Editor's Note:

The stock market produced a very broad-based rally on news of a fiscal cliff deal in Washington.

Both FLS and the IWM exceeded our exit targets with a gap higher. AKAM was triggered. LNKD and TIF were stopped out.

Current Portfolio:


CALL Play Updates

Akamai Tech. - AKAM - close: 40.40 change: -0.63

Stop Loss: 39.95
Target(s): 44.90
Current Option Gain/Loss: - 15.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/02/13: The market's big rally today produced a gap open higher for AKAM. Shares opened at $41.86 and quickly hit our entry trigger at $42.05. Our trade is open. I want to warn you that AKAM could fill the gap with a dip back toward $41.00. Oour target is $44.90. More aggressive traders could aim higher. FYI: The Point & Figure chart for AKAM is bullish with a $54 target.

- Suggested Positions -

Long 2013 Jan $45 call (AKAM1319a45) entry $0.20

Entry on January 02 at $42.05
Average Daily Volume = 3.1 million
Listed on December 22, 2012


Canadian Pacific Railway - CP - close: 105.60 change: +3.98

Stop Loss: 101.75
Target(s): 109.00
Current Option Gain/Loss: + 68.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/02/13: CP gapped open higher at a new high and surged to $106.96 intraday. The stock settled with a +3.9% gain. We are raising our stop loss to $101.75.

Our plan was to use small positions to limit our risk.

- Suggested *SMALL* Positions -

Long Jan $105 call (CP1319a105) entry $1.25

01/02/13 new stop loss @ 101.75
12/21/12 trade opened on gap down at $101.46

Entry on December 21 at $101.46
Average Daily Volume = 961 thousand
Listed on December 20, 2012


Monsanto Co. - MON - close: 96.15 change: +1.88

Stop Loss: 92.45
Target(s): 99.50
Current Option Gain/Loss: +111.2%
Time Frame: exit prior to Jan 8th.
New Positions: see below

Comments:
01/02/13: MON is surging to new multi-year highs with today's +1.9% gain. I want to remind readers that we don't have much time left. We do not want to hold over the January 8th earnings report. I am not suggesting new positions. We will raise our stop loss to $92.45.

Our option is up over +110%. Readers may want to take profits now.

Earlier Comments:
Our plan was to keep our position size small.

*Small Positions*

- Suggested Positions -

Long 2013 Jan $95 call (MON1319a95) entry $1.25

01/02/13 new stop loss @ 92.45
12/24/12 triggered @ 93.05

Entry on December 24 at $93.05
Average Daily Volume = 2.2 million
Listed on December 19, 2012


iShares Silver ETF - SLV - close: 29.92 change: +0.55

Stop Loss: 27.45
Target(s): 33.50
Current Option Gain/Loss: + 32.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/02/13: Our SLV trade opened on Monday morning with the SLV at $29.07. Commodities surged today and the SLV gapped open higher near resistance at its 300-dma. Silver prices retreated from that morning high. Yet the SLV still managed a +1.8% gain.

You may want to use a tighter stop.

- Suggested Positions -

Long March $30 call (SLV1316c30) entry $0.95

Entry on December 31 at $29.07
Average Daily Volume = 11.6 million
Listed on December 29, 2012


Sohu.com - SOHU - close: 47.99 change: +0.65

Stop Loss: 43.45
Target(s): 49.25
Current Option Gain/Loss: +46.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/02/13: SOHU came super close to hitting our exit target today. Shares spiked higher to hit $49.70 before paring its gains. Our exit target was $49.75. I am worried that today looks like a failed rally at resistance near $50.00. Readers may want to go ahead and take profits now. I am reducing our exit target down to $49.25 on hopes of catching the next rally attempt.

Earlier Comments:
SOHU can be a volatile stock so we want to limit our position size to reduce our risk. If triggered our target is $49.75. More aggressive traders may want to aim higher since SOHU seems to have built a decent bottom over the last several months. With enough time you could aim for the $55-60 zone. FYI: The Point & Figure chart for SOHU is bullish with a $66 target.

- Suggested Positions -

Long Feb $47.50 call (SOHU1316b47.5) entry $2.05

01/02/13 adjust exit down to $49.25
SOHU almost hit our target at $49.75 but the high today was only $49.70. We don't want that to happen again.
12/29/12 new stop loss @ 43.45

Entry on December 27 at $45.20
Average Daily Volume = 606 thousand
Listed on December 26, 2012


PUT Play Updates

Range Resources - RRC - close: 62.05 change: -0.78

Stop Loss: 64.25
Target(s): 55.50
Current Option Gain/Loss: - 21.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/02/13: RRC continues to show relative weakness. The market's big rally higher today sparked a gap higher for RRC. Yet the rally quickly ran out of steam under the $64 level and its 200-dma. RRC posted a loss on the session (-1.2%).

