Editor's Note:

We have a couple of bullish candidates that really outperformed the market last week. I am suggesting readers take some profits early!


Closed Plays


None. No closed plays this week.


Play Updates


Arch Coal Inc. - ACI - close: 25.35 change: -0.17

The rally in coal stocks continues and ACI posted another weekly gain. Shares are now testing previous resistance near $26.00. I am still concerned that shares could be forming a bearish head-and-shoulders pattern (and it would be a large one). I'm not suggesting new bullish positions at this time. Our final target is $34.75.

May 14th, 2009 - entry price on ACI @ 16.00, option @ 2.40
symbol: OSE-AF, 2011 JAN $30 LEAP call - current bid/ask $2.15/2.25
-stop loss on ACI @ 19.85

--2nd Entry--
Feb 13th, 2010 - entry price on ACI @ 21.65, option @ 4.40
symbol: YEP1221A25 2012 JAN $25 LEAP call - current bid/ask $5.70/6.40
-stop loss on ACI @ 19.85

Chart of ACI:


Biogen IDEC - BIIB - close: 58.76 change: -0.02

The rally in biotech stocks continues. Check out a chart of the BTK biotech index. This sector is growing very overbought and due for a correction. While BIIB does not look as overbought as the BTK index if the sector corrects BIIB will likely pull back as well. Readers may want to wait for a dip back toward the $56-55 zone or the 50-dma before considering new bullish positions. Our first target to take profits is at $64.90.

Feb 19th, 2010 - entry price on BIIB @ 56.60, option @ 4.60
symbol: OIY1122A60 2011 JAN $60 LEAP call - current bid/ask $5.00/5.40
-stop loss on BIIB @ 51.85

Chart of BIIB:


Berkshire Hathaway Inc. - BRK.B - $82.24 -0.12

The rally in shares of Berkshire take a much needed rest. Shares consolidated sideways the last few days. A correction back toward the $78-75 region would be a normal pull back. If you're looking for an entry point I would wait. In the mean time more conservative traders may want to take some money off the table.

Our first target is $90.00. Our second target is $99.50

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 4.80
symbol: 2011 JAN $80 XPB1122A80 LEAP call - current bid/ask $7.70/8.20
-stop loss on BRK.B @ 69.00

Feb 6th, 2010 - entry price on BRK.B @ 73.57, option @ 6.50
symbol: 2012 JAN $85 WDW1221A85 LEAP call - current bid/ask $8.50/9.50
-stop loss on BRK.B @ 69.00

Chart of BRK.B:


BorgWarner Inc. - BWA - close: 37.08 change: +0.19

BWA has been correcting the last several days. I suggested readers look for a pull back into the $36-35 zone and we got it. The good news is that Thursday's intraday bounce and Friday's gain looks like a short-term bullish reversal. The bad news is that if the market corrects I would still expect BWA to trade lower. Traders may want to be patient here. We might get a entry point closer to $34.00 in the next week or two.

Our first target is $44.50. Our second target is $49.75. FYI: More conservative traders might want to use a stop loss closer to $34.00.

Feb 17th, 2010 - entry price on BWA @ 37.55, option @ 3.90
symbol: ZWY1122A40 2011 JAN $40 LEAP call - current bid/ask $3.20/4.40
-stop loss on BWA @ 32.49

Chart of BWA:


Celgene Corp. - CELG - close: 61.37 change: +0.07

Hmm... My concerns about CELG have not changed. There is a HUGE rally happening in the biotech sector and shares of CELG are not participating. Shares are consolidating sideways under the $62.00 level. When the sector corrects, and it will correct, CELG may suddenly choose to participate. Readers may want to wait and see how dip any correction is before launching positions. If you're the optimistic type then you may want to buy LEAPS on a move over $62.50.

This past week Reuters ran an article on Morningstar's top ten takeout (acquisition) targets in the biotech sector. CELG was number 5 on that list. Our target is the $74.00 level. I have been suggesting the 2011 Jan. $65 calls but readers may want to buy the 2012 calls.

