Editor's Note:

Santa Claus did not disappoint Wall Street this year. The rally ended on a quiet note with the major indices inching lower on Friday.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 109.92 change: -0.25

Stop Loss: 107.95
Target(s): 117.50
Current Option Gain/Loss: -17.9%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
12/28/13: AAP saw an early morning rally on Friday and shares hit a new high near $112. Unfortunately gains faded by lunchtime. Shares settled near round-number support at $110 and technical support at the 10-dma. The intraday reversal lower is a bit troubling and more conservative traders may want to raise their stop loss. I am not suggesting new positions at this time.

Earlier Comments:
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

chart:

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


Aon Plc. - AON - close: 83.41 change: -0.06

Stop Loss: 81.90
Target(s): 84.85
Current Option Gain/Loss: +17.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/28/13: AON has spent the last couple of days churning sideways inside the $83-84 trading range. The $84.00 level is overhead resistance. Tonight we're raising our stop loss to $81.90. I am not suggesting new positions.

- Suggested Positions -

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

12/28/13 new stop loss @ 81.90
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

chart:

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


Chicago Bridge & Iron - CBI - close: 82.00 change: -0.03

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: + 3.2%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
12/28/13: CBI saw a little bit of volatility on Friday morning but traders bought the dip near $81.00. Shares bounced back to close almost unchanged on the session. This past week has revealed new overhead resistance at the $82.50 level. Momentum traders may want to wait for a breakout higher before initiating positions. Tonight we're moving the stop loss higher to $79.65.

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

12/28/13 new stop loss @ 79.65

chart:

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


Honeywell Intl. - HON - close: 91.14 change: +0.04

Stop Loss: 88.40
Target(s): 94.75
Current Option Gain/Loss: +22.2%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
12/28/13: HON just barely eked out a gain on Friday but Friday's four-cent gain now extends the current move to seven up days in a row. HON is short-term overbought and due for a dip. Traders may want to wait for a new dip near $90.00 if you're looking for a new entry point.

Tonight we're adjusting the stop loss to $88.40.

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*

12/28/13 new stop loss @ 88.40
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.

chart:

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


Helmerich & Payne - HP - close: 83.96 change: +0.82

Stop Loss: 79.90
Target(s): 87.00
Current Option Gain/Loss: +38.8%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
12/28/13: HP displayed relative strength again on Friday with a +0.98% gain and another new high. Investors may want to raise their stop loss again. I am not suggesting new positions at this time.

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

chart:

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



LyondellBasell Industries - LYB - close: 79.43 change: +0.10

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:
12/28/13: Friday ended up being a quiet session for LYB with shares drifting sideways in a narrow range. Shares are trading just below resistance in the $79.50-80.00 zone. We're waiting for a bullish breakout higher.

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

chart:

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


Open Text Corp. - OTEX - close: 91.20 change: -0.32

Stop Loss: 88.90
Target(s): 98.50
Current Option Gain/Loss: - 5.1%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
12/28/13: Hmm... OTEX continues to see mild profit taking. Shares slipped -0.3% on Friday but it was also its third down day in a row. I am expecting OTEX to find short-term support near its 10-dma (about 90.50) or the $90.00 level. At this point I would wait for a bounce from one of these levels before considering new bullish positions.

Our target is $98.50. 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.

chart:

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


Polaris Industries, Inc. - PII - close: 143.33 change: -0.90

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:
12/28/13: PII gave back most of Thursday's gains with a -0.6% decline. It looks like PII might have some very short-term support near $142.50. If this level fails then we'll likely see PII dip toward round-number support at $140.00. I am not suggesting new positions at the moment.

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.

chart:

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


Sturm, Ruger & Co. Inc. - RGR - close: 72.78 change: -0.83

Stop Loss: 71.75
Target(s): 79.50
Current Option Gain/Loss: -27.5%
Time Frame: 6 weeks
New Positions: see below

Comments:
12/28/13: RGR's performance this week has been disappointing. Shares continue to struggle with short-term technical resistance at the simple 30-dma. The stock might bounce near $72.00 or its 50-dma near $71.85 but that's awfully close to our stop loss at $71.75. I am not suggesting new positions at this time.

