Editor's Note:

Early gains faded but there was no follow through on the morning sell off. The U.S. market managed a midday bounce but gains were limited.

It was a busy day for the Option Investor Newsletter play list.

CI, LVS, QCOM and YELP all hit our suggested entry triggers.

CTSH hit our entry trigger and then reversed low enough to hit our stop loss.

Our plan was to close GD at the open this morning and UTX at the closing bell today.


Current Portfolio:


CALL Play Updates

Accenture - ACN - close: 84.93 change: +0.50

Stop Loss: 83.25
Target(s): 89.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to February option expiration
New Positions: Yes, see below

Comments:
01/21/14: Traders quickly bought the dip in ACN this morning but shares continue to hover just below resistance near $85.00. There is no change from our weekend new play description on ACN.

We're suggesting a trigger to buy calls at $85.15. If triggered our short-term target is $89.50. FYI: The Point & Figure chart for ACN is bullish with a $92 target.

Trigger @ 85.15

- Suggested Positions -

Buy the Feb $85 call (ACN1422B85) current ask $1.35

Entry on January -- at $---.--
Average Daily Volume = 3.3 million
Listed on January 18, 2014


Chicago Bridge & Iron - CBI - close: 82.85 change: -0.01

Stop Loss: 79.65
Target(s): 89.50
Current Option Gain/Loss: - 4.8%
Time Frame: Exit PRIOR to CBI's earnings report in February
New Positions: see below

Comments:
01/21/14: CBI is still holding up reasonably well. The stock bounced near its simple 20-dma midday. The stock closed virtually unchanged on the session. 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

Entry on December 19 at $80.35
Average Daily Volume = 1.5 million
Listed on December 18, 2013


Cigna Corp. - CI - close: 90.13 change: +0.67

Stop Loss: 88.40
Target(s): 95.00
Current Option Gain/Loss: - 0.08%
Time Frame: exit PRIOR to earnings on February 7th
New Positions: see below

Comments:
01/21/14: CI continued to show relative strength on Tuesday with a +0.7% gain. Our suggested trigger to buy calls was hit at $90.25. More conservative traders may want to wait for a move past $90.75 or $91.00 before initiating positions.

Earlier Comments:
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) entry $2.47

01/21/14 triggered @ 90.25

Entry on January 21 at $90.25
Average Daily Volume = 1.0 million
Listed on January 15, 2014


Las Vegas Sands - LVS - close: 82.03 change: +0.10

Stop Loss: 79.95
Target(s): 87.50
Current Option Gain/Loss: - 7.6%
Time Frame: Exit PRIOR to earnings on January 29th
New Positions: see below

Comments:
01/21/14: Our plan was to buy calls on LVS at $82.25 but the stock gapped open higher at $83.32 this morning. Shares pared their gains but did manage to close with a gain. I would consider new positions now or you could wait for a rise above today's high at $82.48.

Our target is $87.50. More aggressive traders could aim higher. However, our time frame is limited. LVS is scheduled to report earnings on January 29th and we do not want to hold over the announcement. FYI: The Point & Figure chart for LVS is bullish with a $94 target.

- Suggested Positions -

Long Feb $82.50 call (LVS1422B82.5) entry $2.50

01/21/14 trade opened on gap higher at $82.32. Suggested entry was $82.25

Entry on January 21 at $82.32
Average Daily Volume = 3.7 million
Listed on January 18, 2014



Northrop Grumman - NOC - close: 119.19 change: +0.95

Stop Loss: 114.65
Target(s): 124.00
Current Option Gain/Loss: +44.4%
Time Frame: exit PRIOR to earnings on January 30th
New Positions: see below

Comments:
01/21/14: NOC is still showing relative strength. I cautioned readers that the $120 level could be round-number resistance and the stock failed near that level this morning (high was $120.44). This could be an important test for NOC's rally. I would not be surprised to see NOC correct back to its simple 10-dma (near $116.80). 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

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


QUALCOMM Inc. - QCOM - close: 75.46 change: +0.73

Stop Loss: 73.75
Target(s): 79.75
Current Option Gain/Loss: + 0.0%
Time Frame: Exit PRIOR to earnings on January 29th
New Positions: see below

Comments:
01/21/14: The rally in QCOM continues with a march past the $75.00 level. Our suggested entry point was hit at $75.25 this morning.

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.

- Suggested Positions -

Long Feb $75 call (QCOM1422B75) entry $1.96

01/21/14 triggered @ 75.25

Entry on January 21 at $75.25
Average Daily Volume = 8.3 million
Listed on January 16, 2014


Seagate Technology - STX - close: 61.24 change: +0.04

Stop Loss: 59.65
Target(s): 65.00
Current Option Gain/Loss: + 3.2%
Time Frame: exit PRIOR to earnings on January 27th.
New Positions: see below

Comments:
01/21/14: Shares of STX were upgraded this morning. The stock reacted with a gap open higher at $62.10 and a spike to $62.76. Shares almost completely erased their gains by the closing bell, which does not inspire a lot of confidence. We have less than a week left on this trade.

