Editor's Note:

The market could have tumbled on the disappointing jobs number. Instead stocks managed to reverse their losses and close up on Friday's session.

NOC hit our entry trigger. LULU has been removed.
We want to exit both HON and PII on Monday morning.


Current Portfolio:


CALL Play Updates

Advance Auto Parts - AAP - close: 115.64 change: +2.09

Stop Loss: 111.75
Target(s): 117.50
Current Option Gain/Loss: +41.0%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
01/11/14: The jobs report had no affect on shares of AAP. Shares broke through resistance near $114 and rallied +1.8% to close at new highs. Tonight we're adjusting our stop loss up to $111.75.

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*

01/11/14 new stop loss @ 111.75
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

chart:

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


Chicago Bridge & Iron - CBI - close: 82.22 change: +0.13

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:
01/11/14: Friday proved to be a quiet session for CBI. Shares spent the session drifting sideways above the $82.00 level. CBI appears to have overhead resistance in the $83.15 area.

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


Check Point Software - CHKP - close: 65.04 change: +0.34

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:
01/11/14: CHKP bounced from short-term support near its rising 10-dma. More aggressive traders may want to buy calls now following Friday's intraday rebound. We're still 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)

chart:

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


Demandware, Inc. - DWRE - close: 68.44 change: -0.53

Stop Loss: 64.75
Target(s): 69.50
Current Option Gain/Loss: +30.6%
Time Frame: exit PRIOR to earnings in mid February
New Positions: see below

Comments:
01/11/14: Hmm... that's two days in a row we have seen DWRE churning sideways just above the $68.00 level. Is the rally losing steam? Is DWRE just consolidating gains? The stock should see short-term support near $66.00 and near $65.00. I am not suggesting new positions.

FYI: The Point & Figure chart for DWRE is bullish with a $77 target.

- Suggested Positions -

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

01/08/14 new stop loss @ 64.75
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.

chart:

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


General Dynamics - GD - close: 95.10 change: -0.13

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: -18.5%
Time Frame: exit PRIOR to earnings on January 17th
New Positions: see below

Comments:
01/11/14: GD was little changed on Friday. The stock remains inside its $94-96 trading range. I am not suggesting new positions at this time. Traders will want to take note that GD will begin trading ex-dividend on January 15th, 2014. The quarterly cash dividend should be 56 cents.

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

chart:

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


Honeywell Intl. - HON - close: 90.16 change: -0.31

Stop Loss: 89.65
Target(s): 94.75
Current Option Gain/Loss: -18.8%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/11/14: Shares of HON are not cooperating with us. The stock has spent over two weeks consolidating sideways. Unfortunately this sideways move is developing a slightly bearish trend of lower highs and lower lows.

Tonight we're suggesting an immediate exit on Monday morning. I would keep HON on your watch list. Another dip or a bounce near technical support at its simple 100-dma (currently near $86) might be a good entry point for calls.

- Suggested Positions -

Long Mar $92.50 call (HON1422c92.5) entry $1.75*

01/11/14 prepare to exit on Monday morning
01/08/14 new stop loss @ 89.65
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


NetSuite Inc. - N - close: 105.21 change: +1.00

Stop Loss: 101.90
Target(s): 110.00
Current Option Gain/Loss: + 3.3%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
01/11/14: Traders continue to buy the dips in N. The stock bounced back into positive territory on Friday afternoon and closed at a new two-month high. I am raising our stop loss to $101.90.

Earlier Comments:
Our target is $110.00. However, we will plan to exit prior to their earnings report in late January or early February. FYI: The Point & Figure chart for N is bullish with a $129 target.

- Suggested Positions -

Long Feb $110 call (N1422B110) entry $3.00

01/11/14 new stop loss @ 101.90

chart:

Entry on January 08 at $103.75
Average Daily Volume = 410 thousand
Listed on January 07, 2014


Northrop Grumman - NOC - close: 116.37 change: +0.74

Stop Loss: 113.75
Target(s): 124.00
Current Option Gain/Loss: - 7.4%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
01/11/14: Our brand new play on NOC has been triggered. NOC rebounded from its early morning dip near $115.00 and shares hit new highs on a midday rally. Our suggested entry point was hit at $116.50. I would still consider new positions now at current levels or you could wait for a new high above $116.60.

Earlier Comments:
Our target is $124.00. I'll confess that might be a little bit optimistic since the $120 level could be round-number resistance. We will plan on exiting prior to NOC's earnings in very late January or early February (no date yet).

