Editor's Note:

Traders bought the dip yet again and stocks rebounded off their midday lows.

Our SHPG trade was stopped out. NILE was triggered.


Current Portfolio:


CALL Play Updates

Check Point Software Tech. - CHKP - close: 50.79 change: -0.26

Stop Loss: 49.40
Target(s): 54.50
Current Option Gain/Loss: - 2.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/07/13: CHKP is churning sideways inside the $50-52 zone. I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/06/13 new stop loss @ 49.40

Entry on February 01 at $50.25
Average Daily Volume = 2.7 million
Listed on January 31, 2012


The Cooper Companies - COO - close: 102.87 change: -0.16

Stop Loss: 99.90
Target(s): 107.50
Current Option Gain/Loss: -14.8%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/07/13: There was no follow through on yesterday's breakout rally in COO. Yet the stock did not see much profit taking either in today's sideways trading. I would still consider new positions now.

Earlier Comments:
Please note that we do want to keep our position size small because the option spreads are a little bit wide. COO is scheduled to report earnings on March 7th. We do not want to hold over the report. FYI: The Point & Figure chart for COO is bullish with a $125 target.

*Small Positions* - Suggested Positions -

Long Mar $105 call (COO1316c105) entry $2.70

Entry on February 06 at $102.60
Average Daily Volume = 303 thousand
Listed on February 02, 2012


3M Company - MMM - close: 102.22 change: -0.47

Stop Loss: 100.70
Target(s): 106.50
Current Option Gain/Loss: - 5.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/07/13: MMM hit a little profit taking today after yesterday's breakout past resistance at $102.00. Fortunately, traders bought the dip midday. If both the S&P 500 and MMM open positive tomorrow I would still open bullish positions here.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk.

- Suggested Positions -

long Mar $100 call (MMM1316c100) entry $2.95

Entry on February 06 at $102.25
Average Daily Volume = 3.0 million
Listed on February 05, 2012


Rock-Tenn Company - RKT - close: 81.17 change: -0.23

Stop Loss: 79.45
Target(s): 84.85
Current Option Gain/Loss: -11.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/07/13: Traders bought the dip at round-number support at $80.00 midday. Readers can use today's intraday bounce as a new bullish entry point.

FYI: The Point & Figure chart for RKT is bullish with a long-term $117 target.

- Suggested Positions -

Long Mar $80 call (RKT1316c80) entry $3.05

Entry on February 06 at $81.05
Average Daily Volume = 743 thousand
Listed on February 02, 2012


Starbucks Corp. - SBUX - close: 55.86 change: -0.19

Stop Loss: 54.75
Target(s): 59.85
Current Option Gain/Loss: - 21.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/07/13: I have been warning readers to expect a dip toward $55.00. SBUX slipped to $55.15 this morning before paring its losses. I am not suggesting new positions at this time.

Earlier Comments:
Our target is $59.85. More aggressive traders could aim for the all-time highs in the $62 area set last year. FYI: The Point & Figure chart for SBUX is bullish with a long-term $67 target.

- Suggested Positions -

Long Mar $55 call (SBUX1316c55) entry $2.51

Entry on February 01 at $56.57
Average Daily Volume = 6.8 million
Listed on January 30, 2012


SPX Corp. - SPW - close: 75.08 change: -0.14

Stop Loss: 73.95
Target(s): 78.00
Current Option Gain/Loss: +30.7%
Time Frame: Exit prior to earnings on Feb. 14th
New Positions: see below

Comments:
02/07/13: SPW continues to hover near the $75.00 level. Readers may want to raise their stop loss so it's closer to the simple 10-dma. I am not suggesting new positions.

- Suggested Positions -

Long Feb $75 call (SPW1316B75) entry $1.30

02/06/13 new stop loss @ 73.95
01/30/13 new stop loss @ 73.75
01/29/13 new stop loss @ 71.95, adjust exit to $78.00
readers may want to just take profits right now
01/28/13 new stop loss @ 71.40

Entry on January 23 at $72.42
Average Daily Volume = 832 thousand
Listed on January 22, 2012


Zimmer Holdings - ZMH - close: 75.06 change: -0.05

Stop Loss: 72.90
Target(s): 79.50
Current Option Gain/Loss: - 6.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/07/13: ZMH saw some profit taking this morning but traders bought the dip twice near $74.25 midday. I would use the afternoon bounce as a new bullish entry point to buy calls.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk. FYI: The Point & Figure chart for ZMH is bullish with a long-term $89 target.

- Suggested Positions - *small positions*

Long Mar $75 call (ZMH1316c75) entry $1.60

Entry on February 07 at $75.24
Average Daily Volume = 1.2 million
Listed on February 06, 2012


PUT Play Updates

SourceFire, Inc. - FIRE - close: 39.99 change: -1.03

Stop Loss: 41.55
Target(s): 35.25
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Feb. 21
New Positions: Yes, see below

Comments:
02/07/13: As we expected shares of FIRE have continued to sink towards support near $40.00 and its late January low. The low today was $39.50. We have a trigger to buy puts at $39.40. We want to keep our position size small to limit our risk. We do not want to hold over the earnings report on Feb. 21st.

Trigger @ 39.40 *Small Positions*

- Suggested Positions -

buy the Mar $35 PUT (FIRE1316o35)

Entry on February -- at $---.--
Average Daily Volume = 890 thousand
Listed on February 05, 2012


Blue Nile Inc. - NILE - close: 31.52 change: -0.68

Stop Loss: 33.25
Target(s): 26.25
Current Option Gain/Loss: -10.8%
Time Frame: To be determined (see below)
New Positions: see below

Comments:
02/07/13: NILE has continued to underpeform the market. Shares fell to a new relative low today and hit our trigger to open bearish positions at $31.45. I would still consider new positions now at current levels.

Earlier Comments:
We want to keep our position size small to limit our risk. I am concerned that the $30.00 level might be potential round-number support. Plus there is the issue of NILE's earnings report. Normally we avoid holding over an earnings report. I'm tempted to hold over NILE's because retail sales in December for the economy were not as strong as many had expected. This may help explain some of NILE's recent weakness. NILE is scheduled to report earnings on Feb. 12th, after the closing bell. For now, we'll plan on exiting prior to the report but we may adjust our strategy when we get closer to NILE's announcement on the 12th.

*Small Positions* - Suggested Positions -

Long Mar $30 PUT (NILE1316o30) entry $1.85

Entry on February 07 at $31.45
Average Daily Volume = 319 thousand
Listed on February 06, 2012


CLOSED BULLISH PLAYS

Shire Plc - SHPG - close: 100.79 change: +0.47

Stop Loss: 99.75
Target(s): 104.90
Current Option Gain/Loss: -78.9%
Time Frame: Exit prior to earnings on Feb. 14th
New Positions: see below

Comments:
02/07/13: SHPG gapped down at the open to $99.88 and quickly hit our stop loss at $99.75. Shares bounced at $99.10 and rebounded back toward the $100 level.

- Suggested Positions -

Feb $105 call (SHPG1316b105) entry $0.95* exit $0.20 (-78.9%)

02/07/13 stopped out
*02/01/13 entry point on the option is an estimate. there was not a lot of volume during today's session.

chart:

Entry on February 01 at $101.15
Average Daily Volume = 323 thousand
Listed on January 29, 2012