Option Investor
Newsletter

Daily Newsletter, Thursday, 3/15/2012

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Dow Closes Near 4 Year Highs

by Thomas Hughes

Click here to email Thomas Hughes
The Dow Jones Industrial Average and the S&P 500 closed today near 4 year highs. The Dow continued its climb past 13,000 and the S&P breached 1,400. Financials and Transports led the advance. Other than that it was a rather quiet day. Economic data was a little mixed but generally supports an improving economy. Volume remained on the low side, a fact that some say is a sign of the times and will probably persist.


Futures were positive prior to the announcements of today's economic data and barely changed afterward. Holding steady throughout the morning the market opened marginally higher. After a brief dip below yesterdays close early in the morning stock prices regained the early advance and were approaching multi-year highs by the noon hour. The market was evenly mixed between advancers and decliners in early trading and ended the day with advancers firmly in the lead.


Initial jobless claims were lower than expected. First time claims for the week ending 3/10/2012 fell 14,000 to 351,000. This is a return to four year lows last seen in February. The previous week was revised up from 362,000 to 365,000. The four week moving average remained steady at 355,750 claims per week. Analysts had been expecting 355,000 initial claims.


Continuing Claims fell as well, by 81,000 to a seasonally adjusted 3.343 million.


Total claims for unemployment benefits edged marginally higher. Total claims rose by just over 36,000 to 7.42 million.


Economic data in today's news was positive despite rising producer prices. The Producer Price Index rose by .4% in February, slightly lower than the consensus .5% and hotter than January's .1%. The core number rose by .2% in February, down from .4% in January.

The Empire Manufacturing and the Philadelphia Federal Reserve Survey of Manufacturing both increased in February. Empire Manufacturing increased by nearly a full point to 20.21 from 19.53 in January. The Philadelphia Fed Survey rose to 12.5% from January's 10.2%. These numbers show strengthening manufacturing activity.

Real estate data is mixed but generally positive. Improvements are sluggish but show some big improvements from last year. Mortgage delinquencies were reported up in February but the backlog of foreclosed homes is starting to clear up. New foreclosures are down 2% from January and 8% from February last year. Home repossessions also decreased by 4% from the previous month. Interests rates on 30 year fixed rate mortgages rose less than .1% from last week to 3.92%.

News from across the pond include a warning to England, euro exchange rates, new highs in Greek unemployment and a bond offering in Spain. The UK was warned by credit rating agency Fitch that it could have its AAA rating downgraded in the next few years if it fails to contain public debt. Fitch says that UK has “limited resources” to withstand any more financial strains.

The Swiss National Bank left exchange rates unchanged at 1.20 Swiss Francs per Euro. It also left interest rates unchanged and continued to defend an exchange rate floor first introduced last September.

Greek unemployment rose to 20.7%, setting a new all time high. The problem is being intensified by the austerity measures put in place as conditions for continued economic aid. The debt swap deal reached in the last week helped Greece to secure a fresh 130 billion euro bailout. The International Monetary Fund also issued a 28 billion euro facility for Greece. Greece's economy shrank by over 7% in 2011 and 2012 is shaping up to be another year of sharp declines.

Spain sold close to $4 billion in new bonds Thursday. The offering had broad support from investors. The sale will help Spain with its short term obligations and helps ensure the country can live up its own austerity plans. The bonds were issued over several terms. The 2015 maturity bond, with a 4.4% coupon, sold at an average yield of 2.440%.

European markets closed mixed with weak gains for the DAX (+0.77%) and the CAC 40 (+0.31%) and a slight decline for the FTSE (-0.22%).

Providence Resources (PVR-LN), traded on the London stock exchange, found the gold at the end of the rainbow, the Black Gold that is. The oil driller discovered oil off the coast of Ireland with twice the commercial flow rate threshold. The find is in the Ballyhoe Field in the North Celtic Sea Basin. The stock was up 12% in mid day trading. Partner Lansdowne Oil & Gas (LOGP-LN) also traded higher on the news.

Three high profile IPO's happened this morning. Allison Transmission Holdings (ALSN), Demandware (DWRE) and MA-COM Technology Solutions.

