Editor's Note:

The U.S. market continues to rally with another round of new record highs. There are only three trading days left for 2013.

The small cap Russell 2000 ETF (IWM) and Lockheed Martin (LMT) both hit our bullish exit targets today.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 110.17 change: -0.11

Stop Loss: 107.95
Target(s): 117.50
Current Option Gain/Loss: -15.3%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
12/26/13: AAP spent the day after Christmas churning sideways. I don't see any changes from my prior comments. 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: 83.47 change: -0.15

Stop Loss: 81.30
Target(s): 84.85
Current Option Gain/Loss: +23.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/26/13: AON bounced off its morning lows near $83.00 but failed to breakout past short-term resistance near $84.00. 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: 82.03 change: +0.35

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:
12/26/13: CBI spent today's session churning sideways on either side of the $82.00 level.

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: 91.10 change: +0.65

Stop Loss: 87.90
Target(s): 94.75
Current Option Gain/Loss: +20.5%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
12/26/13: HON continues to show a little relative strength with shares outpacing the broader market thanks to a +0.7% gain on Thursday. This is another new high. At this point traders may want to wait for a new dip near $90.00 if you're looking for a new entry point.

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: 83.14 change: +0.11

Stop Loss: 79.90
Target(s): 87.00
Current Option Gain/Loss: +11.1%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/26/13: After Tuesday's big gain in HP the stock spent Thursday's session drifting sideways.

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



LyondellBasell Industries - LYB - close: 79.33 change: +0.16

Stop Loss: 77.75
Target(s): 85.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
12/26/13: LYB continued to inch higher on Thursday. There is no change from my Tuesday night new play comments.

I am suggesting a trigger to buy calls at $80.25. If triggered our short-term target is $85.00.

Trigger @ 80.25

- Suggested Positions -

Buy the Feb $80 call (LYB1422B80) current ask $2.50

Entry on December -- at $---.--
Average Daily Volume = 3.1 million
Listed on December 24, 2013


Open Text Corp. - OTEX - close: 91.52 change: -0.62

Stop Loss: 88.90
Target(s): 98.50
Current Option Gain/Loss: - 1.7%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
12/26/13: OTEX suffered some profit taking on Thursday. That's not too surprising. I pointed out on Tuesday that the upward momentum had temporarily stalled and that it would likely see a dip. Look for support near $90.00.

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: 144.23 change: +1.27

Stop Loss: 138.90
Target(s): 149.00
Current Option Gain/Loss: + 4.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/26/13: PII extended its gains with a +0.88% advance on Thursday. At the moment I would not launch new positions.

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: 73.61 change: -0.21

Stop Loss: 71.75
Target(s): 79.50
Current Option Gain/Loss: -15.0%
Time Frame: 6 weeks
New Positions: see below

Comments:
12/26/13: RGR is still consolidating sideways below short-term resistance near $74.00 and its simple 30-dma. 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: 90.97 change: -0.06

Stop Loss: 88.45
Target(s): 98.50
Current Option Gain/Loss: -21.3%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
12/26/13: TIF turned in another quiet holiday session with shares drifting sideways below resistance near $91.50. If you're looking for a new entry point consider waiting for a breakout past $91.50.

- Suggested Positions -

Long FEB $95 call (TIF1422b95) entry $2.15

12/26/13 TIF stock seems unaffected by the negative legal news from Monday
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: 76.12 change: +0.04

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:
12/26/13: The early morning gains in TSCO faded and shares closed virtually unchanged on the session. I would not be surprised to see TSCO retest the $75.00 level as support again.

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: 104.67 change: +0.21

Stop Loss: 101.90
Target(s): 108.00
Current Option Gain/Loss: + 8.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/26/13: UPS was making headlines on December 24th and the 25th. The company had so much business that its delivery system was actually overloaded. According to a company spokesperson a small number of packages were not delivered before Christmas.

On one hand it's terrible news for the clients and families that did not receive their bundles as expected. On the other hand it might suggest a very strong month of business for UPS (and its rival FedEx). Shares of UPS seemed unaffected by the news today. The stock notched another new record high.

- 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: 73.20 change: +0.49

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:
12/26/13: WYN continues to drift higher and today marks a new all-time closing high for the stock. I would be tempted to launch new positions here or you could wait for a rally above Monday's intraday high (73.48).

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: 46.94 change: +0.44

Stop Loss: 47.60
Target(s): 40.15
Current Option Gain/Loss: -62.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/26/13: SHLD is still not cooperating. The stock outperformed the broader market again with a +0.9% gain today. The intraday high was $47.20. Our stop loss is at $47.60. More conservative traders will want to seriously consider an early exit now.

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


CLOSED BULLISH PLAYS

Russell 2000 ETF - IWM - close: 115.23 change: +0.01

Stop Loss: 114.45
Target(s): 115.75
Current Option Gain/Loss: +133.1%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/26/13: Target hit!

IWM rallied to resistance and tagged its trend line of higher highs before paring its gains and closing virtually unchanged. Our exit target was hit at $115.75.

- Suggested Positions -

Long 2014 Jan $112 call (IWM1418a112) entry $1.78 exit $4.15 (+133.1%)

12/26/13 target hit at $115.75
12/24/13 new stop loss @ 114.45, set the exit target @ 115.75
12/23/13 new stop loss @ 111.75

chart:

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


Lockheed Martin - LMT - close: 148.84 change: +2.70

Stop Loss: 141.75
Target(s): 149.00
Current Option Gain/Loss: +104.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/26/13: Target achieved.

Defense-related names were showing relative strength on Thursday. LMT was leading the charge higher with a +1.84% gain. Our exit target was hit at $149.00.

- Suggested Positions -

Mar $145 call (LMT1422C145) entry $3.35 exit $6.84 (+104.1%)

12/26/13 target hit
12/24/13 new stop loss @ 141.75
12/21/13 new stop loss @ 139.75

chart:

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