Editor's Note:

The market was in a festive mood on Monday with stocks producing a widespread rally.

We closed our DOV trade at the open this morning.

Current Portfolio:


CALL Play Updates

American Tower Corp. - AMT - close: 76.90 change: +0.23

Stop Loss: 75.40
Target(s): 79.85 & 82.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
12/17/12: Traders bought the midday dip in AMT and the stock closed near its recent highs. The stock looks poised to breakout past the $77.00 level soon. More aggressive traders may want to go ahead and buy calls now. Currently the plan is to buy calls when AMT hits $77.05.

If triggered we have two targets. Our first target to take profits is at $77.85. Our second, more aggressive target is $82.00 but AMT will have to rally past potential resistance at $80.00 first.

FYI: The Point & Figure chart for AMT is bullish with a triple-top breakout buy signal and an $88 target.

Trigger @ 77.05

- Suggested Positions -

buy the 2013 Jan $77.50 call (AMT1319a77.5) current ask $1.25

Entry on December xx at $ xx.xx
Average Daily Volume = 1.7 million
Listed on December 15, 2012


Abercombie & Fitch - ANF - close: 47.17 change: +0.39

Stop Loss: 44.49
Target(s): 49.85
Current Option Gain/Loss: -32.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/17/12: ANF dipped to short-term technical support at its 10-dma and bounced. More conservative traders might want to raise their stop closer to $46.

Our short-term target is $49.85 since the $50.00 mark could be resistance. More aggressive traders may want to aim for the $53-55 zone instead.

- Suggested Positions -

Long 2013 Jan $50 call (ANF1319a50) entry $1.58

Entry on December 10 at $47.48
Average Daily Volume = 5.4 million
Listed on December 08, 2012


Celgene Corp. - CELG - close: 80.44 change: +1.08

Stop Loss: 77.95
Target(s): 84.50 & 87.50
Current Option Gain/Loss: - 30.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/17/12: CELG saw a spike down this morning but shares bounced at $78.63 and now the stock is back above resistance at the $80.00 level. Readers can use today's rebound as a new bullish entry point. Cautious traders could raise their stops toward today's low.

Earlier Comments:
I am setting two targets. We'll take money off the table at $84.50 and our final target will be $87.50.

- Suggested Positions -

Long 2013 Jan $82.50 call (CELG1319a82.5) entry $2.03

12/15/12 traders should be defensive. The action this past week looks like a failed rally or bull trap pattern.

Entry on December 11 at $81.46
Average Daily Volume = 3.0 million
Listed on December 10, 2012


Energizer Holdings - ENR - close: 80.09 change: -0.11

Stop Loss: 79.40
Target(s): 84.50
Current Option Gain/Loss: -55.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/17/12: Hmm... ENR continued to underperform on Monday. Shares broke down under the $80.00 mark, which should have been support, but ENR failed to hit our stop loss. A bounce back above its 10-dma near $80.70 could be used as a new bullish entry point.

- Suggested Positions -

Long 2013 Jan $85 call (ENR1319a85) entry $0.90

12/15/12 new stop loss @ 79.40

Entry on December 07 at $80.76
Average Daily Volume = 784 thousand
Listed on December 06, 2012


Flowserve Corp. - FLS - close: 141.91 change: -0.25

Stop Loss: 138.90
Target(s): 148.50
Current Option Gain/Loss: -22.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/17/12: FLS spent Monday's session consolidating sideways near its 10-dma. The minor loss today is a sign of relative weakness. Readers may want to up their stops. I am not suggesting new positions at current levels. FYI: The Point & Figure chart for FLS is bullish with a $153 target.

- Suggested Positions -

Long 2013 Jan $145 call (FLS1319a145) Entry $2.70

Entry on December 05 at $141.50
Average Daily Volume = 518 thousand
Listed on December 04, 2012


iShares Russell 2000 - IWM - close: 83.52 change: +1.16

Stop Loss: 81.20
Target(s): 86.00
Current Option Gain/Loss: - 2.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/17/12: The small cap index and ETF delivered one of the best performances among the major indices. The IWM rallied +1.4% and is now back above its 10-dma. Readers may want to raise their stops closer to the $82 level.

- Suggested Positions -

buy the 2013 Jan $84 call (IWM1319a84) current ask $1.17

12/11/12 triggered on the gap open higher at $83.11 (trigger was 82.85)

Entry on December 11 at $83.11
Average Daily Volume = 38 million
Listed on December 10, 2012


Linkedin Corp. - LNKD - close: 114.33 change: +1.34

Stop Loss: 109.00
Target(s): 119.00
Current Option Gain/Loss: +29.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/17/12: Thankfully there was no follow through on last week's midweek reversal. LNKD is bouncing again and added 1.1% today. Shares are testing resistance at $115.00 and look poised to breakout. We are raising our exit target to $119.00.

Earlier Comments:
LNKD can be volatile so I would use small positions to limit our risk.

*Small Positions* - Suggested Positions -

Long Jan $115 call (LNKD1319a115) Entry $3.10

12/17/12 adjust exit target to $119.00
12/15/12 new stop loss @ $109.00

Entry on December 10 at $110.25
Average Daily Volume = 1.8 million
Listed on December 08, 2012


Lululemon Athletica - LULU - close: 76.36 change: +1.81

Stop Loss: 72.95
Target(s): 79.85
Current Option Gain/Loss: +24.2%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/17/12: LULU displayed relative strength today with a +2.4% gain and a rally past the $76.00 level. I am raising our exit target to $79.85. We will adjust the stop loss to $72.95.

