TheStreet.com's Jim Cramer says the Senate is filled with more-savvy politicians, and the upside for beaten-down names is huge.

Nancy Pelosi has now said her piece. The most unpopular Speaker of the House in the history of Wall Street has gotten her precious health care legislation through the House after ramming through a stimulus package that had far too little infrastructure and far too much pay raise for municipal and state workers, the most powerful interest group in the country.

But this time the Senate sees through it, and the politicians -- despite Pelosi's insistence that Tuesday's election went her way -- know better. There are pages after pages after pages in this bill that look threatening. But here's the rub: This bill's public option, the one that is supposed to be a killer to everything health care, should affect no more than 6 million people over a 10-year period, according to the Congressional Budget Office. In order to get 60 votes in the Senate, even that may prove to be too powerful an option.

President Obama started an intense debate in recent months about national health care. People are concerned about how to pay for the high cost of health care in America and feel it is just too expensive. There has to be a better way!

I like oranges and I grew up in Wisconsin, but in January oranges do not grow very well in Wisconsin. I don't know why -- I am not a horticulturalist -- but maybe it's the lack of sunlight, hard frozen tundra, blowing snow or temperatures of 25 below zero. We could spend a long time pointlessly debating the actual reason.

Analyst upgrades:

• Keefe Bruyette upgraded Popular (NASDAQ: BPOP) to Outperform from Market Perform as it believes the issuance of new common stock in exchange for outstanding preferred and trust preferred stock is a net positive. The firm has a $3.50 target on the stock.
• Merriman upgraded Super Micro Computer (NASDAQ: SMCI) to Buy from Neutral as if finds the currrent valuation compelling and believes the company should directly benefit from improving IT budgets. The firm thinks fair value is in the $9.11-$11.13 range.
• Kaufman Bros. upgraded Netflix (NASDAQ: NFLX) to Buy from Hold after its proprietary survey indicated the company is well positioned longer term. The firm finds the valuation on shares attractive at current levels and raised its target price to $53 from $48.
• Taleo (NASDAQ: TLEO) was upgraded to Buy from Neutral at Janney Montgomery.
• Boardwalk Pipeline (BWP) was upgraded to Neutral from Underperform at BofA/Merrill.
• Lloyds Banking (NYSE: LYG) was upgraded to Buy from Hold at RBS.

Readers of this space know that the bias favors conservative-to-moderate risk companies with demonstrated business models. Moreover, the methodology emphasizes fundamentals, preferably supported by technical indicators.

But every once in a while, the technicals take precedence, particularly in an oversold stock in an out-of-favor sector where the 50-day moving average comes in to play. Cigna (NYSE: CI) is one such case study.

Analyst upgrades:

• UBS upgraded Target (NYSE: TGT) to Buy from Neutral and raised its price target to $52 from $45 citing reduced inventories, some credit stability, and an improved back-to-school period.
• Credit Suisse said concerns regarding Safeway's (NYSE: SWY) price position are overblown and that earnings risk is limited. The firm upgraded shares to Outperform from Neutral and raised the target price to $25 from $22.
• Oppenheimer upgraded Canadian Solar (NASDAQ: CSIQ) to Outperform from Perform as it believes the story is underappreciated following the recent sector rally. The firm has a $14 price target on the stock.
• CME Group (NASDAQ: CME) was upgraded to buy from Neutral at Goldman.
• Freeport McMoRan (NYSE: FCX) was upgraded to Overweight from Neutral at JP Morgan.
• Gilead Sciences (NASDAQ: GILD) was upgraded to Buy from Neutral at FTN Equity.

Analyst upgrades:

• Oppenheimer upgraded FTI Consulting (NYSE:FCN) to Outperform from Perform on expectations the stock will outperform in the second half of 2009 due to easier comparisons and a "deeper and longer" restructuring cycle. The firm has a $62 target on shares.
• Citigroup upgraded Cigna (NYSE:CI) to Hold from Sell to reflect reduced balance sheet risk following the company's capital raise and the potential for a PBM sale. The firm raised its target price to $23 from $13.
• Goldman expects Coca-Cola Enterprises (NYSE:CCE) to benefit from favorable soda demand and lower commodity costs. The firm upgraded shares to Conviction Buy from Buy and has a $20 target on the stock.
• Novellus (NASDAQ:NVLS) was raised to Buy from Neutral at Bank of America/Merrill.
• CME Group (NASDAQ:CME) was upgraded at JP Morgan to Neutral from Underweight.
• Allegiant (NASDAQ:ALGT) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  

If you've been watching earnings this past week, or if you read last week's Week in Preview, then this coming week may leave you feeling a bit like Bill Murray in Groundhog's Day. That is, again analysts surveyed by Thomson Reuters expect earnings declines to be more frequent and deeper than earnings gains.