Mar 1st, 2010 - entry price on CELG @ 60.75, option @ 5.40
symbol: VCS1122A65 2011 JAN $65 LEAP call - current bid/ask $5.20/5.60
-stop loss on CELG @ 54.75

Chart of CELG:


Chesapeake Energy Corp. - CHK - close: 25.64 change: -0.15

The price of natural gas has taken a nosedive lower in the last few weeks and it looks like it's starting to have an affect on shares of CHK. Shares of CHK are down three weeks in a row although this past week saw the stock spend most of its time moving sideways. I'll repeat my suggestion from a week ago. More nimble traders might consider buying a dip or bounce near the rising 200-dma. If CHK closes under the trendline of higher lows we may exit early. Our long-term target is $40.00.

Oct 30th, 2009 - entry price on CHK @ 24.00, option @ 4.70
2nd entry Feb. 6th, 2009 - entry on CHK @ 24.52, option @ 3.80
symbol: VEC-AE, JAN 2011 $25 LEAP call - current bid/ask $3.70/3.80
-stop loss on CHK @ 21.75

Chart of CHK:


Consol Energy Inc. - CNX - close: 54.33 change: +0.40

CNX has spent the last few days consolidating sideways under resistance near $55.00. I am concerned that if CNX retreats from current levels it will look like a bearish head-and-shoulders pattern and the market is overbought and due for a correction, which makes that a real possibility. I am not suggesting new positions at this time.

CNX hit our first target back in September. Currently the plan is to sell another portion of our position at $58.50. Our third and final target is $64.90.

Sep 1st, 2009 - entry price on CNX @ 36.50, option @ 7.80(estimate)
symbol: VTL-AH, 2011 JAN $40 LEAP call - current bid/ask $16.90/17.50
-stop loss on CNX @ 43.45

1st Target hit 09/16/09 @ 48.50, option price $15.40 (+97%)

Chart of CNX


Deluxe Corp. - DLX - close: 19.13 change: -0.14

Thanks to a moderately bullish market last week shares of DLX did not see much follow through on its bearish reversal under $20. Instead shares have been consolidating sideways. The lack of profit taking is encouraging but if the broader market does correct I would expect DLX to correct with it. I am suggesting readers wait on new positions. Let's wait and see if DLX bounces from the $18 level again or closes above $20.00. Our target is $24.75.

Mar 1st, 2010 - entry price on DLX @ 19.10, option @ 1.10
symbol: DLX1016J20 2010 OCT $20 call - current bid/ask $1.20/1.55
-stop loss on DLX @ 16.75

Chart of DLX:


EMR $48.09 +0.14 -- Emerson Electric Co.

Shares of EMR are still not participating in the market's recent strength. The overall trend is still up and shares needed to consolidate. If the broader market does correct I would look for EMR to dip toward the 50-dma or possibly the $44.00 area. Our second and final target is still $54.50. I am not suggesting new positions at this time.

Sept. 8th, 2009 - entry price on EMR @ 38.00, option @ $4.50
symbol: VHH-AH, 2011 JAN $40 call - current bid/ask $9.10/ 9.50
-stop loss on EMR @ 41.90

02/18/10 1st Target hit @ 47.50, option @ $8.80 (+95.5%)

Chart of EMR:


Fortune Brands - FO - close: 47.34 change: +0.13

FO is a new addition to the play list. The stock was added to our watch list a week ago. I suggested investors buy a breakout over $47.55. On Friday the stock hit $47.56 so the play is now open. Unfortunately, we could be the victim of bad timing here. FO inches to a new 52-week high with the major market indices looking overbought and due for a correction. While this play is "open" I would wait on launching positions. Odds are good that we could get a better entry point near $45.00 or even $44.00 in the next week or two. Our target is $62.00.

Mar. 12th, 2009 - entry price on FO @ 47.55, option @ $2.20
symbol: FO1018I50 SEP 2010 $50 call - current bid/ask $2.00/ 2.20
-stop loss on FO @ 39.95

Chart of FO:


Forest Oil Corp. - FST - close: 29.42 change: +0.72

FST displayed some relative strength on Friday with a 2.5% gain compared to a +0.7% gain for the OSX index and a -0.05% loss for the OIX index. The stock had been consolidating sideways for over a week so the breakout is certainly bullish. Yet shares are now facing potential round-number, psychological resistance at $30.00. I am not suggesting new positions at this time. Our long-term target is $37.50. Please note our new stop at $23.45.