Allison Transmission Holdings (ALSN) manufactures automatic transmissions for medium and heavy duty. commercial vehicles. The stock opened at $23, in the middle of its expected range, traded higher for a while and ended the day at $23.22.


Demandware(DWRE), a cloud computing provider, enables clients to design and implement ecommerce websites. The stock was originally priced in the range of $12.50-$14.50 and was thought to open around $16. Demand for Demandware pushed the opening to $25.25, the stock quickly traded lower and ended the day down from the opening at $23.65.


MA-COM Technology Solutions (MTSI) is a provider of high performance analog semiconductor solutions for wireless and wireline applications. The stock opened at $19.10, just over the high of end of its expected range of $17-$19. The stock quickly gained 4%, continued to trade higher and closed the day at $20.79, an 8.8% gain.


PF Chang's (PFCB) was upgraded to hold from sell by Argus. The stock has been trending up since last December from a bottom established summer 2011. The stock is approaching technical resistance around $42.50 on average volume. The restaurant chain is making money but not as much as expected and has an -33% earnings surprise percentage. The technical indicators are also weak.

PF Chang's, daily with support and resistance

Cisco Systems (CSCO) announced the purchase of London Based NDS Group for $5 billion. Analysts argued that the purchase was expensive but potentially a good move for Cisco long term. NDS provides streaming video for multichannel television networks. The move boosts Cisco's presence in video and entertainment. The stock traded down today as much as 2% and closed at $19.91, just above the 30 day moving average. The stock has support around $19 and is trading on average volume.

Cisco Systems, daily with moving average and support

Apple soared to new intraday highs and hit the $600 mark for the first time. This happened just a month after crossing $500. Expectations for the new version of the iPad and iPhones have the stock trading sharply higher for the year, up around 50% for the first 2 1/2 months of 2012. The stock appears to have support around $550, where the most recent round of buying started from. Apple opened the day at $600 and traded down throughout the day. Late afternoon trading brought the stock to close down $4.02 from yesterday at $585.56.

Apple, daily with support and volume

Technology research firm Gartner updated its estimates for global semiconductor revenue growth. The company had previously estimated growth around 2.2% but have raised estimates to 4% for 2012. The DRAM market is expected to see continued increases of sales and price increases which will help drive growth. NAND Flash is also expected to see significant growth in 2012 due to tablet, mobile and mainstream computing. The PHLX Semiconductor Sector index rose by around 2% today to close at 434.99. The index is moving up from support with momentum turning bullish.

SOX, daily with support and MACD

Intel Corporation (INTC), the world's largest producer of semiconductors, gained 1% on the revision. The stock is moving up from the 30 day exponential moving average but is facing resistance at $28 set back during the market decline in 2008. Momentum is bullish and could help the stock break through to the upside.

Intel, daily with resistance and MACD.

Microchip competitor Advanced Micro Devices (AMD) got an upgrade today on top of Gartners revenue revision. Market research firm Jefferies upgraded the stock to buy from hold based on valuation and risk/reward. The company has been gaining market share, especially in the low-end product and mobile devices segments. The stock surged over 6% today and closed at $8.23. The move took the stock above resistance at $8 with bullish momentum and increasing volume.

AMD, weekly with MACD, volume and resistance

The financial sector was strong today and built on gains made earlier in the week. The Financial Sector Spyder (XLF) broke above resistance Tuesday after results of the banking stress tests were released. The stock is making a strong move up from the previous resistance level and the 30 day moving average. The sector gained near 2% today and closed at $15.70. The bounce upward has supporting volume but faces resistance at $16. The top ten holdings of the ETF were up across the board led by Goldman Sachs (GS), Citigroup (C ) and JP Morgan (JPM).

XLF, weekly with support and resistance

Goldman Sachs gained $2.69 today. The stock is breaking above resistance at $120 with a spike in volume.

Goldman Sachs, daily with resistance and volume

Citigroup is making a similar move to Goldman Sachs, breaking out above resistance with high volume. The stock gained over a dollar today to close at $36.23

Citigroup, daily with resistance and volume

JP Morgan gained today as well and is a leader among the big financials. JP Morgan is trending about 20% higher than Citigroup and Goldman Sachs. This stock is also breaking out with increased volume.

