Editor's Note:

The U.S. market continues to push higher with the Santa Claus rally in full swing.

AAP, HON, and RGR hit our entry triggers.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 110.28 change: +0.44

Stop Loss: 107.95
Target(s): 117.50
Current Option Gain/Loss: -10.2%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
12/24/13: We've been patiently waiting for AAP to push higher. Shares finally hit our suggested entry point at $110.65 today. The intraday high was $110.94. I would still consider new positions now. More conservative traders could wait for a rally past $111.00 as an alternative entry point.

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.

- Suggested Positions -

Long Mar $115 call (AAP1422c110) entry $3.90*

12/24/13 triggered @ 110.65
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/21/13 adjust the option strike from the January $110 to the March $115 call

Entry on December 24 at $110.65
Average Daily Volume = 923 thousand
Listed on December 14, 2013


Aon Plc. - AON - close: 83.62 change: +0.94

Stop Loss: 81.30
Target(s): 84.85
Current Option Gain/Loss: +32.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/24/13: After a three-day churn sideways shares of AON finally bounced. The stock displayed some relative strength with a +1.1% gain today. 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: 81.68 change: -0.05

Stop Loss: 77.70
Target(s): 89.50
Current Option Gain/Loss: + 6.4%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
12/24/13: The last couple of days have been very quiet for CBI. Both sessions the stock essentially closed unchanged.

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


Honeywell Intl. - HON - close: 90.45 change: +0.73

Stop Loss: 87.90
Target(s): 94.75
Current Option Gain/Loss: + 5.7%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
12/24/13: HON shot higher this morning and closed at a new high, breaking out over resistance near $90.00. Our suggested entry point to buy calls was hit at $90.30. I would still consider new positions now at current levels.

Earlier Comments:
Our short-term target is $94.75. More aggressive traders may want to aim for the $97-100 zone instead.

- Suggested Positions -

Long Mar $92.50 call (HON1422c92.5) entry $1.75*

12/24/13 triggered @ 90.30
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 24 at $90.30
Average Daily Volume = 2.4 million
Listed on December 23, 2013


Helmerich & Payne - HP - close: 83.03 change: +1.50

Stop Loss: 79.90
Target(s): 87.00
Current Option Gain/Loss: +13.8%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/24/13: Energy stock HP was showing relative strength with a +1.8% gain and a new all-time high. I am raising our stop loss to $79.90.

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
12/24/13 new stop loss @ 79.90

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


Russell 2000 ETF - IWM - close: 115.22 change: +0.44

Stop Loss: 114.45
Target(s): 115.75
Current Option Gain/Loss: +123.0%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/24/13: The IWM notched another record close today and closed above potential round-number resistance at the $115.00 level. We are raising our stop loss to $114.45. We're also setting our exit target at $115.75. More aggressive traders may want to aim higher. The January effect is normally bullish for small cap stocks. However, the IWM is nearing its trend line of higher highs.

- Suggested Positions -

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

12/24/13 new stop loss @ 114.45, set the exit target @ 115.75
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: 146.14 change: +1.08

Stop Loss: 141.75
Target(s): 149.00
Current Option Gain/Loss: +58.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/24/13: LMT continues to deliver for the bulls. The stock added +0.74% and marked another new record high. I am raising our stop loss up to $141.75. 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

12/24/13 new stop loss @ 141.75
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: 92.14 change: -0.04

Stop Loss: 88.90
Target(s): 98.50
Current Option Gain/Loss: + 6.8%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
12/24/13: Upward momentum in OTEX stalled today. Shares peaked near yesterday's high. I would not be surprised to see OTEX dip back toward the $91-90 zone.

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: 142.96 change: -0.25

Stop Loss: 138.90
Target(s): 149.00
Current Option Gain/Loss: - 4.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/24/13: The rally in PII also took the day off. Shares churned sideways and closed virtually unchanged. I don't see any changes from my prior comments.

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


Sturm, Ruger & Co. Inc. - RGR - close: 73.82 change: +0.16

Stop Loss: 71.75
Target(s): 79.50
Current Option Gain/Loss: -17.5%
Time Frame: 6 weeks
New Positions: see below

Comments:
12/24/13: RGR spiked higher this morning and briefly traded above resistance at the $74.00 level. Our suggested entry point was hit at $74.25. The high today was $74.33. RGR pared its gains by the close. If you are looking for a new entry point I would consider waiting for a rally past $74.35.

Earlier Comments:
Currently RGR is hovering below short-term resistance near $74.00. A breakout here could spark a short squeeze. The most recent data listed short interest at 32% of the very small 18.8 million share float.

- Suggested Positions -

Long Apr $75 call (RGR1419D75) entry $4.00

12/24/13 triggered @ 74.25

Entry on December 24 at $74.25
Average Daily Volume = 294 thousand
Listed on December 23, 2013


Tiffany & Co - TIF - close: 91.03 change: +0.53

Stop Loss: 88.45
Target(s): 98.50
Current Option Gain/Loss: -17.6%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
12/24/13: TIF continued to bounce today with a +0.5% gain. Yet the stock continues to trade under resistance near the $91.50 level. If you're looking for a new entry point consider waiting for a breakout past $91.50. Bear in mind that my enthusiasm for this trade has waned following the legal news yesterday (TIF losing to Swatch in a Dutch court) although the stock doesn't seem to be affected by the news.

- 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: 76.08 change: +0.13

Stop Loss: 73.75
Target(s): 79.75
Current Option Gain/Loss: + 4.6%
Time Frame: EXIT PRIOR to January expiration
New Positions: see below

Comments:
12/24/13: Traders bought the dip in TSCO at $75.35 this morning, which is what we expected. Yesterday I suggested buying a dip in the $75.00-75.50 zone.

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: 104.46 change: +0.50

Stop Loss: 101.90
Target(s): 108.00
Current Option Gain/Loss: + 3.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/24/13: UPS displayed some relative strength with a +0.48% gain. The stock closed near its high for the day, which is normally a good sign for the next morning. Tonight we're adjusting or stop loss to $101.90.

It's take a long time but our option trade is finally in positive territory.

- Suggested Positions -

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

12/24/13 new stop loss @ 101.90
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: 72.71 change: +0.22

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:
12/24/13: Thankfully shares of WYN did not see any follow through lower on yesterday's slightly bearish candlestick. I am still suggesting that readers wait for a new rally past $73.25 before initiating new 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: 46.50 change: +0.86

Stop Loss: 47.60
Target(s): 40.15
Current Option Gain/Loss: -54.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/24/13: Our SHLD put play is not working for us. Downward momentum has stalled and shares appear to be reversing with an oversold bounce (up three out of the last four days). More conservative traders will want to seriously consider an early exit now. I am lowering our stop loss down to $47.60.

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

12/24/13 new stop loss @ 47.60, more conservative traders may want to just exit early.
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