Earlier Comments:
A breakout past resistance near $74.00 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

chart:

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


Tiffany & Co - TIF - close: 90.87 change: -0.10

Stop Loss: 88.45
Target(s): 98.50
Current Option Gain/Loss: -25.5%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
12/28/13: TIF briefly traded above resistance near $91.50 but the rally didn't last. The stock gave back all of its gains to close negative on Friday. I am not suggesting new positions at this time.

- 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.

chart:

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


Tractor Supply Co. - TSCO - close: 75.54 change: -0.58

Stop Loss: 74.50
Target(s): 79.75
Current Option Gain/Loss: -16.2%
Time Frame: EXIT PRIOR to January expiration
New Positions: see below

Comments:
12/28/13: Bingo! I just cautioned readers that we could see TSCO retesting the $75.00 level as support. The stock dipped to $74.73 on Friday morning before bouncing. This move can be used as a new bullish entry point. We will try and reduce our risk by raising the stop loss to $74.50.

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

12/28/13 new stop loss @ 74.50
12/23/13 triggered on gap higher at $77.00. Suggested trigger was $75.60

chart:

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


UnitedHealth Group - UNH - close: 74.69 change: -0.16

Stop Loss: 73.95
Target(s): 82.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on January 16th.
New Positions: Yes, see below

Comments:
12/28/13: UNH spiked higher on Friday morning but gains faded by the closing bell. I don't see any changes from Thursday night's new play description.

Earlier Comments:
UNH has been volatile the last few months and the stock has created what appears to be a potential inverse head-and-shoulders pattern, which is bullish. The neckline (in this case resistance) of the pattern is in the $75.00-76.00 zone. A breakout would suggest a rally into the $83-84 area.

Tonight we're suggesting a trigger to buy calls at $76.05, which would be a new all-time high for UNH. If triggered at $76.05 our short-term target is $82.50 but we will plan to exit prior to UNH's earnings report on January 16th. Our target is optimistic and we'll make adjustments as needed. We may end up exiting closer to $80.00 instead.

Trigger @ 76.05

- Suggested Positions -

Buy the Feb $75 call (UNH1422B75) current ask $2.49

chart:

Entry on December -- at $---.--
Average Daily Volume = 4.4 million
Listed on December 26, 2013


United Parcel Service - UPS - close: 104.72 change: +0.05

Stop Loss: 101.90
Target(s): 108.00
Current Option Gain/Loss: +18.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/28/13: Shares of UPS continued to inch higher on Friday. There is still no fall out from news that UPS was overloaded prior to Christmas and failed to deliver some packages on time. Wall Street could choose to interpret that news as bullish since it means UPS had more business than they expected.

- 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

chart:

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


United Technologies - UTX - close: 112.80 change: +0.11

Stop Loss: 110.40
Target(s): 118.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings in late January
New Positions: Yes, see below

Comments:
12/28/13: UTX tagged another new high on Friday but shares failed to hit our suggested entry point. It did come close to triggering our play. The intraday high was $113.04. Our suggested entry point is $113.05.

If triggered our target is $118.50 but we'll plan on exiting prior to UTX's earnings report in late January. More aggressive investors might want to consider aiming higher. The Point & Figure chart for UTX is bullish with a $139 target.

Trigger @ 113.05

- Suggested Positions -

buy the Feb $115 call (UTX1422B115) current ask $1.73

chart:

Entry on December -- at $---.--
Average Daily Volume = 2.8 million
Listed on December 26, 2013


Wyndham Worldwide - WYN - close: 73.01 change: -0.19

Stop Loss: 71.75
Target(s): 78.50
Current Option Gain/Loss: -23.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28/13: WYN's Friday morning gains didn't last and shares faded back toward the $73 level. I don't see any real changes from my prior comments. Nimble traders could try and buy calls on a dip near $73.00. Or traders could wait for a new high 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.

chart:

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: 46.16 change: -0.79

Stop Loss: 47.60
Target(s): 40.15
Current Option Gain/Loss: -63.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/28/13: SHLD underperformed the market on Friday with a -1.6% decline. I remain cautious here. We're not suggesting new positions.

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

chart:

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