Editor's Note:

The U.S. stock market ended 2013 at new all-time highs.

Bullish plays DISCA, GD, LYB, and UTX all hit our entry points. Plus, our new bearish play on SODA was triggered.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 110.68 change: +1.05

Stop Loss: 107.95
Target(s): 117.50
Current Option Gain/Loss: -12.8%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
12/31/13: AAP actually displayed some relative strength on Tuesday after churning mostly sideways the last several days. A breakout past $112.00 might look like a new entry point.

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

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


Aon Plc. - AON - close: 83.89 change: +0.64

Stop Loss: 81.90
Target(s): 87.00
Current Option Gain/Loss: +29.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/31/13: AON broke out past resistance near $84.00 this morning. The rally didn't last but traders were buying the pullback this afternoon. I am going to go out on a limb here and raise our exit target from $84.85 to $87.00. Keep in mind that we have less than three full weeks left on our 2014 January calls. More conservative traders may want to exit closer to $85.00. I am not suggesting new positions.

- Suggested Positions -

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

12/31/13 adjust exit target higher to $87.00
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

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


Chicago Bridge & Iron - CBI - close: 83.14 change: +1.34

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: +19.3%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
12/31/13: Shares of CBI were also showing relative strength on the last day of 2013. Traders bought the early morning dip and CBI shot higher to breakout past resistance near $82.50 and set a new all-time high. More conservative traders might want to raise their stop loss.

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

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


Discovery Communications, Inc. - DISCA - close: 90.42 change: -0.04

Stop Loss: 87.90
Target(s): 97.50
Current Option Gain/Loss: - 9.6%
Time Frame: exit PRIOR to earnings in mid February
New Positions: see below

Comments:
12/31/13: Our new trade on DISCA has been triggered. The plan was to buy calls at $90.75. The stock gapped open higher at $90.76. That proved to be the high for the day. Shares reversed but the stock bounced at $89.60. Our trade was opened this morning but I would wait for a new relative high before initiating new positions.

Earlier Comments:
Our target is $97.50 but we will plan to exit prior to DISCA's earnings report in mid February. FYI: The Point & Figure chart for DISCA is bullish with a $107 target.

- Suggested Positions -

Long Feb $90 call (DISCA1422B90) entry $3.40*

12/31/13 trade opened on gap higher at $90.76. Suggested trigger was $90.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on December 31 at $90.75
Average Daily Volume = 1.1 million
Listed on December 30, 2013


Energen Corp. - EGN - close: 70.75 change: +0.70

Stop Loss: 67.95
Target(s): 75.75
Current Option Gain/Loss: -14.7%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
12/31/13: Thankfully there was no real follow through on yesterday's intraday pullback. EGN did see a small spike lower this morning but the stock bounced at $69.34. Shares managed to outperform the broader averages with a +0.99% gain. I would still wait for a rally above $71.00 before initiating new positions.

Earlier Comments:
Our plan was to keep our position size small to limit our risk. Our target is $75.75 since the $76.00-76.50 area looks like resistance.

*small positions* - Suggested Positions -

Long Feb $75 call (EGN1422B75) entry $2.17

12/30/13 triggered at $71.05

Entry on December 30 at $71.05
Average Daily Volume = 727 thousand
Listed on December 28, 2013


General Dynamics - GD - close: 95.55 change: +0.45

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: + 4.0%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
12/31/13: Traders also bought the morning dip in GD and the stock's rebound pushed shares past significant resistance at the $95.00 level. Our trigger to buy calls was hit at $95.25. I would still consider new positions at current levels.

Our target is $99.50. More aggressive traders may want to aim higher since the Point & Figure chart for GD is bullish with a $105 target. I am suggesting small positions because GD is arguably overbought with an almost non-stop rally from its December lows near $89.

*small positions* - Suggested Positions -

Long Feb $95 call (GD1422B95) entry $2.21

Entry on December 31 at $95.25
Average Daily Volume = 1.1 million
Listed on December 28, 2013


Honeywell Intl. - HON - close: 91.37 change: +0.37

Stop Loss: 88.40
Target(s): 94.75
Current Option Gain/Loss: +26.8%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
12/31/13: The dip in HON didn't last long with traders buying the stock this morning. Shares ended the year at a new all-time high. 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*

12/28/13 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.

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


Helmerich & Payne - HP - close: 84.08 change: +0.05

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:
12/31/13: It was another quiet day for HP. The stock spiked to a new high this morning only to see shares pare their gains. Don't forget that we have less than three weeks left on our 2014 January options. 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

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



LyondellBasell Industries - LYB - close: 80.28 change: +0.83

Stop Loss: 77.75
Target(s): 85.00
Current Option Gain/Loss: -3.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
12/31/13: We've been patiently waiting for LYB to breakout higher. The stock finally delivered with a +1.0% gain and a close above round-number resistance at $80.00. Our suggested entry point to buy calls was hit at $80.25.

