feb. $65 call was at $3.65 (+108.5%).

Shares begin trading at their new 2-for-1 split values tomorrow morning.

- Suggested Positions -

Feb $65 call (TJX1218B65) Entry $1.75, exit $3.65 (+108.5%)

02/01/12 target hit at $68.50
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

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


CLOSED BEARISH PLAYS

Deckers Outdoor Corp. - DECK - close: 83.65 change: +2.80

Stop Loss: 84.25
Target(s): 77.00
Current Option Gain/Loss: -53.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/01 update: The stock market is surging to new multi-month highs and that makes it tough to trade bearish positions. DECK rallied to $85.39 intraday before settling with a +3.4% gain. The move today looks like a breakout past one of its bearish trend lines of lower highs.

Our stop loss was hit at $84.25.

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 -

FEB $80 PUT (DECK1218N80) Entry $3.10 exit $1.45 (-53.2%)

02/01/12 stopped out at $84.25
01/30/12 new stop loss @ 84.25
01/25/12 DECK is not cooperating. Readers may want to exit immediately.

chart:

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