- Suggested Positions -

Long FEB $120 call (NOC1422B120) entry $1.35

01/10/14 triggered @ 116.50

chart:

Entry on January 10 at $116.50
Average Daily Volume = 1.3 million
Listed on January 09, 2014


NetEase, Inc. - NTES - close: 81.77 change: +2.00

Stop Loss: 78.90
Target(s): 87.50
Current Option Gain/Loss: - 7.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
01/11/14: Great news! There was no real follow through on Thursday's bearish reversal pattern in NTES. Traders bought the dip at short-term technical support on NTES' rising 10-dma on Friday morning. The stock outperformed with broader market with a +2.5% bounce that erased most of Thursday's decline.

Friday's intraday low was $79.25. We are adjusting our stop loss to $78.90.

- Suggested Positions -

Long Feb $85 call (NTES1422B85) entry $2.85*

01/11/14 new stop loss @ 78.90
01/09/14 Warning! Today's session has created a bearish reversal pattern

chart:

Entry on January 08 at $80.75
Average Daily Volume = 661 thousand
Listed on January 07, 2014



Palo Alto Networks, Inc. - PANW - close: 60.65 change: +0.01

Stop Loss: 57.65
Target(s): 64.00
Current Option Gain/Loss: +42.8%
Time Frame: exit PRIOR to February option expiration
New Positions: see below

Comments:
01/11/14: PANW delivered a lackluster session on Friday and closed virtually unchanged. We will inch our stop loss up to $57.90. More conservative traders may want to raise their stop higher but I am expecting the $58 level to be support if PANW sees a pullback. I am not suggesting new positions at this time.

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*

01/09/14 new stop loss @ 57.65
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.

chart:

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


Polaris Industries, Inc. - PII - close: 143.66 change: -1.31

Stop Loss: 142.40
Target(s): 149.00
Current Option Gain/Loss: -21.8%
Time Frame: EXIT prior to earnings on January 28th
New Positions: see below

Comments:
01/11/14: We are growing more concerned about PII's performance. Shares underperformed on Friday with a -0.9% decline and are currently resting near the bottom of its short-term trading range. I suspect PII is about to drop toward $140. If the market corrects we could see PII drop toward the 50-dma.

In an effort to minimize any losses we are suggesting an immediate exit on Monday morning.

- Suggested Positions -

Long Mar $150 call (PII1422c150) entry $4.48

01/11/14 prepare to exit on Monday morning
01/08/14 new stop loss @ 142.40
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.

chart:

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


Salix Pharmaceuticals - SLXP - close: 93.62 change: +2.02

Stop Loss: 89.40
Target(s): 98.50
Current Option Gain/Loss: +14.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/11/14: Some of the drug and biotech names continue to show relative strength. SLXP is one of them with a +2.2% gain on Friday. This is also a bullish breakout to a new high. We are adjusting our stop loss to $89.40.

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*

01/11/14 new stop loss @ 89.40
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.

chart:

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


United Technologies - UTX - close: 113.83 change: +0.12

Stop Loss: 111.75
Target(s): 118.50
Current Option Gain/Loss: - 4.4%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/11/14: UTX spent this past week slowly churning higher with shares bouncing along its rising 10-dma. I would still be tempted to buy calls on a rally above $114.25.

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

01/09/14 new stop loss @ 111.75
12/31/13 trade opened on gap higher at $113.16. Suggested trigger was $113.05

chart:

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




PUT Play Updates

Rock-Tenn Co. - RKT - close: 101.16 change: -0.44

Stop Loss: 105.25
Target(s): 97.00
Current Option Gain/Loss: + 2.7%
Time Frame: Exit PRIOR to earnings on January 28th
New Positions: see below

Comments:
01/11/14: RKT continued to underperform the broader market on Friday. The stock tried to bounce on Friday morning but failed at its 20-dma. The next hurdle for the bears is pulling RKT below potential round-number support at $100.00 and potential technical support at the 50-dma.

Please note that I am adjusting our exit target to $97.00.

- Suggested Positions -

Long FEB $100 PUT (RKT1422N100) entry $3.70

01/11/14 adjust exit target from $96.00 to $97.00

chart:

Entry on January 09 at $101.96
Average Daily Volume = 656 thousand
Listed on January 08, 2014


CLOSED BEARISH PLAYS

Lululemon Athletica - LULU - close: 59.60 change: +2.25

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

Comments:
01/11/14: LULU has been on the verge of breaking down to new 52-week lows. Yet two analyst firms issued positive comments on shares this past week. It looks like shorts started to cover on Friday and LULU surged +3.9%. Our trade has not opened yet. The plan was to buy puts at $56.90, which hasn't been hit. Given Friday's reversal higher we're choosing to drop LULU as a candidate.

Trade did not open.

01/11/14 removed from the newsletter. trade did not open.
01/09/14 LULU missed our trigger by a penny. We're adjusting the suggested entry point from 57.00 to 56.90

chart:

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