Editor's Note:

The fact that stocks did not see any follow through on yesterday's widespread sell off is encouraging.

AAP hit our exit target. SHLD hit our entry trigger.


Current Portfolio:


CALL Play Updates

Chicago Bridge & Iron - CBI - close: 81.94 change: +1.49

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: - 6.4%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
01/14/14: CBI bounced from support near $80.00. Yet today's rally failed to rise past yesterday's highs, which does not breed a lot of confidence in the move.

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


Demandware, Inc. - DWRE - close: 67.98 change: -0.05

Stop Loss: 65.40
Target(s): 69.50
Current Option Gain/Loss: +16.3%
Time Frame: exit PRIOR to earnings in mid February
New Positions: see below

Comments:
01/14/14: Ouch! This morning before the bell shares of DWRE were downgraded from "conviction buy" to "neutral" at Goldman Sachs. The stock gapped down at $65.66 but eventually bounced back to virtually unchanged.

The low today was $65.58. We will raise our stop to $65.40. I am not suggesting new positions at this time.

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

- Suggested Positions -

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

01/14/14 new stop loss @ 65.40, DWRE downgraded this morning
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.

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


General Dynamics - GD - close: 95.96 change: +0.95

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: - 2.7%
Time Frame: exit PRIOR to earnings on January 22nd
New Positions: see below

Comments:
01/14/14: Traders bought the dip in GD near $95.00 this morning and the stock marched higher the rest of the session. I am not suggesting new positions at this time.

FYI: GD should begin trading ex-dividend on January 15th. The quarterly cash dividend is 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

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



NetSuite Inc. - N - close: 105.30 change: +2.30

Stop Loss: 101.90
Target(s): 109.75
Current Option Gain/Loss: - 3.3%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
01/14/14: After a sharp decline yesterday N produced an equally sharp bounce today and erased yesterday's losses. I am adjusting our exit target to $109.75.

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

01/14/14 adjust exit target to $109.75
01/11/14 new stop loss @ 101.90

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


Northrop Grumman - NOC - close: 117.11 change: +1.48

Stop Loss: 114.65
Target(s): 124.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
01/14/14: The move in NOC was almost identical to the one in shares of GD. Traders bought the dip this morning and NOC pushed higher the rest of the session. This is a new closing high for the stock. I am raising our stop loss to $114.65.

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

01/14/14 new stop loss @ 114.65
01/10/14 triggered @ 116.50

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


ServiceNow, Inc. - NOW - close: 57.63 change: +0.54

Stop Loss: 53.90
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on January 29th
New Positions: Yes, see below

Comments:
01/14/14: NOW briefly traded below its simple 10-dma before rebounding. Unfortunately the bounce struggled at the $58 level most of the session. Shares did manage a +0.94% gain today.

At the moment we are suggesting a buy-the-dip entry point at $55.50. That might change if we see NOW re-challenge resistance near $60.

We will plan to exit prior to NOW's earnings report on January 29th. FYI: The Point & Figure chart for NOW is bullish with an $80 target.

Trigger @ 55.50

- Suggested Positions -

buy the Feb $60 call (NOW1422B60)

01/13/14 adjust entry point strategy. Move the trigger from $60.25 to a buy-the-dip trigger at $55.50. Adjust the stop loss to $53.90

Entry on January -- at $---.--
Average Daily Volume = 1.2 million
Listed on January 11, 2014


Salix Pharmaceuticals - SLXP - close: 96.58 change: +1.09

Stop Loss: 92.75
Target(s): 98.50
Current Option Gain/Loss: +92.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
01/14/14: Bullish analyst comments this morning helped push SLXP to another new high. Our option is quickly approaching a +100% move. More conservative traders may want to take profits now. We're currently aiming to exit when SLXP hits $98.50. I am adjusting our stop loss up to $92.75.

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*

01/14/14 new stop loss @ 92.75, readers may want to take profits now
01/13/14 new stop loss @ 91.95
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.

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


United Technologies - UTX - close: 112.63 change: -0.17

Stop Loss: 111.75
Target(s): 118.50
Current Option Gain/Loss: -35.5%
Time Frame: exit PRIOR to earnings in late January
New Positions: see below

Comments:
01/14/14: Uh-oh! UTX did not participate in the market's rebound. Instead shares continued to slip lower and confirmed yesterday's breakdown below the 10-dma. UTX is now testing short-term support near $112.00. More conservative investors may want to abandon ship immediately. I am not suggesting new positions.

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

01/14/14 UTX did not participate in the rally. Readers may want to exit early now
01/09/14 new stop loss @ 111.75
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

Rock-Tenn Co. - RKT - close: 100.44 change: +0.78

Stop Loss: 103.55
Target(s): 97.00
Current Option Gain/Loss: + 8.1%
Time Frame: Exit PRIOR to earnings on January 28th
New Positions: see below

Comments:
01/14/14: I cautioned readers last night that RKT might see a bounce. Given the market's widespread rise today I am surprised that RKT did not see a bigger rebound. I am not suggesting new positions at this time. Look for potential short-term resistance at the 10-dma near $102.50.

- Suggested Positions -

Long FEB $100 PUT (RKT1422N100) entry $3.70

01/13/14 new stop loss @ 103.55
01/11/14 adjust exit target from $96.00 to $97.00

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


Sears Holding Corp. - SHLD - close: 35.66 change: +0.20

Stop Loss: 38.05
Target(s): 30.25
Current Option Gain/Loss: - 9.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
01/14/14: Our new put play on SHLD has been triggered. Shares fell to new lows before bouncing as the market rallied higher this afternoon. Our trade opened at $34.85. We have a stop loss just above the gap down high at $38.05. I would wait for a new drop below $35.00 or a new low under $34.20 before initiating new positions.

Earlier Comments:
Please note that traders may want to use small positions. There is a high amount of short interest. The most recent data listed short interest at 54% of the 50.7 million share float. That could spark a short squeeze if the stock were to suddenly move higher.

- Suggested Positions -

Long MAR $30 PUT (SHLD1422o30) entry $2.04

Entry on January 14 at $34.85
Average Daily Volume = 2.2 million
Listed on January 13, 2014



CLOSED BULLISH PLAYS

Advance Auto Parts - AAP - close: 117.60 change: +3.31

Stop Loss: 111.75
Target(s): 117.50
Current Option Gain/Loss: +69.2%
Time Frame: exit PRIOR to earnings in February
New Positions: see below

Comments:
01/14/14: Target achieved.

AAP displayed relative strength today with a bounce near $114 and a surge to new highs. Our exit target was hit at $117.50.

- Suggested Positions -

Mar $115 call (AAP1422c110) entry $3.90* exit $6.60 (+69.2%)

01/14/14 target hit
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