Oct 15th, 2009 - entry price on FST @ 23.85, option @ 7.40
symbol: OJG-AD, 2011 $20 LEAP call - current bid/ask $10.20/10.90
-stop loss on FST @ 23.45 *new*

Chart of FST:


Intel Corp. - INTC - close: 21.27 change: +0.02

The NASDAQ and the Russell 2000 have broken out to new 52-week highs yet the SOX semiconductor index has not. The chips normally lead the tech sector but this time they are lagging. That might change if INTC can breakout past its 2010 highs near $21.50. I am not suggesting new positions at this time.

Our long-term target is the $24-26 zone.

NOTE: I couldn't get any current option quotes on INTC this weekend. I am listing the last trade for the 2011 LEAPS below ($2.68).

FYI: Shares of Intel don't move very fast. Readers might want to consider turning this play into a calendar or diagonal spread to further maximize your gains.

June 13th, 2009 - entry price on INTC @ 16.31, option @ 1.36
symbol: VNL-AD, 2011 LEAP $20 call - current bid/ask $2.68/2.68
-stop loss on INTC @ 17.90.

Chart of INTC:


Mosaic Co. -MOS - close: $63.80 change: +3.87

Positive comments from POT about the state of the fertilizer business sent many of the agriculture/chemical names higher on Friday. Shares of MOS gapped open higher and closed with a 6.4% gain. The news is certainly very bullish but I am not suggesting new positions on this spike higher. Our long-term target is the $90-100 zone. (Readers might want to consider the 2012 LEAPS too).

NOTE: In 2009 MOS issued a special cash dividend of $1.30 per share payable back on December 3rd, 2009. The CBOE issued a new LEAPS symbol to account for the dividend. The old 2011 LEAPS have a root symbol of ZHX. The LEAPS we want to use are the ZXW root symbols.

Jan 28th, 2010 - entry price on MOS @ 56.00, option @ 6.10
symbol: ZXW-AM, 2011 LEAP $65 call - current bid/ask $8.80/9.10
-stop loss on MOS @ 51.90

Chart of MOS:


Manitowoc Inc. - MTW - close: 12.68 change: +0.20

The rally seems to be losing a little steam in MTW. The trend is still bullish but shares have been stuck under resistance near $13.00. If the market corrects I would not be surprised to see MTW retest its 100-dma. I am not suggesting new positions at this time. Please note our new stop loss at $9.85. Our long-term target is $17.00.

Oct 30th, 2009 - entry price on MTW @ 9.10, option @ 2.61
symbol: VMT-AB, 2011 JAN $10 call - current bid/ask $3.60/3.90
-stop loss on MWT @ 9.85 *new*

01/18/10 Sell Half! MTW @ 13.70, option at $4.80 bid (+83.9%)

- or -

Oct. 30th 2009 - entry price on MTW (the stock) @ 9.10
- stop loss on MTW @ 9.85

01/18/10 Sell Half! MTW @ 13.70 (+50.5%)

Chart of MTW:


Oracle Corp. - ORCL - close: 25.05 change: +0.19

Technology stocks have helped lead the market higher but ORCL has unfortunately sat out on the latest push higher. Shares managed a 10-cent gain for the week. While the trend is up I do not expect ORCL to sit out any market correction. I would expect a pull back toward $23.00. Our long-term target is $29.75.

Earnings are expected at the end of March. Readers may want to wait until after the earnings report before considering new positions.

FYI: Shares of ORCL don't move very fast. Readers might want to consider turning this play into a calendar or diagonal spread to further maximize your gains.

Dec. 18th, 2009 - entry price on ORCL @ 24.05, option @ 2.55
symbol: VOC-AE, 2011 LEAP $25 call - current bid/ask $2.42/2.46
-stop loss on ORCL @ 21.40.

Chart of ORCL:


PEPSICO Inc. - PEP - close: 65.10 change: +0.13

After several days of consolidating near $64 and its early December 2009 high shares of PEP have finally broken out higher. This is a bullish development and reduces the risk of PEP forming a bearish double top. Unfortunately it does not reduce the chance of PEP correcting if the market pulls back. On a short-term basis PEP should find support near $63.75 and near $63.00. Our exit target for the 2011 January $60 LEAP is $69.90. If you have the 2012 LEAPS then you might want to aim higher.

