Editor's Note:

Most market participants were surprised by the weakness in stocks on the first day of trading in 2014. Normally the first day of the year tends to be a positive one for equities.

PVH hit our entry trigger.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 109.74 change: -0.94

Stop Loss: 107.95
Target(s): 117.50
Current Option Gain/Loss: -23.0%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
01/02/14: The S&P 500 lost -0.88% today. AAP followed suit with a -0.84% decline. The stock failed near short-term resistance at $112.00 this morning and almost completely erased Tuesday's gains. 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

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


Aon Plc. - AON - close: 82.36 change: -1.53

Stop Loss: 81.90
Target(s): 87.00
Current Option Gain/Loss: -23.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/02/14: Ouch! Our AON trade went from a winning trade to a losing trade with today's underperformance. I didn't see any specific headlines to account for today's -1.8% decline. Shares are once against testing their 30-dma. 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: 81.57 change: -1.57

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: + 0.0%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
01/02/14: CBI ended 2013 at a new all-time high. Shares erased Tuesday's gains with a -1.88% decline today. If this dip continues we can watch for what should be support near the $80.00 mark.

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: 89.10 change: -1.32

Stop Loss: 87.90
Target(s): 97.50
Current Option Gain/Loss: -23.5%
Time Frame: exit PRIOR to earnings in mid February
New Positions: see below

Comments:
01/02/14: DISCA's -1.45% decline pulls the stock back below the $90.00 mark. Shares look like they are headed for what should be short-term support at the 10-dma and the $88.00 level. I would wait for a bounce or a new relative high before considering new positions (depending on your trading style).

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: 68.67 change: -2.08

Stop Loss: 67.95
Target(s): 75.75
Current Option Gain/Loss: -33.1%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/02/14: I don't see any news to account for EGN's relative weakness. The stock plunged -2.9%. Shares started to bounce once EGN neared recent support at the $68.00 level. I would be cautious here. We're not suggesting new positions at this time.

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: 94.75 change: -0.80

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: -14.0%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/02/14: The pullback in GD, -0.83%, kept pace with the broader market (-0.88%). Shares should find short-term support near $94.00 and its 10-dma. Nimble traders may want to look for a bounce from the $94 area before launching new positions.

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: 90.32 change: -1.05

Stop Loss: 88.40
Target(s): 94.75
Current Option Gain/Loss: +00.0%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/02/14: The industrials were some of the hardest hit by today's profit taking. HON fell -1.1%. Shares started to bounce once HON neared round-number support near $90.00, which is an area bolstered by its simple 10-dma. If you were looking for a dip to $90 as an entry point then we got it today!

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: 82.25 change: +1.83

Stop Loss: 79.90
Target(s): 87.00
Current Option Gain/Loss: -16.6%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
01/02/14: Ouch! HP just erased about four days worth of gains with today's -2.1% decline. I didn't see any news to account for today's relative weakness. If this dip continues the next possible levels of support are $81.00 and $80.00. 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: 78.78 change: -1.50

Stop Loss: 77.75
Target(s): 85.00
Current Option Gain/Loss: -29.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/02/14: Hmm... today's relative weakness in LYB (-1.8%) doesn't bode well. The sudden reversal lower just erased about four and a half days worth of gains and makes the bullish breakout past $90.00 look more like a bull trap. Traders bought the dip near $78.00 this afternoon. I am not suggesting new positions at this time.

- 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: 91.73 change: -0.23

Stop Loss: 89.65
Target(s): 98.50
Current Option Gain/Loss: - 6.8%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
01/02/14: The profit taking in OTEX was pretty mild. Shares only fell -0.25% and they settled on short-term technical support at the 10-dma. Any further weakness from here will probably carry OTEX toward the next level of support at the $90.00 mark. 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: 145.00 change: -0.64

Stop Loss: 139.75
Target(s): 149.00
Current Option Gain/Loss: + 4.9%
Time Frame: EXIT prior to earnings on January 28th
New Positions: see below

Comments:
01/02/14: It was a relatively quiet day for PII. The stock churned sideways in the $144-146 zone. If the market and PII continues to dip we could see shares testing the 10-dma soon. I am not suggesting new positions at this time.

