Editor's Note:

Was yesterday's fiscal-cliff deal rally just a one-day wonder? Where is the follow through? Traders should be careful here.

Current Portfolio:


CALL Play Updates

Akamai Tech. - AKAM - close: 40.95 change: -1.21

Stop Loss: 39.95
Target(s): 44.90
Current Option Gain/Loss: - 75.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/03/13: AKAM is losing altitude after yesterday's deal-induced pop. Shares should find support at $40.00. Nimble traders could buy calls on a dip or a bounce near $40.00.

our 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: 106.27 change: +0.67

Stop Loss: 101.75
Target(s): 109.00
Current Option Gain/Loss: + 96.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/03/13: CP continues to rally but shares seemed to lose momentum as they neared yesterday's high. I am not suggesting new positions at this time. More conservative traders may want to raise their stops again. Or readers could start taking profits now.

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: 95.34 change: -0.81

Stop Loss: 92.45
Target(s): 99.50
Current Option Gain/Loss: + 68.0%
Time Frame: exit prior to Jan 8th.
New Positions: see below

Comments:
01/03/13: MON hit some profit taking today. Readers may want to start taking profits now since 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.

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: 29.18 change: -0.74

Stop Loss: 27.45
Target(s): 33.50
Current Option Gain/Loss: - 5.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
01/03/13: The FOMC minutes had an effect on precious metal prices today. The minutes suggested that Fed members believe the Federal Reserve's QE programs could slow down in 2013. That was bullish for the dollar and the U.S. dollar produced a hefty rally today. The dollar rally helped push silver prices lower. The SLV has now filled the gap and is testing short-term support near $29.00. I would wait for a bounce before considering new bullish positions.

- 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


Snap-on Inc - SNA - close: 80.58 change: -0.28

Stop Loss: 78.90
Target(s): 84.50
Current Option Gain/Loss: - 31.2%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/03/13: SNA didn't see much follow through on yesterday's rally. The stock hovered around $81 most of the day and then began to fade lower. Readers can use another bounce off the $80.00 level as a new bullish entry point.

Earlier Comments:
I consider this a short-term trade. It will probably only last a few days. Our target is $84.50. I would use small positions!

- Suggested Positions - (Keep positions small)

Long Feb $85 call (SNA1316B85) entry $0.80

Entry on January 03 at $80.90
Average Daily Volume = 239 thousand
Listed on January 02, 2012


Sohu.com - SOHU - close: 47.75 change: -0.24

Stop Loss: 43.45
Target(s): 49.25
Current Option Gain/Loss: +39.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/03/13: Shares of SOHU didn't see much movement today. The stock hovered around the $48.00 level all day. I would expect a dip back toward $46.00 if the market declines tomorrow. I am not suggesting new positions.

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


Trimble Navigation - TRMB - close: 61.25 change: -0.27

Stop Loss: 59.75
Target(s): 64.75
Current Option Gain/Loss: - 32.3%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/03/13: TRMB rallied to another relative high near $62 and then pulled back. I would not be surprised to see the stock dip toward support near $60 if the market declines. I would still consider new positions now but more nimble traders may want to try and launch positions on a dip.

We are aiming for $64.75 but more aggressive traders could aim higher. We do want to keep our position size small to limit our risk.

- Suggested Positions - (Keep positions small)

Long Jan $60 call (TRMB1319a60) entry $2.25

Entry on January 03 at $61.32
Average Daily Volume = 750 thousand
Listed on January 02, 2012


PUT Play Updates

Range Resources - RRC - close: 63.40 change: +1.35

Stop Loss: 64.25
Target(s): 55.50
Current Option Gain/Loss: - 43.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/03/13: RRC is not cooperating with us. Neither oil prices or the energy sector really showed any strength today. Yet shares of RRC surged +2.1% and is now hovering just under resistance near $64.00. If there is any follow through tomorrow we could see RRC hit our stop loss.

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