The simple 10-dma has risen to $59.75. I am raising our stop loss to $59.65.

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

01/21/14 new stop loss @ 59.65
01/15/14 triggered @ 60.85

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


Thermo Fisher Scientific - TMO - close: 114.95 change: -0.94

Stop Loss: 112.65
Target(s): 119.75
Current Option Gain/Loss: -10.4%
Time Frame: Exit PRIOR to earnings in late January or Early February
New Positions: see below

Comments:
01/21/14: Hmm... Tuesday was not a great session for TMO with shares erasing about three days worth of gains. The stock spiked higher at the open but failed near last Friday's high. The drop to the simple 10-dma is not out of the ordinary but today's move has technically created a bearish engulfing candlestick reversal pattern. More conservative traders may want to raise their stop loss.

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*

01/21/14 Caution: Today's move has created a bearish candlestick pattern
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.

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


Yelp, Inc. - YELP - close: 82.21 change: -0.15

Stop Loss: 79.75
Target(s): 98.00
Current Option Gain/Loss: -15.8%
Time Frame: Exit PRIOR to earnings on Feb. 5th
New Positions: see below

Comments:
01/21/14: Our brand new play on YELP has been opened. The plan was to buy calls at $83.75. Shares hit that mark early this morning before turning south as the market declined. Traders bought the dip near $81.00 midday. I would wait for a new rise above $83.75 before initiating new positions.

Earlier Comments:
I do consider this an aggressive, higher-risk trade. YELP can be volatile and because of that volatility the options are not cheap. I am suggesting small positions. Our target is $98.00 but more conservative traders may want to lock in profits earlier. The $90 level and $95 level could be possible round-number resistance levels.

*small positions* - Suggested Positions -

Long Feb $90 call (YELP1422B90) entry $4.87

01/21/14 triggered @ 83.75

Entry on January 21 at $83.75
Average Daily Volume = 2.7 million
Listed on January 18, 2014




PUT Play Updates

Rock-Tenn Co. - RKT - close: 100.03 change: +0.21

Stop Loss: 102.25
Target(s): 97.00
Current Option Gain/Loss: + 0.0%
Time Frame: Exit PRIOR to earnings on January 28th
New Positions: see below

Comments:
01/21/14: RKT spent another day churning sideways on either side of support at the $100.00 mark. I am starting to worry that the simple 50-dma and the exponential 200-dma in the $99.00-99.50 zone is too much support. More conservative traders may want to exit early. Our option position has fallen to breakeven. 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

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



CLOSED BULLISH PLAYS

Cognizant Tech. - CTSH - close: 98.92 change: -0.42

Stop Loss: 99.40
Target(s): 108.50
Current Option Gain/Loss: -38.2%
Time Frame: exit PRIOR to earnings on February 5th
New Positions: see below

Comments:
01/21/14: It was a volatile day for both the market's major indices and shares of CTSH. Shares garnered some bullish analyst comments this morning. That may have helped push CTSH to a new high. Shares hit our suggested entry point at $101.50 early this morning. Unfortunately CTSH immediately reversed lower and hit our stop loss at $99.40. Our trade lasted less than one hour from entry to exit.

- Suggested Positions -

Feb $105 call (CTSH1422B105) entry $1.75, exit $1.08* (-38.2%)

09/21/14 triggered @ 101.50, then stopped @ 99.40
*option exit price is an estimate since the option did not trade at the time our play was closed.

chart:

Entry on January 21 at $101.50
Average Daily Volume = 1.6 million
Listed on January 15, 2014


General Dynamics - GD - close: 95.30 change: -0.17

Stop Loss: 93.85
Target(s): 99.50
Current Option Gain/Loss: - 0.4%
Time Frame: exit PRIOR to earnings on January 22nd
New Positions: see below

Comments:
01/21/14: It was our plan to exit GD positions at the opening bell this morning. The stock was kind enough to gap open higher at $95.84. Shares went on to tag a new high before reversing into negative territory.

*small positions* - Suggested Positions -

Feb $95 call (GD1422B95) entry $2.21 exit $2.20* (-00.4%)

01/21/14 planned exit this morning
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


United Technologies - UTX - close: 114.99 change: +0.78

Stop Loss: 112.90
Target(s): 118.50
Current Option Gain/Loss: + 3.3%
Time Frame: exit PRIOR to earnings on January 22nd.
New Positions: see below

Comments:
01/21/14: UTX is scheduled to report earnings tomorrow. Our plan was to exit our positions today at the closing bell. UTX was kind enough to breakout to new highs and close up +0.6% today.

- Suggested Positions -

Feb $115 call (UTX1422B115) entry $1.80 exit $1.86 (+3.3%)

01/21/14 planned exit at the close
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