Motorola Inc. (NYSE: MOT), Dow Chemical Co. (NYSE: DOW), Anadarko Petroleum Corp. (NYSE: APC), IAC Interactivecorp (NASDAQ: IACI), Moody's Corp. (NYSE: MCO), Elizabeth Arden Inc. (NASDAQ: RDEN), Devon Energy Corp. (NYSE: DVN), Diebold Inc. (NYSE: DBD), Tyco International Ltd. (NYSE: TYC), United Parcel Service (NYSE: UPS), Cisco Systems Inc. (NASDAQ: CSCO), Polo Ralph Lauren Corp. (NYSE: RL), ITT Corp. (NYSE: ITT), and Walt Disney Co. (NYSE: DIS) are scheduled to report quarterly results this week, and they're all expected to report double-digit declines in earnings.

But again this week, let's take a look who Wall Street feels may have done well in the past quarter.

Analyst upgrades:

• Jefferies upgraded MSC Industrial (NYSE:MSM) to Buy from Hold after meeting with management as they believe shares are attractive at current levels. The firm raised their target price to $44 from $32.
  
• UBS upgraded DuPont Fabros (NYSE:DFT) to Buy from Neutral and raised their target to $7 from $2. The firm believes DuPont Fabros will receive a waiver on its CH1 Construction loan for at least a year.
  
• Royal Bank of Scotland upgraded Credit Suisse (NYSE:CS) to Buy from Hold to reflect the company's derisking of its trading book.
• Smith & Nephew (NYSE:SNN) was upgraded to Buy from Neutral at Goldman and added to the Conviction Buy List; Cigna (NYSE:CI) was also added to the Conviction Buy List.
  
• Affymetrix (NASDAQ:AFFX) was raised to Equal Weight from Underweight at Morgan Stanley.
  
• Airtran Holdings (NYSE:AAI) was upgraded to Buy from Hold at Jesup & Lamont.

At long last -- to this Democrat's view anyway -- Barack Obama is the president of the United States. Now, it's time to gaze into our crystal ball.

Obama has many things on his plate, including fixing the economy. Lots of people are trying to pick the winners and losers. Here are my guesses. Keep in mind that it may take several years for the impact of Obama's policies to be felt.

Defense: Lockheed Martin Corp. (NYSE: LMT), Boeing Co. (NYSE: BA), Northrop Grumman Corp. (NYSE: NOC) and Raytheon Co. (NYSE: RTN) will benefit from the spending needed to replace worn-out military equipment from the wars in Iraq and Afghanistan and Obama's push to improve health care technology. The defense contractors over the past few years have become huge government IT contractors and are experts at systems integration. Each have plunged by double-digits over the past year.

Healthy living: Call me an optimist but I expect the Obama administration to push healthier living and for greater control of health care. Hain Celestial Group Inc. (NASDAQ: HAIN), the largest provider of organic food, seems a likely beneficiary. Also, it's hard to see how he is going to be able to digitize health care records without the involvement of health insurers such as Cigna Corp. (NYSE: CI). Hain is down 42% over the past 52 weeks, while Cigna has plunged more than 70%.

Toyota Motor Corp. (NYSE: TM) said it is suspending production at all 12 of its Japan plants for 11 days over February and March. The once believed to be superior auto manufacturer and company has not been immune to the global economic slowdown that has caused such a deterioration in demand for cars, especially int he U.S. The stoppage is said to be of unprecedented scale for Toyota, which hasn't halted production at all its Japan plants was since August 1993.

Cigna (NYSE: CI) joined the slew of companies that have been announcing layoffs and workforce recuution in the past few month. The health benefits company said Monday that is was cutting 1,100 jobs, or 4% of its total workforce, to save up to $40 million.

Logitech (NASDAQ: LOGI) also said Monday that it was cutting 15% of its salaried work force, or 5% of its global workforce. The maker of computer products also withdrew its corporate guidance and didn't provide new earnings targets. LOGI's CEO urged caution for 2009.

Cigna (NYSE: CI) shares are falling today after competitor Coventry Health Care (NYSE: CVH) lowered its fiscal 2008 earnings forecast to a range between $3.65 and $3.75 for the year, well below the $4.43 per share expected by analysts. Investors are really punishing CVH today and the stock is down 22% currently. Cigna is getting caught in the crossfire as investors worry that similar stocks may also disappoint come earnings time. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on CI.

