Editor's Note:

Traders bought the dip this morning but small caps underperformed the major indices today.

CTSH was stopped out. CTXS has been triggered.

Current Portfolio:


CALL Play Updates

Chicago Bridge & Iron - CBI - close: 43.73 change: -0.67

Stop Loss: 43.25
Target(s): 49.25
Current Option Gain/Loss: Unopened
Time Frame: up to the Feb. 23rd earnings report
New Positions: Yes, see below

Comments:
02/07 update: Hmm... CBI underperformed the market today. Upward momentum has stalled a bit but the trend is still higher. We are still on the sidelines waiting for a breakout past resistance.

I am suggesting a trigger to open bullish positions at $45.25. If triggered we'll use a stop at $43.25. Our exit target is $49.25. We do not want to hold over the Feb 23rd earnings report. FYI: The Point & Figure chart for CBI is bullish with a long-term $70 target.

(Buy Calls) Trigger @ $45.25

- Suggested Positions -

buy the MAR $45 call (CBI1217C45)

Entry on February xx at $ xx.xx
Earnings Date 02/23/12 (unconfirmed)
Average Daily Volume = 852 thousand
Listed on February 04, 2012


Citrix Systems - CTXS - close: 70.69 change: +1.25

Stop Loss: 67.45
Target(s): Feb calls: $74.75, Mar calls: $76.50
Current Option Gain/Loss: Feb70c: + 0.0% & Mar70c: - 3.0%
Time Frame: 2 to 4 weeks
New Positions: Yes, see below

Comments:
02/07 update: Our new trade on CTXS has already been triggered. The stock opened at $69.49 and rallied to $71.65 before paring its gains. Our trigger to buy calls was hit at $70.50.

The plan was to keep our position size small. Our target is $74.75 for the February calls and $76.50 for the March calls. There are less than two weeks left for February calls.

(small positions!) - Suggested Positions -

Long Feb $70 calls (CTXS1218B70) Entry $1.85

- or -

Long Mar $70 calls (CTXS1217C70) Entry $3.30

Entry on February 07 at $70.50
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on February 06, 2012


Dollar Tree - DLTR - close: 86.03 change: +0.20

Stop Loss: 84.75
Target(s): 89.75 & 92.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
02/07 update: DLTR is still slowly drifting higher. The stock looks like it is coiling for a breakout past resistance. I am suggesting we only open small positions if DLTR hits our trigger at $86.75.

Earlier Comments:
I am setting individual targets for our options below. Keep a wary eye on the $90.00 level since it might be round-number resistance. FYI: The Point & Figure chart for DLTR is bullish with a long-term $113 target.

(Buy Calls) Trigger @ 86.75 (small positions)

- Suggested Positions -

buy the Feb $87.50 call (DLTR1218B87.5)
exit target: 89.75

- or -

buy the Mar $87.50 call (DLTR1217C87.5)
exit target: 92.50

02/04/12 Only open small (half-sized) positions if DLTR hits our entry point at $86.75

Entry on February xx at $ xx.xx
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on February 02, 2012


Flowserve Corp. - FLS - close: 114.61 change: -0.34

Stop Loss: 109.45
Target(s): 114.50 for Feb call & 118.00 for April call
Current Option Gain/Loss: (Feb $110c: +48.2%) & Apr$115c: +45.0%.
Time Frame: 3 to 4 weeks
New Positions: , see below

Comments:
02/07 update: FLS recovered from its early morning lows and spent the rest of the day consolidating sideways. More conservative traders may want to raise their stop loss. I am not suggesting new positions at this time. FYI: The Point & Figure chart for FLS is bullish with a $139 target.

- Suggested Positions -

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

02/04/12 new stop loss @ 109.45
02/03/12 exit target hit at $114.50 for Feb. $110 calls. exit $5.00 (+48.2%)
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 Transportation - IYT - close: 94.97 change: -0.22

Stop Loss: 93.40
Target(s): 98.50
Current Option Gain/Loss:(Jan$95c: -100%) Feb$95c: -20.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/07 update: The IYT spiked down toward its trend line of higher lows this morning. The stock did temporarily trade under its 10-dma. More conservative traders may want to raise their stops closer to the $94.00 level.

I am not suggesting new positions at this time.

- Suggested Positions -

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

02/04/12 new stop loss @ 93.40
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: 91.95 change: +0.95

Stop Loss: 90.75
Target(s): 94.00
Current Option Gain/Loss: + 73.3%
Time Frame: up to the Feb. 10th earnings report.
New Positions: see below

Comments:
02/07 update: Whew! It doesn't get much closer than that. LH gapped open lower at $90.76 before bouncing to a +1.0% gain. That was the low for the day. Our stop loss remains at $90.75. Readers may want to exit early now. I am not suggesting new positions at this time. Remember, we plan to exit prior to the Feb. 10th earnings report.

- Suggested Positions -

Long Feb $90 call (LH1218B90) Entry $1.50

02/04/12 new stop loss @ 90.75, adjust target to $94.00
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


Pall Corp. - PLL - close: 62.53 change: +0.20

Stop Loss: 59.45
Target(s): 64.75
Current Option Gain/Loss: Feb$60c: +45.7% & Mar$60c: +24.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/07 update: PLL spent a second day consolidating sideways. I don't see any changes from my prior comments. If the market corrects lower I would look for PLL to dip toward the $61-60 zone. Our target is $64.75.

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

02/04/12 new stop loss @ 59.45

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


SPX Corp. - SPW - close: 72.94 change: -0.48

Stop Loss: 69.90
Target(s): 74.75
Current Option Gain/Loss: +60.0%
Time Frame: up to the Feb. 16 earnings report
New Positions: see below

Comments:
02/07 update: SPW is digesting its recent gains. I would not be surprised to see a dip back toward $72.00-71.50. Our exit target is $74.75 but more conservative traders may want to go ahead and exit early now. I am not suggesting new positions at this time.

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

02/04/12 new stop loss @ 69.90, readers may want to exit now to lock in gains.

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


S&P Oil ETF - XES - close: 38.16 change: +0.00

Stop Loss: 36.45
Target(s): 43.00
Current Option Gain/Loss: Feb37c: -11.1% & Mar36c: - 2.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/07 update: Traders bought the dip in the XES this morning and shares bounced back to close unchanged on the session.

Earlier Comments:
The option spreads on the XES a bit wide, which makes this a higher-risk trade. I am suggesting we keep our position size small to limit our risk. Our multi-week exit target is $43.00. I prefer the March calls but short-term traders can use February options but these expire in two weeks.

(small positions) - Suggested Positions -

Long Feb $37 call (XES1218B37) Entry $1.35

- or -

Long Mar $36 call (XES1217C36) Entry $2.45

Entry on February 06 at $37.75
Earnings Date --/--/--
Average Daily Volume = 177 thousand
Listed on February 04, 2012


PUT Play Updates

Currently we do not have any active put trades.


CLOSED BULLISH PLAYS

Cognizant Technology - CTSH - close: 72.01 change: -0.36

Stop Loss: 71.45
Target(s): 76.50
Current Option Gain/Loss: -52.9%
Time Frame: exit prior to the Feb. 8th earnings
New Positions: see below

Comments:
02/07 update: The stock market's early morning spike down was enough to push CTSH below short-term support. Our stop loss was hit at $71.45.

- Suggested Positions -

Long Feb $75 call (CTSH1218B75) Entry $0.85 exit $0.40 (-52.9%)

02/07/12 stopped out at $71.45
02/04/12 new stop loss @ 71.45
02/01/12 new stop loss @ 69.75
01/24/12 trade opened at $71.05

chart:

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