Editor's Note:

The S&P 500 index ended a three-day decline with a relatively widespread bounce on Tuesday.

HP and WYN hit our stop loss. TSCO was closed this morning.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 113.18 change: +1.38

Stop Loss: 109.75
Target(s): 117.50
Current Option Gain/Loss: +12.8%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
01/07/14: Traders bought the dip in AAP and shares outperformed the market with a +1.2% gain on Tuesday. I am raising our stop loss to $109.75.

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*

01/07/14 new stop loss @ 109.75
01/04/14 new stop loss @ 108.75
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


Chicago Bridge & Iron - CBI - close: 81.19 change: +0.79

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: -11.2%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
01/07/14: CBI also outperformed the S&P 500. Shares added almost +1% today. It looks like the simple 10-dma is now new short-term resistance. Traders might want to wait for a rally above $81.75 before initiating positions.

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


Check Point Software - CHKP - close: 63.94 change: +0.02

Stop Loss: 63.35
Target(s): 69.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on January 28th
New Positions: Yes, see below

Comments:
01/07/14: The action in CHKP today was disappointing. The morning weakness was a reaction to an analyst downgrade before the opening bell. CHKP managed to bounce back to almost unchanged by the close.

I am suggesting a trigger to buy calls at $65.25. If triggered our target is $69.50 but we will plan to exit prior to CHKP's earnings report on January 28th.

Trigger @ 65.25

- Suggested Positions -

Buy the Feb $65 call (CHKP1422B65)

Entry on January -- at $---.--
Average Daily Volume = 821 thousand
Listed on January 04, 2014


Demandware, Inc. - DWRE - close: 67.06 change: -0.10

Stop Loss: 63.45
Target(s): 69.50
Current Option Gain/Loss: + 4.0%
Time Frame: exit PRIOR to earnings in mid February
New Positions: see below

Comments:
01/07/14: After big gains yesterday DWRE sort of took the day off today. The stock churned sideways inside the $66-68 zone. If you're looking for a new entry point consider buying a dip or bounce near $65.00, which should be support. FYI: The Point & Figure chart for DWRE is bullish with a $77 target.

- Suggested Positions -

Long Feb $70 call (DWRE1422B70) entry $2.45*

01/06/14 new stop loss @ 63.45
01/06/14 triggered @ 65.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on January 06 at $65.25
Average Daily Volume = 275 thousand
Listed on January 02, 2014


General Dynamics - GD - close: 95.26 change: +0.80

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: -11.7%
Time Frame: exit PRIOR to earnings on January 17th
New Positions: see below

Comments:
01/07/14: GD drummed up a +0.8% bounce but shares remain below their New Year's Even high. If you're nimble traders could buy a breakout above the $96.00 level but you may want to raise your stop loss.

Earlier Comments:
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. The plan was to keep our position size small.

*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: 90.80 change: +0.37

Stop Loss: 88.40
Target(s): 94.75
Current Option Gain/Loss: + 0.0%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/07/14: HON was making headlines today with news they are selling their friction materials business to Federal-Mogul. The story failed to do much for HON shares. The stock churned sideways and closed up +0.4%.

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



Open Text Corp. - OTEX - close: 92.47 change: +0.10

Stop Loss: 90.75
Target(s): 98.50
Current Option Gain/Loss: + 1.7%
Time Frame: exit PRIOR to February expiration
New Positions: see below

Comments:
01/07/14: OTEX didn't move much today, which is disappointing. Shares remain under resistance near the $93.00 level. I would be tempted to buy calls on a new high past $93.30.

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*

01/04/14 new stop loss @ 90.75
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


Palo Alto Networks, Inc. - PANW - close: 59.99 change: +2.15

Stop Loss: 56.75
Target(s): 64.00
Current Option Gain/Loss: +30.6%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
01/07/14: The rally resumes in PANW with today's bullish breakout from its two-week consolidation. Shares have pushed through resistance near $58.00 and settled on potential round-number resistance at $60.00. We are raising our stop loss to $56.75.

Earlier Comments:
Our short-term target is $64.00 but I will point out that the February 2013 high near $62.00 could be potential resistance.

- Suggested Positions -

Long Feb $60 call (PANW1422B60) entry $2.45*

01/07/14 new stop loss @ 56.75
01/06/14 triggered @ 58.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on January 06 at $58.25
Average Daily Volume = 1.1 million
Listed on January 04, 2014


Polaris Industries, Inc. - PII - close: 144.78 change: +1.14

Stop Loss: 141.75
Target(s): 149.00
Current Option Gain/Loss: - 4.0%
Time Frame: EXIT prior to earnings on January 28th
New Positions: see below

Comments:
01/07/14: PII managed to keep pace with the rally with a +0.79% gain. Shares remain below short-term resistance near $146.00-$146.40. We will raise our stop loss to $141.75. I am not suggesting new positions at this time.

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
01/07/14 new stop loss @ 141.75
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: 135.07 change: -0.28

Stop Loss: 133.90
Target(s): 147.50
Current Option Gain/Loss: -31.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/07/14: Uh-oh! PVH did not participate in the market's rally today. The intraday low this afternoon was $134.36. We will adjust our stop loss up to $133.90. I am not suggesting new positions at this time.

