The stock market experienced a widespread pull back. A handful of our candidates are testing short-term support levels.

CALL Play Updates

AvalonBay Commty. - AVB - close: 78.59 change: -1.89 stop: 77.90

There was no follow through on AVB's bounce from Monday. The stock retreated back toward short-term support near $78.00. If the stock closes under $78 we might drop it as a bullish candidate. I'd start watching prior resistance in the $76-75 zone as potential support. Right now our plan is to buy calls if AVB hits our trigger at $82.05. If triggered our first target is $87.50. We will plan to exit ahead of the early February earnings report.

Entry  on   January xx at $ xx.xx <-- TRIGGER @ 82.05
Change since picked:       + 0.00
Earnings Date            02/03/10 (confirmed)
Average Daily Volume =        1.4 million  
Listed on   January 09, 2010         

Caterpillar - CAT - close: 62.24 change: -1.89 stop: 59.45

After yesterday's big move it was natural to see some profit taking in CAT. Shares gapped open lower at $63.01 but traders bought the dip near $61.20. Look for broken resistance near $60 to act as new support. Our second and final target is $67.00. Earnings are coming up quick and we plan to exit ahead of the report on January 26th.

Entry  on   January 09 at $ 60.95 /gap higher entry (small positions)     
Change since picked: + 3.18
/take profits early $ 64.13 (+5.2%) Earnings Date 01/26/10 (confirmed)
Average Daily Volume = 4.8 million
Listed on January 09, 2010

Express Scripts - ESRX - close: 89.17 change: -1.06 stop: 87.45

The pull back in ESRX continues with the market-wide decline on Tuesday. Prior resistance near $89.00 is offering a little bit of support. At this time I'd wait for a new bounce back above $90.00 before considering new bullish positions. Our first target is $95.75. Our second target is $99.75. We do not want to hold over the February earnings report.

Entry  on   January 09 at $ 91.65 (small positions)     
Change since picked: - 2.48
Earnings Date 02/24/10 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on January 09, 2010

FUQI Intl. - FUQI - close: 21.15 change: -0.52 stop: 18.99

FUQI delivered a volatile morning with a gap down and immediate spike higher. Yet by the closing bell shares gave up 2.3%. Watch for broken resistance near $20.00 and its 50-dma to act as new support. Traders can use a dip or a bounce near $20 as a new entry point to buy calls. This was a very aggressive trade and I suggested very small positions. Our target to exit is $24.75 but more conservative traders may want to start taking profits early anywhere above $22.50.

Entry  on   January 06 at $ 20.51   (small positions 1/4)  
Change since picked: + 0.64
Earnings Date 03/31/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on January 04, 2010

J.P.Morgan Chase - JPM - close: 43.49 change: -1.04 stop: 41.90

We have two days left. JPM is due to report earnings on Friday morning. I am tempted to hold over the report. The yield curve has been exceptionally steep, which gives banks a big profit margin on their lending. However, there are dozens of other factors and risks to consider. Thus, we'll play it safe and exit on Thursday at the closing bell to avoid holding over the earnings announcement. I'm not suggesting new positions at this time. Our second and final target is $46.90.

Entry  on   January 04 at $ 42.85 (small positions 1/2)      
Change since picked: + 0.64
take profits on 01/09/10 @ 44.68 (+4.2%) Earnings Date 01/15/10 (confirmed)
Average Daily Volume = 31.6 million
Listed on January 04, 2010

L-3 Communications - LLL - close: 88.18 change: -0.46 stop: 86.90

LLL was not immune to the market's decline but traders were buying the dips both this morning and this afternoon. More conservative traders could bump their stops toward today's low (87.47). The trend for LLL is still up but if the market really starts to correct we can bet on LLL following it lower.

I did label this an aggressive, higher-risk trade. Our first target to take profits is at $89.95. Our second and final target is $94.00. We want to exit ahead of the late January earnings report. FYI: The Point & Figure chart is bullish with a $104 target.

Entry  on  December 28 at $ 86.80       
Change since picked: + 1.38
Earnings Date 01/28/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 26, 2009

Precision Castparts - PCP - close: 114.49 change: -1.79 stop: 112.25

PCP is seeing some volatility with a high of $118.62 yesterday and a low at $112.92 today. If there is any follow through lower tomorrow we'll probably get stopped out. More conservative traders could exit early now. Traders did buy the dip this morning so I'm not willing to abandon ship just yet. I'm not suggesting new positions. More aggressive traders could aim higher. We'll keep our final exit at $118.75.

Picked on  December 01 at $107.35      
Change since picked: + 7.14
/1st target hit $112.45 (+4.7%)
Earnings Date 01/20/10 (unconfirmed)
Average Daily Volume = 817 thousand
Listed on November 28, 2009

TORO Co. - TTC - close: 43.22 change: -0.55 stop: 41.40

TTC is holding up reasonably well. The stock has traded in the $43-44 zone the last couple of days. The $44 level is resistance from late December. If shares actually reversed from here it will looks like a bearish double top. I would be tempted to buy calls on a new dip or a bounce near $42.00. Our exit target is $45.90. We don't want to hold over the February earnings report. The plan calls for small positions to limit our risk.

Entry  on   January 07 at $ 42.60 (small positions)      
Change since picked: + 0.62
Earnings Date 02/18/10 (unconfirmed)
Average Daily Volume = 289 thousand
Listed on January 05, 2010

UnitedHealth Group - UNH - close: 32.05 change: -0.87 stop: 29.90

Healthcare stocks are normally considered a defensive play but the group was not immune to today's market weakness. UNH gave up 2.6% with a plunge toward its 10 and 21-dma. If you were looking for an entry point near $32 you got it. Just be sure to use a relatively tight stop loss.

This was a "lottery ticket" style of play. We knew it was risky given all the political ups and downs for the healthcare bill. Our time frame was several weeks and we listed January and March calls. At this time if you choose to open new positions I'd use March calls but that would require holding over the late January earnings report (to get the most out of your March calls). Our first target is $34.00. Our longer-term target is $36.00.

Entry  on  December 10 at $ 30.31       
Change since picked: + 1.74
Earnings Date 01/21/10 (unconfirmed)
Average Daily Volume = 819 thousand
Listed on December 10, 2009

Whirlpool - WHR - close: 82.35 change: -1.67 stop: 79.90

Shares of WHR gapped open lower at $83.24 this morning. The stock managed a meager bounce from its 21-dma. If you were looking for a dip near $82 as an entry point you got it. Our original play suggested January calls so we'll need to exit before expiration.

WHR has already hit our first target at $84.75. Our second target is $89.00.

Entry  on  December 19 at $ 80.76 /gap higher entry      
Change since picked: + 1.59
/1st target hit $84.75 (+4.9%)
Earnings Date 02/08/10 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on December 19, 2009

PUT Play Updates

Sears Holding - SHLD - close: 100.43 change: +0.99 stop: 102.05

Uh-oh! We could be in trouble here. The market produces a widespread decline and SHLD rallies? That's not the sort of relative strength we want to see in our put candidates. I am suggesting that more conservative traders exit early now. I'm not suggesting new positions. Our first target to exit is $95.25. Our second target to exit is $91.00.

Entry  on   January 09 at $ 99.17 (small positions) 
Change since picked: + 1.26
Earnings Date 02/25/10 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on January 09, 2010