JP Morgan, daily with resistance and volume

JP Morgan,compared to Citigroup and Goldman Sachs

Gold rebounded today following yesterday's 3% drop. The precious metal gained $15.80 to close at $1658.70 on the New York Mercantile Exchange. The CBOE Gold Index gained 0.59%, or 1.20 to close at 203.63. The index is at a new 12 month low and sitting on possible support.

CBOE Gold Index, daily with support

Oil prices dropped sharply midday on a faulty report of increased supply. Traders got wind of a possibility that the US and the UK reached an agreement to release oil from strategic reserves in an effort to curb rising prices. The White House quickly denied the report, stating that the topic has been discussed but that no decisions or agreements have been made. The price of crude quickly rebounded to make up the days losses. Natural gas inventories declined but the drop, though at the high end of the expected , was not a surprise. Total storage levels of natural gas remain at seasonal highs and The price remained steady.

30 year bond rates jumped to new highs opening today's trading. The yield declined throughout the session though to end the day only marginally higher.

30 year bond rates

During afternoon trading advancing stocks took the lead and brought the Dow Jones Average and S&P 500 to four year highs. The trend is up on the Dow and S&P. Momentum is bullish in the long term and just turn bullish and getting stronger in the short term. The next significant resistance level for the Dow Jones Index is 14,000. Transports, which gained 3.27%, led the markets in today's trading. Financials are looking strong in the wake of stress test results and helped lead the markets to new highs.

Dow Jones Average, monthly data

Dow Jones Average, daily data

Dow Jones Transports Index

The broader S&P 500 has been trending basically in line with the Dow Blue Chips but is slightly ahead for the year. The index traded higher throughout the day to end near session highs and close above 1,400 for the first time in four years. Both the Dow and the S&P 500 continue to lag the Nasdaq.

S&P 500 compared to the Dow and Nasdaq

S&P 500, trend is up

The Nasdaq also reached new highs today, led by semiconductors and device makers. The trend in this market is up long term and in the short. Strength among tech stocks is gaining support, Gartners revision of semiconductor revenue for 2012 may provide the basis for earnings revisions and positive surprises in the coming quarters for semiconductor makers. Device makers may also fare better than expected if they are going to be using more chips than previously forecast.

Nasdaq, daily data

Nasdaq, weekly data

A look at the Nasdaq index tracking stock, QQQ, shows a small but possibly significant increase in volume over the last three days.

Nasdaq Index Tracking Stock, QQQ

The economy seems to be improving as expected and the markets are responding. Things to look out for include new economic data and earnings. Tomorrow the CPI, Core CPI, Industrial Production, Capacity Utilization and Michigan Sentiment indicator are on tap.

Thomas Hughes


New Option Plays

Industrial Goods & Technology

by James Brown

Click here to email James Brown

Editor's Note:

In addition to tonight's new candidates, consider these stocks as possible trading ideas and watch list candidates:

(bullish candidates) IWM, JLL, MTB, PH, DVN, CP, MLM, WCC, SLXP, BRK.B, GS, CMI, and ADS


NEW DIRECTIONAL CALL PLAYS

Chart Industries - GTLS - close: 73.61 change: +1.58

Stop Loss: 69.75
Target(s): 79.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
GTLS is in the industrial goods sector. The stock has been stair-stepping higher since its broke out past resistance in the $61-63 zone. Now after a three-day consolidation sideways GTLS looks poised for new gains.

The all-time high from four days ago is $74.14. I am suggesting a trigger to buy calls at $74.25. We will use a stop loss at $69.75. Our exit target is $79.75. More aggressive traders could aim higher. The Point & Figure chart for GTLS is bullish with an $82 target.

Trigger @ 74.25

- Suggested Positions -

buy the Apr $75 call (GTLS1221D75) current ask $3.40

Annotated Chart:

Entry on March xx at $ xx.xx
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 712 thousand
Listed on March 15, 2012


IPG Photonics Corp. - IPGP - close: 55.85 change: +1.29

Stop Loss: 52.49
Target(s): 60.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
IPGP is a technology stock. Traders bought the dip near support at $50.00 and its 150-dma, 200-ema, and the 50-dma. Since then IPGP has managed to rally back above resistance near $55.00 and the rest of its major moving averages. Today's move looks like an entry point and further gains could spark a short squeeze. The most recent data listed short interest at 16.5% of the small 37.1 million share float.