After hitting a one-year high of $56.98 in January, the stock hit a one-year low of $36.75 in March. This morning, CI opened at $38.24. So far today the stock has hit a low of $36.28 and a high of $38.34. As of 12:15, CI is trading at $36.86, down 2.84 (-7.1%). The chart for CI looked neutral and improving until today's drop, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 9.9% return in four months as long as CI is below $45 at October expiration. Cigna would have to rise by more than 19% before we would start to lose money.

CI hasn't been above $45 since February and has shown resistance around $42 recently. This trade could be risky if legislation that hurts health insurance companies fails to make it through the government, but even if that happens, this position could be protected by resistance CI might find at its 50-day moving average, which is currently around $42 and falling.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CI, CVH, or AET.

Before the bell: Futures mixed after selloff

Coventry Health (NYSE: CVH) shares were down nearly 17% in after-hours trading Wednesday after the managed-care provider lowered estimates for second-quarter and full-year earnings due to disappointing April and May results. Wachovia downgraded CVH to Market Perform from Outperform. Other healthcare stocks felt the pressure and were down in after-hours or premarket trading: UnitedHealth (NYSE: UNH) -7%, Aetna (NYSE: AET) -9.9%, WellPoint (NYSE: WLP) -6%, Humana (NYSE: HUM) -5% and Cigna (NYSE: CI) -5%.

It has been a tough year for investors. We have been dealing with recession fears, housing market worries, high gasoline prices and a very weak U.S dollar. As much as we would love to say that the worst is behind us, we still could be in for some more rocky times ahead. So its best to try to figure out which stocks would be best to avoid for the time being.

Richard Gibbons wrote up a nice piece over on The Motley Fool that looks at some of the stocks that we would be wise to stay away from at this time. Regardless good or bad times, he is convinced there are always ways to make money, but in order to find the winners, it is also necessary to pull out the losers.

So how can we separate out the winners from the losers?

Gibbons seems to have a simple answer for this. He believes there is really no use in wasting our time trying to separate the winners from the losers as there are so many great cheap stocks that could offer us a chance to make money. Gibbons' advice is to not choose ugly and risky companies that could put our hard earned money at risk. To makes this clear, he uses a baseball analogy, expressing his options for the curve balls instead of the fastballs.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Allegiant Travel Co. (NASDAQ: ALGT) beat estimates with soaring Q1 revenues, bucking the airline trend.
• Apache Corp. (NYSE: APA) Q1 profits doubled but fell short of expectations.
• Avon Products Inc. (NYSE: AVP) posted solid Q1 results despite negative operational cash flow.
• Centex Corp. (NYSE: CTX) posted a Q4 loss well below analyst estimates.
• Cigna Corp. (NYSE: CI) profits plunged in the first quarter on litigation charges.
• Countrywide Financial Corp. (NYSE: CFC) posted another big loss, way off estimates of a small profit.
• Deutsche Bank AG (NYSE: DB) posted its first quarterly loss since 2003 on write-downs.
• Gardner Denver Inc. (NYSE: GDI) beat Q1 expectations and raised its outlook for the year.
• International Paper Co. (NYSE: IP) fell short of Wall Street's Q1 earnings estimates.
• Jacobs Engineering Group Inc. (NYSE: JEC) beat Q1 estimates and offered fully-year guidance.
• KBR Inc. (NYSE: KBR) Q1 profit more than doubled on arbitration benefit.
• MasterCard Inc. (NYSE: MA) topped analysts' expectations as Q1 profits more than doubled.
• Office Depot Inc. (NYSE: ODP) Q1 profits tumbled 55% but still beat analysts' estimates.

Health insurer Cigna Corp. (NYSE: CI) reported a plunge of 80% in first-quarter profit this morning. The results were dragged down by deep charges related to its reinsurance business and litigation. The company missed analysts' earnings targets, and also issued a warning for its full-year earnings, sending its shares down in premarket.

For the quarter, Cigna said that its profit dropped to $58 million, or 21 cents per share, compared with $289 million, or 98 cents, reported in the same period a year ago. Excluding one-time items, the insurer's earnings numbers would have come at 94 cents per share, one cent below the average estimate of analysts, according to Thomson Financial .

Looking at revenue, Cigna posted a rise of 4.5% in the quarter on a year-over-year basis. Analysts had been expecting to see revenue of $4.55 billion, while the actual number was slightly higher, at $4.57 billion. The company said that the number of clients who joined its health plans jumped 5.5% to 10.4 million.