Editor's Note:

We are trimming a couple of trades tonight as we make adjustments for what is working and what's not.

Prepare to exit GD on Tuesday morning and UTX on Tuesday at the close.


Current Portfolio:


CALL Play Updates

Chicago Bridge & Iron - CBI - close: 82.86 change: -0.04

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:
01/18/14: CBI has spent the last couple of days hovering below resistance in the $83.00 area. A breakout past this level could be a new bullish entry point. The intraday high for the week was $83.41. I'd be tempted to buy calls again above $83.50.

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


Cigna Corp. - CI - close: 89.46 change: +0.64

Stop Loss: 88.40
Target(s): 95.00
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on February 7th
New Positions: Yes, see below

Comments:
01/18/14: CI pierced its 10-dma on Friday. Yet traders bought the dip as the stock neared $88. CI bounced and displayed relative strength with a +0.7% gain. The trading in CI over the past few days has started to look a bit like a bull-flag pattern. At the moment I don't see any changes from my earlier comments.

Earlier Comments:
I am suggesting a trigger to buy calls at $90.25. If you prefer an alternative entry point could be $90.75, which would mean waiting for a breakout past its highs from last week. If we are triggered at $90.25 I am suggesting a $95.00 target. However, we'll plan on exiting prior to the earnings report on February 7th.

FYI: The Point & Figure chart for CI is bullish with a $119 target.

Trigger @ 90.25

- Suggested Positions -

buy the Feb $90 call (CI1422B90)

chart:

Entry on January -- at $---.--
Average Daily Volume = 1.0 million
Listed on January 15, 2014


Cognizant Tech. - CTSH - close: 99.34 change: -0.96

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on February 5th
New Positions: Yes, see below

Comments:
01/18/14: CTSH has seen a two-day pullback toward short-term technical support at its rising 20-dma. Currently we are waiting for a bullish breakout to new highs.

Earlier Comments:
I am suggesting a trigger to buy calls at $101.50. If triggered our target is $108.50. However, we will plan on exiting positions prior to the earnings report on February 5th.

Trigger @ 101.50

- Suggested Positions -

buy the Feb $105 call (CTSH1422B105)

chart:

Entry on January -- at $---.--
Average Daily Volume = 1.6 million
Listed on January 15, 2014


General Dynamics - GD - close: 95.47 change: +0.07

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: - 4.9%
Time Frame: exit PRIOR to earnings on January 22nd
New Positions: see below

Comments:
01/18/14: I am running out of patience on our GD trade. The big-picture trend is up but short-term the momentum has slowed. We're suggesting an immediate exit on Tuesday morning (market is closed on Monday).

*small positions* - Suggested Positions -

Long Feb $95 call (GD1422B95) entry $2.21

01/18/14 prepare to exit immediately on Tuesday morning

chart:

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



Northrop Grumman - NOC - close: 118.24 change: -0.05

Stop Loss: 114.65
Target(s): 124.00
Current Option Gain/Loss: +14.8%
Time Frame: exit PRIOR to earnings on January 30th
New Positions: see below

Comments:
01/18/14: With Thursday's gain NOC had been up nine out of the last ten sessions. Friday saw the rally in NOC pause and shares drifted sideways. I am not suggesting new positions at this time.

We will plan on exiting prior to earnings on January 30th.

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.

- Suggested Positions -

Long FEB $120 call (NOC1422B120) entry $1.35

01/14/14 new stop loss @ 114.65
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


QUALCOMM Inc. - QCOM - close: 74.73 change: +0.01

Stop Loss: 73.75
Target(s): 79.75
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on January 29th
New Positions: Yes, see below

Comments:
01/18/14: QCOM is seeing a big bounce from its 50-dma and appears to be breaking out from its $72-74 trading range. The stock managed to end the week at new multi-year highs. I don't see any changes from my prior new play description comments.