I want to see a little more confirmation. I am suggesting a trigger to buy calls at $56.25 with a stop loss at $52.49, which is just under the 50-dma. Our target is $60.00 but more aggressive traders could aim higher.

Trigger @ $56.25

- Suggested Positions -

buy the Apr $60 call (IPGP1221D60) current ask $1.50

Annotated Chart:

Entry on March xx at $ xx.xx
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 763 thousand
Listed on March 15, 2012



In Play Updates and Reviews

S&P 500 Index Closes Over 1400

by James Brown

Click here to email James Brown

Editor's Note:

The U.S. markets are extending their gains. The S&P 500 is poised to mark its 10th weekly gain out of the last eleven weeks if the trend continues tomorrow.

Tomorrow could see a little volatility since it is a quadruple witching options expiration Friday.

Current Portfolio:


CALL Play Updates

Allergan Inc. - AGN - close: 94.18 change: +0.59

Stop Loss: 89.75
Target(s): 98.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
03/15 update: Hmm... our AGN trade is still not open yet. I am adjusting our entry point strategy since the current one is not working. We will instead choose to buy calls on a dip at $92.25.

We will start with a stop at $89.75. Our multi-week target is $98.00. FYI: The Point & Figure chart for AGN is bullish with a $110 target.

New buy-the-dip trigger @ 92.25

- Suggested Positions -

buy the Apr $95 call (AGN1221D95)

03/15/12 not open yet. New buy-the-dip trigger @ 92.25
03/14/12 not open yet. try again.

Entry on March xx at $ xx.xx
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on March 13, 2012


Airgas Inc. - ARG - close: 84.95 change: +0.98

Stop Loss: 81.75
Target(s): 87.00
Current Option Gain/Loss: (Mar82.5c: +45%) & Apr$85c: +24.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/15 update: ARG is extending its gains. Traders bought the dip near $84.00 midday. The stock rallied to a +1.1% gain and is now challenging potential round-number resistance at $85.00. I am not suggesting new positions at this time.

- Suggested Positions -

March position is closed.
Mar $82.50 call (ARG1217C82.5) Entry $1.00, exit $1.45 (+45%)

- or -

Long Apr $85.00 call (ARG1221D85) Entry $1.25

03/14/12 April $85 call play opened
Exited March $82.50 calls at the close (bid $1.45, +45%)
03/13/12 new stop loss @ 81.75
Buy April calls (see 2nd position) if ARG hits $84.05
Plan to sell our March calls at the closing bell tomorrow.
03/03/12 new stop loss @ 79.90
02/28/12 trade opened @ 82.21
02/27/12 not open yet, buy calls at the open tomorrow
02/24/12 not open yet, try again.

Entry on February 28 at $82.21
Earnings Date 05/07/12 (unconfirmed)
Average Daily Volume = 528 thousand
Listed on February 23, 2012


American Express Co - AXP - close: 56.72 change: +0.57

Stop Loss: 53.40
Target(s): 57.00
Current Option Gain/Loss: +83.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/15 update: Financial stocks continue to surge. AXP added another +1.0%. The intraday high today was $56.76. Our exit target is $57.00. Readers may want to start taking profits early right now. I am raising our stop loss up to $53.45.

Earlier Comments:
The plan was to keep our position size small.

- Suggested Positions - (Small Positions)

Long Apr 52.50 call (AXP1221D52.5) Entry $2.40

03/15/12 new stop loss @ 53.40
03/14/12 new stop loss @ 52.40, adjust exit to $57.00
03/03/12 new stop loss @ 51.40
02/29/12 AXP gapped down at $53.46
02/28/12 not open yet. buy calls at the open tomorrow.
02/27/12 not open yet, try again.

Entry on February 29 at $53.46
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on February 25, 2012


Clean Harbors, Inc. - CLH - close: 68.96 change: -0.02

Stop Loss: 66.75
Target(s): 71.50
Current Option Gain/Loss: +11.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/15 update: There is no change from my prior comments. CLH is still churning sideways under resistance near $70.00. Failure to breakout past $70 is worrisome. Readers may want to exit early now. I am not suggesting new positions at this time.