- Suggested Positions -

Long Feb $80 call (LYB1422B80) entry $2.90

Entry on December 31 at $80.25
Average Daily Volume = 3.1 million
Listed on December 24, 2013


Open Text Corp. - OTEX - close: 91.96 change: -0.69

Stop Loss: 89.65
Target(s): 98.50
Current Option Gain/Loss: + 0.0%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
12/31/13: Hmm... OTEX did not see any follow through on yesterday's bounce. The relative weakness today (-0.74%) is a surprise and could be a warning signal. I am not suggesting new positions at this time.

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*
12/30/13 new stop loss @ 89.65
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: 145.64 change: -0.14

Stop Loss: 139.75
Target(s): 149.00
Current Option Gain/Loss: + 11.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
12/31/13: The last day of the year was a quiet one for PII. 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
12/30/13 new stop loss @ 139.75
*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: 92.78 change: +0.69

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: + 4.6%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
12/31/13: The rally in TIF continues with shares showing relative strength again. The stock will ring in the new year at all-time highs. Tonight we'll raise our stop loss to $89.75.

- Suggested Positions -

Long FEB $95 call (TIF1422b95) entry $2.15

12/31/13 new stop loss @ 89.75
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: 77.58 change: +1.35

Stop Loss: 74.50
Target(s): 79.75
Current Option Gain/Loss: +39.5%
Time Frame: EXIT PRIOR to January expiration
New Positions: see below

Comments:
12/31/13: TSCO is building on yesterday's bounce from support. The stock surged +1.77% and broke out to new all-time highs.

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 listed the January calls. I'd rather play February options but (at the time) TSCO didn't have any Februarys or Marchs available yet and the bid/ask spread on the April options is getting a bit wide.

- 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

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


UnitedHealth Group - UNH - close: 75.30 change: +0.52

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:
12/31/13: UNH is starting to look stronger. Shares closed above round-number resistance at $75.00 for the first time in almost three months. More aggressive traders may want to buy calls now. I am suggesting a trigger to buy calls at $76.05.

Keep in mind our time frame for this trade.

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 $2.83

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


United Parcel Service - UPS - close: 105.08 change: +0.16

Stop Loss: 102.75
Target(s): 108.00
Current Option Gain/Loss: +21.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
12/31/13: UPS has been struggling with round-number resistance at $105.00 lately. More conservative traders might want to consider taking profits now. We have less than three weeks left on our January calls.

- Suggested Positions -

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

12/30/13 new stop loss @ 102.75
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


United Technologies - UTX - close: 113.80 change: +1.07

Stop Loss: 110.40
Target(s): 118.50
Current Option Gain/Loss: +13.3%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
12/31/13: Our new play on UTX has been triggered. Our plan was to buy calls at $113.05. Shares gapped open higher at $113.16 this morning, triggered our play. The rally continued with UTX outpacing the major indices with a +0.9$ gain.

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.

- Suggested Positions -

Long Feb $115 call (UTX1422B115) entry $1.80

12/31/13 trade opened on gap higher at $113.16. Suggested trigger was $113.05

Entry on December 31 at $113.16
Average Daily Volume = 2.8 million
Listed on December 26, 2013


Wyndham Worldwide - WYN - close: 73.69 change: +0.37

Stop Loss: 71.75
Target(s): 78.50
Current Option Gain/Loss: -10.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/31/13: WYN spiked to a new high this morning at $74.18 before paring its gains. I am cautiously optimistic but we're not suggesting 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

SodaStream Intl. - SODA - close: 49.64 change: +0.49

Stop Loss: 51.25
Target(s): 41.50
Current Option Gain/Loss: -10.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
12/31/13: Our new bearish play on SODA is not off to a strong start. About 10:15 this morning the stock spiked lower, fell to new multi-month lows, hit our suggested trigger at $48.70, and then just as fast the stock bounced back. SODA actually outperformed the market with a +0.99% gain today.

While our trade did open today I would not launch new positions until we saw a clear failed rally at $50.00, which could happen soon, or a new relative low under $48.39 (today's low).

Earlier Comments:
I am suggesting we use small positions to limit our risk. There are a lot of bears already in this trade. The most recent data listed short interest at more than 50% of the very small 17.5 million share float.

Our target is $41.50. However, I want to warn you that the $45.00 level could be potential support.

*small positions* - Suggested Positions -

Long Feb $45 PUT (SODA1422N45) entry $2.40

Entry on December 31 at $48.70
Average Daily Volume = 980 thousand
Listed on December 30, 2013