Our protective put (March $55) will expire worthless in five days.

July 7th, 2009 - entry price on PEP @ 57.25, option @ $4.50(estimate)
symbol: VP-AL, 2011 $60.00 LEAP call - current bid/ask $7.10/7.20
-stop loss on PEP at $57.40

Temporary protective put:
Jan. 23rd, 2009 - entry price on PEP @ 60.39, option @ 0.50
symbol: PEP-OK March $55 put - current bid/ask $0.01/0.04

Chart of PEP:


Potash Corp. - POT - close: $125.27 change: +8.34

POT soared to new eight-week highs on Friday after the company's CEO Bill Doyle issued some strong statements. Doyle believes that the distributor pipeline for their product has been depleted and business should see a strong rebound in 2010. The company raised their earnings guidance from the $0.70-1.00 range to $1.30-1.50 range for the year. Analysts were only expecting $0.87.

The stock stalled at resistance near $125-126. While I expect POT will eventually move higher I am suggesting we take advantage of this temporary pop higher and sell half our position now! I am raising our stop loss to $99.50. More conservative traders may want to use a stop closer to $105 or $110. Our long-term final target is $160 or higher.

Jan. 28th, 2010 - entry price on POT @ 101.00, option @ 11.75
symbol: VPT-AB, 2011 LEAP $110 call - current bid/ask $26.35/26.75
-stop loss on POT @ 99.50 *new*

SELL HALF (03/13/10) option @ $26.35 bid (+124%)

Chart of POT:


PartnerRe Ltd. - PRE - close: 78.32 change: -0.22

The correction in PRE continues. The stock appears to be building a bull flag pattern. I don't think the pull back is over yet. If the market corrects PRE could dip toward the $76-75 zone. Look for a dip or a bounce there as an entry point.

Our first target is $84.90. Our second, longer-term target is $97.50.

Feb. 13th, 2010 - entry price on PRE @ 76.28, option @ 2.70
symbol: PRE1021H80, 2010 AUG $80 call - current bid/ask $2.85/3.50
-stop loss on PRE @ 69.75

Chart of PRE:


Reynolds American Inc. - RAI - close: 52.31 change: -0.46

What a difference a week makes! A week ago RAI was setting new closing highs. Something happened last Monday. I could not find any news to explain the sudden reversal lower. I would assume it is some sort of new litigation or a negative twist for any ongoing litigation for the tobacco industry to affect RAI like this. More conservative traders may want to abandon ship early. I am not suggesting new bullish positions at this time. At the moment our final exit target is $57.50.

July 24th, 2009 - entry price on RAI @ 42.50, option @ $4.50(estimate)
symbol: OWO-AH, 2011 JAN $40.00 LEAP call - current bid/ask $12.10/13.00
-stop loss on RAI at $49.75

Sold Half on 10/19 @ 49.50, option @ $8.90 (+97%)

Chart of RAI:


UltraShort 20+ Year Treasury Bond ProShares - TBT - cls: 47.87 chg: -0.58

The consolidation in the TBT is narrowing. Shares of this ETF produced a lower high near its 200-dma last week, which is bearish. Given the neutral pattern of higher lows and lower highs (a pennant shape) the breakout could go either way. Fundamentally bonds should eventually go down and yields go up as the U.S. debt gets too high but this could take months or years to really get moving. I'm suggesting readers wait for a close over $51.50 before considering new LEAPS positions.

Our first long-term target is $59.75. Our second target is $67.50.

FYI: The TBT is an exchange traded fund (ETF) that tries to deliver twice the inverse performance of the Barclays Capital 20+ Year U.S. Treasury index.

Jan. 09th, 2010 - entry price on TBT @ 50.63, option @ 4.90
symbol: XRJ-AC, JAN 2011 $55 LEAP call - current bid/ask $2.10/2.30
-stop loss on TBT @ 45.90

Jan. 09th, 2010 - entry price on TBT @ 50.63, option @ 7.90
symbol: YHT-AH, JAN 2012 $60 LEAP call - current bid/ask $4.45/4.70
-stop loss on TBT @ 45.90

Chart of TBT


Titanium Metals - TIE - close: 14.13 change: +0.58

TIE managed another weekly gain but momentum is slowing a bit. The stock looks a little overbought given its bounce from the 100-dma over two weeks ago. I would expect a correction, probably toward the $13.00-12.00 region.