Earlier Comments:
Our target is $71.50 but more conservative traders may want to exit near $70.00. Aggressive trades could aim higher.

- Suggested Positions -

Long Apr $70 call (CLH1221D70) Entry $1.30

03/13/12 new stop loss @ 66.75
03/10/12 CLH is testing the $70.00 level. Readers may want to take profits now.

Entry on March 08 at $67.77
Earnings Date 05/02/12 (unconfirmed)
Average Daily Volume = 344 thousand
Listed on March 07, 2012


Capital One Financial - COF - close: 53.63 change: +1.30

Stop Loss: 49.75
Target(s): 54.75
Current Option Gain/Loss:(Mar$50c: +83.8%) & Apr$50c: +86.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/15 update: We are relatively lucky with our COF trade. Investors could have sold the stock on news out last night that COF would raise $1.25 billion in cash by selling 24.4 million shares of common stock today (at $51.65 a share). That's about 5% of its float. COF did see a small gap lower at the open but strength in the financials helped push shares to a +2.4% gain. Now I'm wishing we'd held on to our March calls for one more day.

The intraday high today was $54.20. Our exit target is $54.75. Please note that I am raising our stop loss to $49.75. I am not suggesting new positions at this time.

Earlier Comments:
We want to keep our position size small to limit our risk.

(small positions)

- Suggested Positions -

March position is closed.
Mar $50 call (COF1217C50) entry $1.30, exit $2.39 (+83.8%)

- or -

Long Apr $50 call (COF1221D50) entry $2.30

03/15/12 new stop loss @ 49.75
03/14/12 new stop loss @ 48.60
03/14/12 as planned, closed Mar $50 call, bid @ $2.39 (+83.8%)
03/13/12 prepare to exit March calls at the close tomorrow
03/03/12 new stop loss at $47.95
02/28/12 triggered at $50.25

Entry on February 28 at $50.25
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 6.4 million
Listed on February 15, 2012


FedEx Corp. - FDX - close: 94.61 change: +2.41

Stop Loss: 89.75
Target(s): 96.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
03/15 update: Sadly our new FDX trade is not open. Shares of FDX opened higher and then surged to a +2.6% gain. Yet the S&P 500 index ticked lower at the open and then bounced. Technically that doesn't meet our entry point requirement for both to open positive. I do not want to chase FDX here. We will adjust our entry point strategy to buy a dip at $92.75.

New buy-the-dip trigger @ 92.75

- Suggested Positions -

buy the Apr $95 call (FDX1221D95)

03/15/12 not open yet. new buy-the-dip trigger @ 92.75
03/14/12 not open yet. try again.

Entry on March xx at $ xx.xx
Earnings Date 03/22/12 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on March 13, 2012


Herbalife Ltd. - HLF - close: 69.90 change: +0.03

Stop Loss: 67.75
Target(s): 74.75
Current Option Gain/Loss: - 3.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/15 update: Our brand new trade on HLF has been opened. Shares rallied past the $70.00 level and hit new all-time highs. Our trigger to buy calls was hit at $70.50.

Our quick target is $74.75. More aggressive traders may want to aim higher. FYI: The Point & Figure chart for HLF is bullish with a long-term $103 target.

- Suggested Positions -

Long Apr $70 call (HLF1221D70) Entry $3.10

Entry on March 15 at $70.50
Earnings Date 05/02/12 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on March 14, 2012


Tractor Supply Co. - TSCO - close: 87.28 change: -0.35

Stop Loss: 85.75
Target(s): 94.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
03/15 update: I am growing more and more worried about TSCO. The larger trend is up but shares are not making any progress even though the major indices are in rally mode. The consolidation in TSCO under resistance near $88 is getting more and more narrow, which would suggest a breakout is imminent. If TSCO doesn't show some improvement tomorrow we will likely drop it.

Earlier Comments:
We want to keep our position size small. Our exit target is $94.00. More aggressive traders could aim higher. If you have enough patience you could aim for the $99-100 area instead. The Point & Figure chart for TSCO is bullish with a $109 target.