Earlier Comments:
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

01/07/14 new stop loss @ 133.90

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


Salix Pharmaceuticals - SLXP - close: 89.26 change: -1.17

Stop Loss: 87.80
Target(s): 98.50
Current Option Gain/Loss: -38.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07/14: SLXP had a rough day. The stock was downgraded this morning and shares gapped lower at $88.43. Thankfully the stock bounced at short-term support near $88.00 but the rebound struggled with prior resistance near $90.00. Today's low was $87.93. Tonight we're adjusting our stop loss up to $87.80.

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. If triggered our multi-week target is $98.50.

- Suggested Positions -

Long Feb $95 call (SLXP1422B95) entry $2.50*

01/07/14 new stop loss @ 87.80
01/03/14 triggered @ 90.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on January 03 at $90.25
Average Daily Volume = 790 thousand
Listed on December 31, 2013


Tiffany & Co - TIF - close: 92.15 change: +0.51

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: -20.0%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
01/07/14: TIF delivered a relatively quiet session. Shares churned sideways but managed to close up +0.55%. 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


United Technologies - UTX - close: 113.51 change: +0.72

Stop Loss: 110.40
Target(s): 118.50
Current Option Gain/Loss: - 0.5%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/07/14: UTX drifted higher and posted +0.6% gain but shares remain under short-term resistance near the $114.00 level.

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




PUT Play Updates

Lululemon Athletica - LULU - close: 58.28 change: +0.50

Stop Loss: 60.05
Target(s): 51.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
01/07/14: Shares of LULU gapped open higher this morning as the market reacted to an upgrade to a "buy" and a new $73 price target. The DA Davidson analyst expects the new CEO will "alleviate investor concerns". Unfortunately for LULU investors the rally this morning faded. I don't see any changes from my prior comments.

Earlier Comments:
LULU is poised to breakdown below its December lows. I am suggesting small bearish positions if LULU can trade at $57.00. Why small positions? That's because short interest is already at 17% of the 134.5 million share float. Any sudden bounce could spark some short covering.

If triggered at $57.00 our target is $51.00. More aggressive traders could aim lower since the Point & Figure chart for LULU is bearish with a $43 target.

Trigger @ 57.00

- Suggested Positions -

Buy the Feb $55 PUT (LULU1422N55)

Entry on January -- at $---.--
Average Daily Volume = 4.6 million
Listed on January 06, 2014


SodaStream Intl. - SODA - close: 48.42 change: +0.66

Stop Loss: 50.25
Target(s): 41.50
Current Option Gain/Loss: - 8.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07/14: Hmm... I am urging caution on our SODA trade. The action today is potentially troubling. The stock spiked lower this morning but bounced at $46.50. Not only did SODA pare its losses but it rebounded to a +1.38% gain. Now we could argue this is just an oversold bounce that got a boost from the market's rally today. However, today's move is potentially a bullish reversal pattern. I am lowering our stop loss down to $50.25. Any follow through on this rebound could spark some short covering.

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

01/07/14 new stop loss @ 50.25

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



CLOSED BULLISH PLAYS

Helmerich & Payne - HP - close: 83.58 change: +1.63

Stop Loss: 81.65
Target(s): 87.00
Current Option Gain/Loss: -44.4%
Time Frame: exit PRIOR to January option expiration
New Positions: see below

Comments:
01/07/14: HP displayed relative strength on Tuesday with an impressive +1.98% gain. Unfortunately the stock was downgraded this morning and shares saw a spike lower before bouncing. Our stop loss would have been hit at $81.65 but HP actually gapped open lower at $81.44 this morning.

- Suggested Positions -

Jan $82.50 call (HP1418a82.5) entry $1.80 exit $1.00* (-44.4%)

01/07/14 stopped out on gap down at $81.44, analyst downgrade
*option exit price is an estimate since the option did not trade at the time our play was closed.
01/04/14 new stop loss @ 81.65
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


Tractor Supply Co. - TSCO - close: 75.93 change: +0.47

Stop Loss: 74.50
Target(s): 79.75
Current Option Gain/Loss: -27.9%
Time Frame: EXIT PRIOR to January expiration
New Positions: see below

Comments:
01/07/14: Our plan was to exit our TSCO trade at the opening bell. The stock gapped open higher with a 44-cent gain at $75.90.

- Suggested Positions -

Jan $75 call (TSCO1418a75) entry $2.15 exit $1.55* (-27.9%)

01/07/14 planned exit
*option exit price is an estimate since the option did not trade at the time our play was closed.
01/06/14 prepare to exit immediately
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


Wyndham Worldwide - WYN - close: 71.74 change: -0.74

Stop Loss: 71.75
Target(s): 78.50
Current Option Gain/Loss: -53.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/07/14: WYN did not participate in the market's rebound today. Instead shares continued to sink and hit our stop loss at $71.75.

- Suggested Positions -

Long Feb $75 call (WYN1422B75) entry $1.95* exit $0.90 (-53.8%)

01/07/14 stopped out
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