Editor's Note:

We are going to exit a few trades tomorrow at the opening bell. Unfortunately, I am concerned that the jobs data tomorrow will have a big impact on our exit price. A better than expected jobs report could spark a gap open higher. Naturally a disappointing jobs number could produce a widespread gap down at the open.

We did see our new play on PLL get triggered today.

Current Portfolio:


CALL Play Updates

Berkshire Hathaway Inc. - BRK.B - close: 78.73 change: +0.07

Stop Loss: 77.75
Target(s): 84.00
Current Option Gain/Loss: -61.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/02 update: BRK.B is just not cooperating. The larger trend is still bullish but I am suggesting we exit since BRK.B. isn't moving. The stock seems stuck in this $78-80 trading range. I would reconsider buying calls on BRK.B again if the stock can breakout past resistance near $80.00.

We will close this trade tomorrow morning at the opening bell.

- Suggested Positions -

Long Feb $80 call (BRKB1218B80) entry $0.90

02/02/12 prepare to exit at the open tomorrow morning.
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: 72.62 change: -0.36

Stop Loss: 69.75
Target(s): 76.50
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to the Feb. 8th earnings
New Positions: see below

Comments:
02/02 update: We only have a few days left and our position is at breakeven. Readers may want to go ahead and exit early. Today's profit taking is normal after yesterday's surge higher. Look for support near the rising 10-dma. Readers might want to raise their stops closer to the $71.40 area. No new positions at this time.

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: 51.75 change: -0.17

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: -49.0%
Time Frame: exit prior to February earnings
New Positions: see below

Comments:
02/02 update: The upward momentum in ESRX has stalled. I am suggesting an early exit tomorrow morning at the opening bell. I would keep ESRX on your watch list. A breakout past the $53.00 area could be a new bullish entry point.

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

02/02/12 ESRX is not performing. We want to exit early at the open tomorrow.

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: 111.97 change: -0.55

Stop Loss: 107.95
Target(s): 114.50 for Feb call & 118.00 for April call
Current Option Gain/Loss: Feb $110c: +38.9% & Apr$115c: +20.0%.
Time Frame: 3 to 4 weeks
New Positions: , see below

Comments:
02/02 update: The rally in FLS stalled as investors wait for the jobs report due out Friday morning. I am not suggesting new positions at this time. More conservative traders may want to exit early now. Please note our new stop loss at $107.95. 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

02/02/12 new stop loss @ 107.95
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: 81.18 change: +0.46

Stop Loss: 77.95
Target(s): 82.50
Current Option Gain/Loss: +78.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/02 update: The IWM continues to perform well. Shares closed at new six-month highs today. Readers may want to take profits now. I am not suggesting new positions. We will adjust our stop loss to $78.75.

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

02/02/12 new stop loss @ 78.75
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: 94.75 change: -0.63

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:
02/02 update: The transports saw a little profit taking today with the IYT down -0.6%. Shares are nearing short-term technical support at the rising 10-dma so this ETF should see a rebound soon. More conservative traders may want to raise their stop loss higher. 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: 92.42 change: -0.08

Stop Loss: 89.65
Target(s): 94.75
Current Option Gain/Loss: +113.3%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
02/02 update: LH held up reasonably well today. Traders bought the dip twice near $91.75 this morning. I don't see any changes from my prior comments.

If you have not done so yet readers may want to take profits now.

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: 76.11 change: +0.37

Stop Loss: 73.40
Target(s): 82.00
Current Option Gain/Loss: - 47.5%
Time Frame: up to the Feb. 9th earnings report.
New Positions: see below

Comments:
02/02 update: The trend in LUFK is bullish but the stock is just not moving fast enough. I am suggesting we exit this trade tomorrow morning at the open.

- Suggested Positions -

Long Feb $80 call (LUFK1218B80) Entry $2.95

02/02/12 exit tomorrow at the open.
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: 82.13 change: -1.28

Stop Loss: 78.99
Target(s): 86.90
Current Option Gain/Loss: Feb85c: -33.7% & Mar$85c: -16.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/02 update: MON saw some profit taking today with a dip back toward prior resistance. The $82.00 area should be new support. Although I will point out that today's decline has produced a bearish engulfing candlestick pattern, which is a potential bearish reversal signal. I'd wait for a bounce from the $82 level before considering new positions. 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


Pall Corp. - PLL - close: 61.04 change: +0.57

Stop Loss: 58.25
Target(s): 64.75
Current Option Gain/Loss: Feb$60c: -14.2% & Mar$60c: -10.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/02 update: PLL continues to show relative strength. The stock rallied +0.9% and broke out to new relative highs. Shares also hit our trigger to open bullish positions at $61.00. Our target is $64.75.

NOTE: PLL is due to trade ex-dividend on Feb. 3rd this week. Look for shares to gap open lower by about 21 cents on Friday.

FYI: The Point & Figure chart for PLL is bullish with an $83 target.

- Suggested Positions -

Long FEB $60 call (PLL1218B60) Entry $1.75

- or -

Long MAR $60 call (PLL1217C60) Entry $2.90

Entry on February 02 at $61.00
Earnings Date 03/12/12 (unconfirmed)
Average Daily Volume = 769 thousand
Listed on January 31, 2012


PVH Corp. - PVH - close: 76.26 change: -0.21

Stop Loss: 74.75
Target(s): 83.50
Current Option Gain/Loss: Feb77.50c: -70.8% & Mar$80c: -51.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/02 update: Big picture the trend for PVH still looks bullish. Short-term the upward momentum has stalled. I am suggesting we exit positions at the opening bell tomorrow. If PVH can close over $78.00 we might take another look at it.

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

02/02/12 prepare to exit at the open tomorrow.
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: 70.70 change: -0.05

Stop Loss: 67.90
Target(s): 74.75
Current Option Gain/Loss: + 6.6%
Time Frame: up to the Feb. 16 earnings report
New Positions: see below

Comments:
02/02 update: SPW held up reasonably well with traders buying the dips near $70.00 intraday. If the market opens positive tomorrow I would use it as a new bullish entry point on SPW.

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: 61.25 change: -0.71

Stop Loss: 57.75
Target(s): 64.50
Current Option Gain/Loss: +11.1%
Time Frame: exit prior to earnings on Feb. 15th
New Positions: see below

Comments:
02/02 update: WCG saw a little bit of profit taking after yesterday's rally to new highs. A dip or a bounce near $60.00 could be used as a new bullish entry point. Thankfully the options spreads have improved significantly today (bid 3.10/ask 3.40).

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: 59.77 change: +1.27

Stop Loss: 60.25
Target(s): 51.00
Current Option Gain/Loss: -62.1%
Time Frame: exit prior to earnings on Feb. 15th
New Positions: see below

Comments:
02/02 update: XEC outperformed the major indices and its peers in the energy sector with a +2.1% gain today. Shares are nearing what should be resistance at the $60.00 level. A failed rally here could be used as a new bearish entry point. However, if the jobs report comes in strong tomorrow morning a market rally could push XEC past $60 and hit our stop loss at $60.25.

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