Trigger @ $88.75 (small positions)

- Suggested Positions -

buy the Apr $90 call (TSCO1221D90)

03/14/12 adjust trigger to $88.75
03/13/12 if triggered at $88.50, only use small positions, move stop loss to $85.75

Entry on March xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 566 thousand
Listed on March 10, 2012


Whole Foods Market - WFM - close: 85.49 change: +0.36

Stop Loss: 81.75
Target(s): 87.50
Current Option Gain/Loss: +33.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/15 update: WFM posted a minor gain that was inline with the S&P 500's advance. I am not suggesting new positions at this time.

Currently our exit target is $87.50. More aggressive traders may want to aim for the $89.50-90.00 zone instead.

- Suggested Positions -

Long Apr $85 call (WFM1221D85) Entry $1.88

03/13/12 new stop loss @ 81.75

Entry on March 02 at $82.55
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on March 01, 2012


PUT Play Updates

AMERIGROUP Corp. - AGP - close: 65.26 change: -0.27

Stop Loss: 68.05
Target(s): 61.00
Current Option Gain/Loss: (Mar$65P: -82.1%) & Apr$60P: -25.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/15 update: AGP continues to underperform the market and shares failed at resistance near $66.00 again. Yet the stock is not making any progress lower either. I am not suggesting new positions at this time.

- Suggested Positions -

March position is closed.
Mar $65 PUT (AGP1217o65) entry $1.40, exit $0.25 (-82.1%)

- or -

Long Apr $60 PUT (AGP1221p60) entry $1.20 <-- 0.90/1.10 -->

03/14/12 planned exit for the Mar.$65 put, bid @ 0.25 (-82.1%)
03/13/12 new stop loss at $68.05
prepare to exit the March $65 puts at the open tomorrow,
we will keep the April $60 puts active.
03/06/12 AGP gapped open lower at $66.00

Entry on March 06 at $66.00
Earnings Date 05/02/12 (unconfirmed)
Average Daily Volume = 950 thousand
Listed on March 05, 2012


Centene Corp. - CNC - close: 46.29 change: +0.81

Stop Loss: 46.25
Target(s): 40.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
03/15 update: CNC bounced from support near $45.00. Shares appear to be in a new $45-47 trading range. I don't see any changes from my prior comments.

I am suggesting a trigger to open bearish put positions at $44.75. This will require CNC to trade under its 50-dma and potential support at the $45.00 mark. If triggered we'll use a stop loss at $46.25. Our target is $40.50.

Trigger to buy PUTS @ $44.75

- Suggested Positions -

buy the Apr $45 PUT (CNC1221P45)

Entry on March xx at $ xx.xx
Earnings Date 04/24/12 (unconfirmed)
Average Daily Volume = 529 thousand
Listed on March 12, 2012


Edwards Lifesciences - EW - close: 70.01 change: +0.32

Stop Loss: 72.25
Target(s): 63.00
Current Option Gain/Loss: -45.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/15 update: EW sank at the open but recovered to close up +0.4%. Shares settled on round-number support/resistance at the $70.00 mark. I don't see any changes from my prior comments.

Earlier Comments:
You could argue the current five-day bounce in EW looks like a bear-flag pattern. I am not suggesting new positions at this time. More conservative traders may want to lower their stop loss.

- Suggested (Small) Positions -

Long Apr $65 PUT (EW1221p65) Entry $1.65

Entry on March 07 at $68.76
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on March 06, 2012


Joy Global, Inc. - JOY - close: 78.57 change: -0.07

Stop Loss: 81.65
Target(s): 72.50
Current Option Gain/Loss: -15.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/15 update: Our put play on JOY has been triggered. We had a trigger to buy puts at $77.75 but JOY gapped open lower at $77.38 this morning thanks to an analyst downgrade. The stock recovered and closed almost unchanged on the session. Shares remain inside the $78-82 trading range.

Our trade is open but the bounce back in JOY is troublesome. Wait for a new drop under $77.50 before considering new positions.

Earlier Comments:
Our target is $72.50. More aggressive traders could aim lower. The Point & Figure chart for JOY is bearish with a $70 target.

- Suggested Positions -

Long Apr $75 PUT (JOY1221P75) Entry $2.52

03/15/12 trade opened on JOY's gap down at $77.38, which is under our trigger to buy puts at $77.75.

Entry on March 15 at $77.38
Earnings Date 06/04/12 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on March 12, 2012