Earlier Comments:
LULU could see a short squeeze that lifts it toward $80.00. The most recent data listed short interest at 20% of the 101 million share float. FYI: The Point & Figure chart for LULU is bullish with an $88 target.

- Suggested Positions -

Long 2013 Jan $75 call (LULU1319a75) entry $3.30

12/17/12 new stop loss @ 72.95, adjust exit to $79.85

Entry on December 12 at $74.25
Average Daily Volume = 2.1 million
Listed on December 11, 2012


Netflix, Inc. - NFLX - close: 94.70 change: +1.40

Stop Loss: 89.45
Target(s): 99.75
Current Option Gain/Loss: + 4.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/17/12: The rally in NFLX continues. Today the stock got a boost thanks to some bullish analyst comments. We are aiming for $99.75 because the $100.00 mark is most likely round-number resistance. More aggressive traders could aim higher.

Earlier Comments:
NFLX can be a volatile stock so I do consider this a more aggressive, higher-risk trade and we will want to keep our position size small. Target is $99.75.

- Suggested Positions - *Small Positions*

Long 2013 Jan $100 call (NFLX1319a100) entry $3.88

Entry on December 14 at $92.67
Average Daily Volume = 1.1 million
Listed on December 13, 2012


Precision Castparts - PCP - close: 186.50 change: +2.30

Stop Loss: 183.40
Target(s): 188.00
Current Option Gain/Loss: +29.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/17/12: PCP participated in the market's broad-based rally today and shares pushed up through resistance near $185.00. Currently we are aiming for $188.00 but more conservative traders may want to exit immediately to book a gain. We only have four days left on our December calls. I am raising our stop loss to $183.40.

- Suggested *Small* Positions -

Long DEC $185 call (PCP1222L185) Entry $1.85

12/17/12 new stop loss @ 183.40
12/05/12 new stop loss @ 179.75

Entry on November 29 at $182.04
Average Daily Volume = 762 thousand
Listed on November 28, 2012


Rockwell Automation - ROK - close: 82.59 change: +0.34

Stop Loss: 79.85
Target(s): 84.75
Current Option Gain/Loss: + 5.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
12/17/12: ROK spent most of the day consolidating sideways near the $82 level before finally pushing higher late in the session. I don't see any changes from my prior comments. I am not suggesting new positions at current levels. We will raise our stop loss to $79.85.

- Suggested Positions -

Long 2013 Jan $85 call (ROK1319a85) entry $1.00*

12/17/12 new stop loss @ 79.85
*option entry price is an estimate since the option did not trade at the time our play was closed.

Entry on December 10 at $80.60
Average Daily Volume = 1.0 million
Listed on December 05, 2012


PUT Play Updates

Target Corp. - TGT - close: 61.09 change: +0.59

Stop Loss: 61.35
Target(s): 57.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
12/17/12: TGT briefly broke down below technical support at its simple 200-dma and exponential 200-dma but quickly reversed course and followed the market higher. The low today was $60.14. The larger trend still looks weak.

I am suggesting a trigger to buy puts at $59.75 to catch a breakdown. If triggered our short-term target is only $57.00. More aggressive traders could aim lower.

Trigger @ 59.75

- Suggested Positions -

buy the 2013 Jan $60 PUT (TGT1319m60)

Entry on December xx at $ xx.xx
Average Daily Volume = 5.0 million
Listed on December 15, 2012


Tiffany & Co - TIF - close: 58.83 change: +0.74

Stop Loss: 60.05
Target(s): 52.50
Current Option Gain/Loss: -39.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/17/12: Our bearish play on TIF could be in trouble. Last week's sideways consolidation under the $58 level is starting to look like a potential short-term bottom. Today the stock rallied to and stopped at its 150-dma. More conservative traders may want to lower their stops. We're keeping our stop at $60.05 for now. I am not suggesting new positions.

NOTE: TIF will begin trading ex-dividend on Dec. 18th. The dividend will be 32 cents.

Our target is $52.50. Although I want to caution you that the $55.00 level is potential support. The Point & Figure chart for TIF is bearish with a $51 target.

- Suggested Positions -

long Jan $55 PUT (TIF1319m55) entry $1.15

Entry on December 10 at $57.75
Average Daily Volume = 2.3 million
Listed on December 08, 2012


CLOSED BULLISH PLAYS

Dover Corp - DOV - close: 64.25 change: +0.40

Stop Loss: 62.75
Target(s): 67.50
Current Option Gain/Loss: + 4.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
12/17/12: DOV has been churning sideways for almost five weeks and over the weekend we decided to close positions. The plan was to exit at the open on Monday morning. DOV opened at $63.91.

- Suggested Positions -

Long 2013 Mar $65 call (DOV1316c65) entry $2.10 exit $2.20 (+4.7%)

12/17/12 closed this morning
12/15/12 prepare to exit on Monday morning
12/11/12 new stop loss @ 62.75
11/28/12 new stop loss @ 61.75
11/19/12 triggered @ 62.30

chart:

Entry on November 19 at $62.30
Average Daily Volume = 1.7 million
Listed on November 17, 2012