Editor's Note:

It was a relatively quiet day on Wall Street. Stocks rebounded off their late morning lows. The major indices continue to drift higher.

Current Portfolio:


CALL Play Updates

Chicago Bridge & Iron - CBI - close: 43.49 change: -0.24

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:
02/08 update: CBI is now down three days in a row. This relative weakness is starting to worry me. Fortunately, 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: 71.31 change: +0.62

Stop Loss: 67.45
Target(s): Feb calls: $74.75, Mar calls: $76.50
Current Option Gain/Loss: Feb70c: +16.2% & Mar70c: + 9.0%
Time Frame: 2 to 4 weeks
New Positions: Yes, see below

Comments:
02/08 update: Traders bought the di in CTXS this morning near $70. Shares bounced back to a _0.8% gain, outpacing the major indices.

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: 85.28 change: -0.75

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:
02/08 update: DLTR has been struggling to build on its bullish trend. Shares are testing short-term support near $85.00. We are still waiting for a breakout higher. I am suggesting we 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: 114.00 change: -0.61

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: +35.0%.
Time Frame: 3 to 4 weeks
New Positions: , see below

Comments:
02/08 update: The last couple of days has seen upward momentum in FLS stall. Is this just a pause before shares continue higher? Or is it a top before shares dip back toward the $110 area (or lower)? Readers may want to exit early now or 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: 94.56 change: -0.41

Stop Loss: 93.40
Target(s): 98.50
Current Option Gain/Loss:(Jan$95c: -100%) Feb$95c: -41.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/08 update: The upward momentum in the transports has also stalled. The IYT is down three days in a row. It's not a serious correction yet but shares are testing short-term support near $94.00. 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: 91.99 change: +0.04

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:
02/08 update: The early morning rally attempt in LH faded. Shares barely closed in positive territory. Investors might be cautious about earnings. Tomorrow is our last day. We plan to exit tomorrow (Thursday) at the closing bell to avoid holding over the earnings announcement on Friday morning.

- Suggested Positions -

Long Feb $90 call (LH1218B90) Entry $1.50

02/08/12 prepare to exit tomorrow at the close
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


3M Co. - MMM - close: 87.97 change: +0.08

Stop Loss: 86.45
Target(s): 94.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
02/08 update: Hmm... if we look at an intraday chart of MMM it certainly looks like shares traded above $88.50 but I checked two different quote services and both said the intraday high was only $88.29. Thus our trade is not open yet.

The plan is to buy calls when MMM trades at $88.50 or higher. The $90 level could be round-number resistance but we're setting our exit target at $94.00. We'll use a lower target for our February calls.

FYI: The Point & Figure chart for MMM is bullish with a $109 target.

Breakout Trigger (buy calls) @ $88.50

- Suggested Positions -

buy the Feb $87.50 call (MMM1218B87.5)
(Feb. options expire after Feb. 17th)

- or -

buy the MAR $90 call (MMM1217C90)

Entry on February xx at $ xx.xx
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on February 07, 2012


Pall Corp. - PLL - close: 62.96 change: +0.43

Stop Loss: 59.45
Target(s): 64.75
Current Option Gain/Loss: Feb$60c: +37.1% & Mar$60c: +34.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/08 update: Traders bought the dip in PLL prior to lunchtime and shares advanced to new relative highs. Our target is $64.75.

NOTE: The option spreads widened on us today and not in our favor with the Feb. $60 calls.

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: 72.33 change: -0.61

Stop Loss: 69.90
Target(s): 74.75
Current Option Gain/Loss: +37.7%
Time Frame: up to the Feb. 16 earnings report
New Positions: see below

Comments:
02/08 update: SPW has been slowly consolidating lower for three days now. I would expect a bounce off its 10-dma or in the $71-70 zone. 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: 38.21 change: +0.05

Stop Loss: 36.45
Target(s): 43.00
Current Option Gain/Loss: Feb37c: -18.5% & Mar36c: - 2.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/08 update: The XES managed to eke out a small gain on below average volume. Readers may want to wait for a dip or a bounce in the $37.50-37.00 zone before initiating new positions.

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.