Editor's Note:

The fiscal-cliff deal inspired rally continued for many stocks on Friday. There were some exceptions. With the major market indices hitting new relative highs, the path of least resistance seems to be higher.

AKAM and RRC were stopped out. We want to exit our MON trade on Monday at the close.


Current Portfolio:


CALL Play Updates

Canadian Pacific Railway - CP - close: 107.32 change: +1.05

Stop Loss: 103.75
Target(s): 109.00
Current Option Gain/Loss: +136.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/05/13: Shares of CP are up four days in a row and hitting new highs. Our option is up +136%. Readers may want to start taking profits now. I am raising our stop loss to $103.75.

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

- Suggested *SMALL* Positions -

Long Jan $105 call (CP1319a105) entry $1.25

01/05/13 new stop loss @ 103.75
01/02/13 new stop loss @ 101.75
12/21/12 trade opened on gap down at $101.46

chart:

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


Monsanto Co. - MON - close: 96.11 change: +0.77

Stop Loss: 94.40
Target(s): 99.50
Current Option Gain/Loss: + 91.2%
Time Frame: exit prior to Jan 8th.
New Positions: see below

Comments:
01/05/13: MON rallied to new multi-year highs this past week. The company is due to report earnings on Tuesday morning and we do not want to hold over the announcement. We are planning to exit positions on Monday afternoon at the closing bell. More conservative traders may want to exit on Monday morning instead. Our option is up +91%. I am raising our stop loss to $94.40.

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

*Small Positions*

- Suggested Positions -

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

01/05/13 prepare to exit on Monday at the close, new stop loss @ 94.40
01/02/13 new stop loss @ 92.45
12/24/12 triggered @ 93.05

chart:

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


OpenTable, Inc. - OPEN - close: 53.10 change: +0.89

Stop Loss: 49.40
Target(s): 58.00
Current Option Gain/Loss: + 4.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/05/13: Our new trade on OPEN is off to a good start. Shares continued to rally and are now up three days in a row. The stock's breakout past resistance at $50.00 is bullish and OPEN is hitting new multi-month highs. If you don't feel like chasing it here you could wait for a potential dip back into the $52-51 zone as your entry point.

Earlier Comments:
OPEN could see a short squeeze. The most recent data listed short interest at 42% of the very small 19.4 million share float. FYI: The Point & Figure chart for OPEN is bullish with a $73 target.

- Suggested Positions -

Long Feb $55 call (OPEN1316B55) entry $2.54

chart:

Entry on January 04 at $52.23
Average Daily Volume = 361 thousand
Listed on January 03, 2012


iShares Silver ETF - SLV - close: 29.24 change: +0.06

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:
01/05/13: The SLV continued to dip and fell just low enough to hit a new four-month low before bouncing. If the SLV bounces from here it could be a bullish double bottom (looking at the December low). Readers might want to wait for a new close above $29.50 or even $30.00 before considering new bullish positions. More cautious traders might want to raise their stop loss.

- Suggested Positions -

Long March $30 call (SLV1316c30) entry $0.95

chart:

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


Snap-on Inc - SNA - close: 79.97 change: -0.61

Stop Loss: 78.90
Target(s): 84.50
Current Option Gain/Loss: - 43.7%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/05/13: The relative weakness in SNA on Friday is definitely disappointing. With the market on the rise we should have been seeing SNA push past the $81.00 level. Instead the stock is flirting with a breakdown back below $80.00, which should be support. Maybe SNA just needs to fill the gap with a dip to $79.00 before it moves higher. On a short-term basis I would want to see a close above $80.50 before considering new bullish positions.

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

chart:

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


Sohu.com - SOHU - close: 47.90 change: +0.15

Stop Loss: 45.75
Target(s): 49.25
Current Option Gain/Loss: +36.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
01/05/13: Traders bought the dip in SOHU on Friday. The stock is still arguably overbought here with a significant four-week gain. Readers may want to take profits early now. I am not suggesting new positions.

We are raising the stop loss to $45.75.

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

01/05/13 new stop loss @ 45.75
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

chart:

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


Trimble Navigation - TRMB - close: 61.94 change: +0.69

Stop Loss: 59.75
Target(s): 64.75
Current Option Gain/Loss: + 0.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
01/05/13: TRMB continued to rally on Friday and hit another new all-time high. Broken resistance at $60.00 should be new support so if you don't feel like chasing TRMB here then consider waiting for a pullback.

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

chart:

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


PUT Play Updates


Currently we do not have any active put trades.



CLOSED BULLISH PLAYS

Akamai Tech. - AKAM - close: 40.43 change: -0.52

Stop Loss: 39.95
Target(s): 44.90
Current Option Gain/Loss: - 85.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/05/13: The stock market was up big this past week on the fiscal cliff deal. AKAM popped on Wednesday but shares retreated back to support instead of holding on to gains. This relative weakness is a concern when most of the market is breaking out to new relative highs.

AKAM relative weakness was very evident on Friday with a -1.2% decline. Shares managed to slip just below support at $40.00 and hit our stop loss at $39.95 intraday. Our trade is closed.

- Suggested Positions -

2013 Jan $45 call (AKAM1319a45) entry $0.20 exit $0.03 (-85%)

01/04/13 stopped out at $39.95

chart:

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


CLOSED BEARISH PLAYS

Range Resources - RRC - close: 65.14 change: +1.74

Stop Loss: 64.25
Target(s): 55.50
Current Option Gain/Loss: - 56.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/05/13: Energy names were big winners on Friday and shares of RRC rallied past resistance near $64.00. The stock pushed up through several key moving averages and a trend of lower highs. Our stop loss was hit at $64.25.

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 -

Feb $60 PUT (RRC1316n60) Entry @ $2.41 exit $1.05 (-56.4%)

01/04/13 stopped out at $64.25.

chart:

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