Editor's Note:

The U.S. market continues to push higher. A lot of stocks gapped open higher this morning.

DDD and ILMN hit our bullish exit targets.
PII, TSCO, and WYN hit our entry triggers.
KORS hit our stop loss.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 109.84 change: +0.48

Stop Loss: 107.95
Target(s): 117.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings in February
New Positions: Yes, see below

Comments:
12/23/13: AAP posted another bounce but is still struggling with resistance near the $110 level. There is no change from my prior comments.

We will keep our suggested entry point to launch positions at $110.65.

Earlier Comments:
If triggered our short-term target is $117.50. Longer-term traders may want to aim higher since the Point & Figure chart for AAP is bullish with a $140 target.

Trigger @ 110.65

- Suggested Positions -

buy the Mar $115 call (AAP1422c110) current ask $3.70

12/21/13 adjust the option strike from the January $110 to the March $115 call

Entry on December -- at $---.--
Average Daily Volume = 923 thousand
Listed on December 14, 2013


Aon Plc. - AON - close: 82.68 change: -0.26

Stop Loss: 81.30
Target(s): 84.85
Current Option Gain/Loss: + 2.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/23/13: Monday was a disappointing session for AON. The stock shot lower this morning and struggled to trim its losses by the closing bell. More conservative traders may want to exit early now. I am not suggesting new positions.

- Suggested Positions -

Long 2014 Jan $82.50 call (AON1418a82.5) entry $1.70

12/18/13 new stop loss @ 81.30, adjust exit target to $84.85
12/17/13 new stop loss @ 80.90
12/07/13 new stop loss @ 80.75
11/23/13 new stop loss @ 79.85
11/18/13 new stop loss @ 79.45
11/13/13 new stop loss @ 78.75

Entry on November 08 at $80.50
Average Daily Volume = 2.3 million
Listed on November 06, 2013


Chicago Bridge & Iron - CBI - close: 81.73 change: +0.04

Stop Loss: 77.70
Target(s): 89.50
Current Option Gain/Loss: + 9.6%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
12/23/13: The recent relative strength in CBI seemed to stall on Monday. Shares almost closed in negative territory.

If you're looking for a new entry point consider waiting for a dip closer to $80.00, which should be new support.

Earlier Comments:
Our target is $89.50. We want to exit prior to CBI's earnings report in February.

- Suggested Positions -

Long April $85 call (CBI1419D85) entry $3.10

Entry on December 19 at $80.35
Average Daily Volume = 1.5 million
Listed on December 18, 2013


Helmerich & Payne - HP - close: 81.53 change: -0.50

Stop Loss: 79.40
Target(s): 87.00
Current Option Gain/Loss: -22.2%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/23/13: HP tagged a new high this morning and reversed. Technically today's session is a bearish engulfing candlestick reversal pattern. I would not be surprised to see shares dip toward their simple 10-dma near $80.60.

Our short-term target is $87.00 but we will plan to exit prior to January option expiration.

- Suggested Positions -

Long Jan $82.50 call (HP1418a82.5) entry $1.80

Entry on December 19 at $81.75
Average Daily Volume = 1.0 million
Listed on December 18, 2013


Russell 2000 ETF - IWM - close: 114.78 change: +1.29

Stop Loss: 111.75
Target(s): TBD
Current Option Gain/Loss: +93.2%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/23/13: The rally in the small cap ETF continued on Monday with the IWM gaining +1.1%. More importantly the IWM has broken out above its prior high near $114.00. We have designated an exit target yet but I'm thinking the $116.00 level might work or possibly $117.00. Tonight we'll adjust the stop loss to $111.75.

The current bid/ask on our option is $3.44/3.54 (+93.2%).

- Suggested Positions -

Long 2014 Jan $112 call (IWM1418a112) entry $1.78

12/23/13 new stop loss @ 111.75

Entry on December 18 at $111.65
Average Daily Volume = 35 million
Listed on December 17, 2013



Lockheed Martin - LMT - close: 145.06 change: +0.85

Stop Loss: 139.75
Target(s): 149.00
Current Option Gain/Loss: +46.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/23/13: LMT continues to push higher and set a new record high today near $145.00. I am not suggesting new positions at this time.

Earlier Comments:
Our multi-week target is $149.00. Keep in mind that the $144-145 area is currently overhead resistance.

I'm listing the March calls. If you want to take a more short-term approach then the 2014 January calls are much cheaper.