Please note that our time frame has changed. PII just announced that they will report earnings on January 28th. Our plan will be to exit positions prior to the announcement.

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


PVH Corp. - PVH - close: 136.58 change: +0.56

Stop Loss: 132.95
Target(s): 147.50
Current Option Gain/Loss: - 5.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/02/14: PVH continued to show relative strength and outperformed the market with a +0.4% gain and a breakout to a new high today. Our suggested entry point to buy calls was hit at $136.55.

Our multi-week target is $147.50. Do not be surprised if we see PVH temporarily stall near the $140 level, which could be round-number resistance. More aggressive investors with a longer time frame might want to aim higher since the Point & Figure chart for PVH is bullish with a $172 target.

- Suggested Positions -

Long Feb $140 call (PVH1422B140) entry $3.50

Entry on January 02 at $136.55
Average Daily Volume = 939 thousand
Listed on December 31, 2013


Salix Pharmaceuticals - SLXP - close: 89.09 change: -0.85

Stop Loss: 87.40
Target(s): 98.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/02/14: SLXP spent the first day of 2014 churning sideways inside the $88-90 zone. There is no change from my new play comments from Tuesday night.

Earlier Comments:
SLXP is poised to breakout past resistance at the $90.00 level. If shares can breakout past $90 the next major milestone would be the $100 mark.

I am suggesting a trigger to buy calls at $90.25. If triggered our multi-week target is $98.50.

Trigger @ 90.25

- Suggested Positions -

buy the Feb $95 call (SLXP1422B95)

Entry on December -- at $---.--
Average Daily Volume = 790 thousand
Listed on December 31, 2013


Tiffany & Co - TIF - close: 92.55 change: -0.23

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: + 1.8%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
01/02/14: TIF held up pretty well today. Shares didn't see that much profit taking. The stock actually spiked higher this morning and hit $93.64 before reversing lower. I am not suggesting new positions at this time.

- 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: 76.80 change: -0.75

Stop Loss: 74.50
Target(s): 79.75
Current Option Gain/Loss: +13.9%
Time Frame: EXIT PRIOR to January expiration
New Positions: see below

Comments:
01/02/14: TSCO gave back just over half of Tuesday's gains with today's 78-cent drop. The stock was starting to bounce after nearing the $76.00 level midday. More conservative traders might want to inch their stop loss higher.

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: 74.57 change: -0.73

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:
01/02/14: UNH was not immune to the market's widespread pullback on Thursday. Shares dipped -0.96%. If shares do not show significant improve soon we will likely drop this stock as an active candidate due to UNH's upcoming earnings report.

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)

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


United Parcel Service - UPS - close: 103.32 change: -1.76

Stop Loss: 102.75
Target(s): 108.00
Current Option Gain/Loss: -50.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
01/02/14: Ouch! Today's -1.6% drop in UPS erased almost seven days worth of gains for the stock. Shares fell toward support near $103.00 before starting to bounce this afternoon. The intraday low was $102.82. Our stop loss is at $102.75. Not surprisingly the sharp drop crushed our January options.

- 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: 112.49 change: -1.31

Stop Loss: 110.40
Target(s): 118.50
Current Option Gain/Loss: -13.8%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/02/14: UTX slipped -1.1% thanks to relative weakness in the industrials sector. The $112.00 level could be short-term support so nimble traders might want to try and buy a bounce from the $112.00 mark.

Earlier Comments:
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: 73.52 change: -0.17

Stop Loss: 71.75
Target(s): 78.50
Current Option Gain/Loss: -20.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/02/14: WYN held up relatively well. The stock bounced midday near the $73.00 level and shares pared their losses by the close. I am 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: 48.11 change: -1.53

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:
01/02/14: Today brought good news for SODA bears. The stock failed at round-number resistance near $50.00 this morning. Shares underperformed the market with a -3.0% drop by the closing bell. This is a new relative 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