I am suggesting a trigger to buy calls at $75.25. If triggered our short-term target is $79.75. This is a short-term trade. QCOM is due to report earnings on January 29th. Yet Apple (AAPL), who QCOM does a lot of business with, reports earnings on January 27th. We will definitely plan to exit prior to QCOM's earnings report and might consider an exit ahead of AAPL's report.

FYI: The Point & Figure chart for QCOM is bullish with a $93 target.

Trigger @ 75.25

- Suggested Positions -

Buy the Feb $75 call (QCOM1422B75) current ask $1.70

chart:

Entry on January -- at $---.--
Average Daily Volume = 8.3 million
Listed on January 16, 2014


Seagate Technology - STX - close: 61.20 change: +0.54

Stop Loss: 58.45
Target(s): 65.00
Current Option Gain/Loss: + 3.2%
Time Frame: exit PRIOR to earnings on January 27th.
New Positions: see below

Comments:
01/18/14: STX briefly traded below the $60.00 level on Friday morning but quickly reversing higher. The stock displayed relative strength on Friday with a +0.89% gain at the closing bell. More conservative traders may want to inch up their stop loss. I would be tempted to buy calls at current levels.

Earlier Comments:
Our short-term target is $65.00. Investors with a longer time horizon could aim higher since the Point & Figure chart is bullish with a $77.00 target. However, we will plan to exit prior to STX's earnings report on January 27th.

- Suggested Positions -

Long Feb $60 call (STX1422B60) entry $3.10

01/15/14 triggered @ 60.85

chart:

Entry on January 15 at $60.85
Average Daily Volume = 3.5 million
Listed on January 14, 2014


Thermo Fisher Scientific - TMO - close: 115.89 change: -0.22

Stop Loss: 112.65
Target(s): 119.75
Current Option Gain/Loss: + 7.4%
Time Frame: Exit PRIOR to earnings in late January or Early February
New Positions: see below

Comments:
01/18/14: TMO tagged a new all-time high on Friday morning at $116.50. Shares pared their gains but spent most of the day hovering just below the $116 level. More conservative traders may want to adjust their stop closer to the simple 10-dma (currently near $114.00).

Earlier Comments:
Our target is $119.75. We will plan on exiting prior to earnings. At the moment there is no confirmed earnings date. It should be near the end of January or early February.

- Suggested Positions -

Long Feb $115 call (TMO1422B115) entry $3.35*

01/15/14 triggered @ 115.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on January 15 at $115.25
Average Daily Volume = 1.8 million
Listed on January 14, 2014


United Technologies - UTX - close: 114.21 change: -0.01

Stop Loss: 112.90
Target(s): 118.50
Current Option Gain/Loss: - 8.3%
Time Frame: exit PRIOR to earnings on January 22nd.
New Positions: see below

Comments:
01/18/14: We have run out of time on our UTX trade. The company is due to report earnings on January 22nd. I am suggesting we plan on exiting positions Tuesday, January 21st, at the closing bell. I'll adjust the stop loss to $112.90.

- Suggested Positions -

Long Feb $115 call (UTX1422B115) entry $1.80

01/18/14 new stop loss @ 112.90, prepare to exit on Tuesday, Jan. 21st at the closing bell
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

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: 99.82 change: -0.36

Stop Loss: 102.25
Target(s): 97.00
Current Option Gain/Loss: + 8.1%
Time Frame: Exit PRIOR to earnings on January 28th
New Positions: see below

Comments:
01/18/14: The path of least resistance continues to appear lower for RKT. Shares briefly traded below their exponential 200-dma and the 40-dma on Friday morning before trimming their losses. I am adjusting our stop loss to $102.25. I am not suggesting new positions at this time.

- Suggested Positions -

Long FEB $100 PUT (RKT1422N100) entry $3.70

01/18/14 new stop loss @ 102.25
01/16/14 new stop loss @ 102.55
01/13/14 new stop loss @ 103.55
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