- Suggested Positions -

Long Mar $145 call (LMT1422C145) entry $3.35

12/21/13 new stop loss @ 139.75

Entry on December 16 at $140.25
Average Daily Volume = 2.0 million
Listed on December 14, 2013


Open Text Corp. - OTEX - close: 92.18 change: +0.54

Stop Loss: 88.90
Target(s): 98.50
Current Option Gain/Loss: +10.3%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
12/23/13: OTEX gapped open higher this morning. Shares tagged the $93.00 level before paring its gains. I would not be surprised to see a dip back toward the $91.00 area. We are raising the stop loss to $88.90.

Our target is $87.90. FYI: The Point & Figure chart for OTEX is bullish with a $107 target.

- Suggested Positions -

Long FEB $95 call (OTEX1422b95) entry $2.90*
12/23/13 new stop loss @ 88.90
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 20 at $91.05
Average Daily Volume = 325 thousand
Listed on December 19, 2013


Polaris Industries, Inc. - PII - close: 143.21 change: +1.64

Stop Loss: 138.90
Target(s): 149.00
Current Option Gain/Loss: + 00.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/23/13: Our new play on PII has been triggered. The stock gapped open at $142.05 and outperformed the S&P 500 with a +1.1% gain. Our suggested entry point was hit at $142.25 this morning.

Earlier Comments:
Our multi-week target is $149.00. More aggressive traders could aim higher since the Point & Figure chart for PII is bullish with a $158 target.

- Suggested Positions -

Long Mar $150 call (PII1422c150) entry $4.48
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 23 at $142.25
Average Daily Volume = 457 thousand
Listed on December 21, 2013


Tiffany & Co - TIF - close: 90.50 change: -0.12

Stop Loss: 88.45
Target(s): 98.50
Current Option Gain/Loss: -23.7%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
12/23/13: TIF almost hit our stop loss this morning with a gap lower. Shares were weak as the market digested news that a Dutch court has ordered TIF to pay Swatch $449 million in damages for their failed partnership. The two companies set up a joint venture to market watches under the Tiffany brand but the business failed. TIF has cut its full-year outlook following the court's decision. TIF is a company with about $4 billion in revenue a year so the $449 million is significant. I am surprised the weakness in TIF wasn't worse today but the stock bounced almost back to unchanged.

I am not suggesting new positions and more conservative traders will want to seriously consider an early exit.

- Suggested Positions -

Long FEB $95 call (TIF1422b95) entry $2.15

12/23/13 TIF reacts to news that a Dutch court orders it to pay Swatch $449 million in damages.

Entry on December 18 at $91.25
Average Daily Volume = 1.25 million
Listed on December 16, 2013


Tractor Supply Co. - TSCO - close: 74.92 change: +0.85

Stop Loss: 73.75
Target(s): 79.75
Current Option Gain/Loss: + 0.0%
Time Frame: EXIT PRIOR to January expiration
New Positions: see below

Comments:
12/23/13: The bullish breakout in TSCO continued as we suspected. Unfortunately we did not expect shares to gap open higher at $77.00. Our suggested trigger was $75.60 but the gap open has triggered our play. The option gapped open at $2.15. Nimble traders may want to wait for a dip near the $75.50-75.00 zone again as a new entry point.

Earlier Comments:
Our short-term target is $79.75. More aggressive traders may want to aim higher since the Point & Figure chart just produced a new quadruple top breakout buy signal and is forecasting an $87 target.

I am listing the January calls. I'd rather play February options but TSCO doesn't have any Februarys or Marchs available yet and the bid/ask spread on the April options is getting a bit wide. That means we only have four weeks on these January calls.

- Suggested Positions -

Long Jan $75 call (TSCO1418a75) entry $2.15

12/23/13 triggered on gap higher at $77.00. Suggested trigger was $75.60

Entry on December 23 at $77.00
Average Daily Volume = 875 thousand
Listed on December 21, 2013


United Parcel Service - UPS - close: 103.96 change: +0.63

Stop Loss: 100.90
Target(s): 108.00
Current Option Gain/Loss: -12.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/23/13: UPS also gapped open higher on Monday morning. The stock ended the session with a +0.6% gain and a new all-time closing high.