FYI: RRC hit our entry trigger at $61.65 on Monday, Dec. 31st.

Earlier Comments:
Readers may want to keep their position size small. There has been rumors this past year that RRC might be a takeover candidate.

*Small Positions* - Suggested Positions -

Long Feb $60 PUT (RRC1316n60) Entry @ $2.41

Entry on December 31 at $61.65
Average Daily Volume = 1.5 million
Listed on December 29, 2012


CLOSED BULLISH PLAYS

Flowserve Corp. - FLS - close: 152.01 change: +5.21

Stop Loss: 141.85
Target(s): 148.50
Current Option Gain/Loss: +114.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/02/13: FLS has exceeded our exit target.

The market's big rally today produced a gap open higher in FLS. Shares gapped open at $150.10. Our exit target to take profits was $148.50 so our play was closed immediately.

The option opened at $6.20 but the spread has widened.

- Suggested Positions -

2013 Jan $145 call (FLS1319a145) Entry $2.70 exit $5.80 (+114.8%)

01/02/13 target exceeded on gap higher
12/20/12 new stop loss @ 141.85
12/18/12 new stop loss @ 139.95

chart:

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


Green Mountain Coffee Roasters - GMCR - close: 43.49 change: +2.15

Stop Loss: 39.70
Target(s): 47.50
Current Option Gain/Loss: -66.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/02/13: It's amazing how things can turnaround in just a couple of days. Today GMCR is breaking out to new relative highs thanks to the huge market rally today. Yet on Friday GMCR was breaking lower. On Monday, before New Year's, we saw GMCR hit our stop loss at $39.70, closing our play.

Earlier Comments:
GMCR can be a very volatile stock. I do consider this a more aggressive, higher-risk trade. Let's keep our position size small to limit our risk.

(small positions) - Suggested Positions -

Long 2013 Jan $45 call (GMCR1319a45) entry $1.18 exit $0.40 (-66.1%)

12/31/12 trade stopped out at $39.70
12/29/12 new stop loss @ 39.70

chart:

Entry on December 19 at $41.35
Average Daily Volume = 8.3 million
Listed on December 18, 2012


iShares Russell 2000 - IWM - close: 86.80 change: +2.48

Stop Loss: 81.95
Target(s): 86.00
Current Option Gain/Loss: +123.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/02/13: The small cap index and ETF continue to perform very well. The $RUT index has broken through its 2012 highs to hit new all-time highs. This morning saw the IWM gap open higher at $86.34. Our exit target was $86.00 so the trade was closed immediately.

- Suggested Positions -

2013 Jan $84 call (IWM1319a84) entry $1.17 exit $2.63 (+123.9%)

01/02/13 target exceeded on gap open higher
12/29/12 the IWM is starting to look bearish!
12/18/12 new stop loss @ 81.95
12/11/12 triggered on the gap open higher at $83.11 (trigger was 82.85)

chart:

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


Linkedin Corp. - LNKD - close: 112.65 change: -2.17

Stop Loss: 111.40
Target(s): 119.00
Current Option Gain/Loss: -51.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/02/13: LNKD was a notable loser today. Shares opened higher at $115.71 and then plunged toward support near $110 and its 100-dma. The sell-off was due to an analyst downgrade. Our stop loss was hit at $111.40. Over the weekend I suggested that more aggressive traders place their stop loss under the $110 level.

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

*Small Positions* - Suggested Positions -

Jan $115 call (LNKD1319a115) Entry $3.10 exit $1.50 (-51.6%)

01/02/13 stopped out
12/18/12 new stop loss @ 111.40
12/17/12 adjust exit target to $119.00
12/15/12 new stop loss @ $109.00

chart:

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



CLOSED BEARISH PLAYS

Tiffany & Co - TIF - close: 58.93 change: +1.59

Stop Loss: 58.75
Target(s): 52.00
Current Option Gain/Loss: -53.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/02/13: The market's big rally on Wednesday fueled a sharp rise in TIF. The stock hit our stop loss at $58.75. The overall trend remains bearish. Readers may want to keep TIF on their watch list.

- Suggested Positions -

2013Jan $55 PUT (TIF1319m55) entry $1.08 exit $0.50 (-53.7%)

01/02/13 stopped out at $58.75

chart:

Entry on December 27 at $56.67
Average Daily Volume = 2.4 million
Listed on December 26, 2012