- Suggested Positions -

Long 2014 Jan $105 call (UPS1418a105) entry $0.98

12/21/13 new stop loss @ 100.90
12/12/13 new stop loss @ 100.45
11/23/13 new stop loss @ 99.75
11/20/13 new stop loss @ 98.95

Entry on November 14 at $101.25
Average Daily Volume = 3.8 million
Listed on November 13, 2013


Wyndham Worldwide - WYN - close: 72.49 change: -0.48

Stop Loss: 71.75
Target(s): 78.50
Current Option Gain/Loss: -25.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/23/13: The trend of gapping open higher this morning also hit shares of WYN. The stock opened at $73.27. That was above our suggested entry point at $73.25 so our play was triggered immediately. Unfortunately the rally didn't last and WYN reversed lower to underperform the market with a -0.65% decline. I would wait for a new rally past $73.25 before initiating positions.

FYI: The Point & Figure chart for WYN is bullish with a $102 target.

- Suggested Positions -

Long Feb $75 call (WYN1422B75) entry $1.95*

12/23/13 triggered on gap open at $73.27. Suggested entry point was $73.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 23 at $73.27
Average Daily Volume = 1.1 million
Listed on December 21, 2013




PUT Play Updates

Sears Holdings - SHLD - close: 45.64 change: -0.30

Stop Loss: 48.60
Target(s): 40.15
Current Option Gain/Loss: -46.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/23/13: It looks like the oversold bounce in SHLD is losing steam. Shares bounced up to $47.20 this morning and then reversed. Today's relative weakness (-0.65%) is a good sign for the bears.

Earlier Comments:
Our short-term target is $40.15. Keep in mind that there are already a lot of bears in this stock. The most recent data listed short interest at 56% of the 50.7 million share float. That's plenty of fuel for a short squeeze if the stock can bounce. It's another reason to keep your position size small.

- Suggested Positions - *small positions*

Long 2014 Jan $39 PUT (SHLD1418m39) entry $1.66

12/16/13 new stop loss @ 48.60

Entry on December 12 at $46.18
Average Daily Volume = 1.5 million
Listed on December 11, 2013


CLOSED BULLISH PLAYS

3D Systems - DDD - close: 90.94 change: +4.52

Stop Loss: 79.90
Target(s): 89.00
Current Option Gain/Loss: +69.4%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/23/13: Target achieved.

Shares of DDD gapped open higher at $88.97 and then rallied past round-number resistance at $90.00 to close up +5.2% on the session. The move appears to be a reaction to its rival SSYS being upgraded this morning. Our exit target was hit at $89.00 early this morning.

Keep in mind that DDD shares can be volatile. I am suggesting we keep our position size small to limit our risk.

*small positions* - Suggested Positions -

Long Jan $85 call (DDD1418a85) entry $3.54 exit $6.00 (+ 69.4%)

12/23/13 target hit
12/21/13 new stop loss @ $79.90

chart:

Entry on December 17 at $82.05
Average Daily Volume = 5.7 million
Listed on December 14, 2013


Illumina Inc. - ILMN - close: 107.38 change: +2.46

Stop Loss: 99.45
Target(s): 109.00
Current Option Gain/Loss: +108.8%
Time Frame: Exit PRIOR to 2014 January option expiration
New Positions: see below

Comments:
12/23/13: Target achieved.

ILMN shot higher at the open and sprinted to $109.88 before failing at round-number resistance near $110.00. Our exit target was hit at $109.00. I couldn't find any specific news to account for this morning's rally.

- Suggested Positions -

2014 Jan $105 call (ILMN1418a105) entry $3.40 exit $7.10 (+108.8%)

12/23/13 target hit
12/16/13 new stop loss @ 99.45

chart:

Entry on December 11 at $102.00
Average Daily Volume = 931 thousand
Listed on December 09, 2013


Michael Kors - KORS - close: 80.80 change: -3.08

Stop Loss: 79.90
Target(s): 89.00
Current Option Gain/Loss: -67.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/23/13: Ouch! KORS was a distinct underperformer today with a -3.6% decline. The sell off appears to be a reaction to bearish analyst comments suggesting concern over KORS' sales. The stock spiked down to technical support at its 50-dma, just below the $80 level. Our stop loss was hit at $79.90.

- Suggested Positions -

2014 Jan $85 call (KORS1418a85) entry $1.85 exit $0.60 (-67.5%)

12/23/13 stopped out
12/14/13 new stop loss @ 79.90
12/07/13 new stop loss @ 78.49, readers may want to consider an early exit right here
11/22/13 trigger hit at $81.05
11/21/13 adjust entry strategy. Instead of buying a dip at $76.50, move the entry trigger to $81.05. Adjust the stop loss to $77.75. Adjust the option strike to 2014 Jan. $85 call.

chart:

Entry on November 22 at $81.05
Average Daily Volume = 7.2 million
Listed on November 20, 2013