There is some resistance near $15.00 but our long-term target is $19.75.

Feb. 20th, 2010 - entry price on TIE @ 12.06, option @ 1.40
symbol: VWN1122A15, 2011 JAN $15 LEAP call - current bid/ask $2.05/2.20
-stop loss on TIE @ 10.45

Feb. 20th, 2010 - entry price on TIE @ 12.06, option @ 2.60
symbol: WWN1221A15, 2012 JAN $15 LEAP call - current bid/ask $3.30/3.60
-stop loss on TIE @ 10.45

Chart of TIE:


iShares 20+Yr Bond ETF - TLT - close: 90.48 change: +0.56

The consolidation in the TLT continues to narrow. Given the prevailing trend shares of this ETF should break lower but there is no guarantee. I am not suggesting new positions at this time. A close under $88 might change my mind. Our first target is $81.00.

FYI: The TLT is an exchange traded fund that tries to mimic the performance of the Barclays Capital U.S. 20+Year Treasury Bond Index.

Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 6.40
symbol: VJL-MG, JAN 2011 $85 LEAP put - current bid/ask $3.55/3.70
-stop loss on TLT @ 94.15

Jan. 09th, 2010 - entry price on TLT @ 89.29, option @ 8.90
symbol: YLI-MB, JAN 2012 $80 LEAP put - current bid/ask $5.85/6.25
-stop loss on TLT @ 94.15

Chart of TLT


UnitedHealth Group Inc. - UNH - close: 32.91 change: -0.59

It looks like the rally in healthcare stocks has stalled. Investors are waiting to see how this latest push for healthcare reform in Washington shapes up. If UNH does dip toward support near $30.00 I would still consider new bullish positions but at this point I would probably wait for a bounce first.

The plan was to use small positions to limit our risk. Our long-term target is $42.50.

Dec 16th, 2009 - entry price on UNH @ 31.55, option @ 3.80
symbol: VUH-AG, 2011 JAN $35 LEAP call - current bid/ask $3.30/3.40
-stop loss on UNH @ 28.95

Chart of UNH:


Visa Inc. - V - close: 93.25 change: +0.51

We listed Visa on the watch list a week ago. It looked like shares were poised to breakout and breakout they did. The $90.00 level was major resistance and has been since mid 2008. I suggested traders buy LEAPS if Visa hit $91.00 and the stock did so on Tuesday. The 2011 January $100 calls were around $4.60. Visa's breakout and follow through rally is very bullish. However, we are concerned that the market is overbought and due for a dip. I am suggesting that readers wait for a dip back toward $90.00 or even $88.00 before launching new positions again. The $100 level could be round-number resistance but our target is $109.00. Investors might want to consider the 2012 LEAPS instead. Please note our stop loss at $81.75.

Mar 9th, 2009 - entry price on V @ 91.00, option @ 4.60
symbol: VSK1122A100 JAN 2011 $100 LEAP call - current bid/ask $5.65/5.75
-stop loss on V @ 81.75

Chart of V:


VICOR Corp. - VICR - close: 11.80 change: -0.17

VICR reported better than expected earnings on Tuesday night and the stock soared on Wednesday. Shares hit new 18-month highs. I am suggesting we take advantage of this move and sell half of our position, especially now since the market looks overbought and due for a pull back. I am not suggesting new positions at this time.

Our final long-term target is $13.50 (one reason I prefer the stock over the option). Please note our new stop loss at $8.80.

Dec 26th, 2009 - entry price on VICR@ 9.30, option @ 1.40
symbol: VQV-GB, 2010 JUL $10 call - current bid/ask $2.10/2.40
-stop loss on VICR @ 8.80 *new*

SELL HALF (03/13/10) option @ $2.10 (+50%)

--2nd Entry Point-- Feb 6th, 2009 - entry price on VICR @ 8.38, option @ 0.70
symbol: VQV-GB, 2010 JUL $10 call - current bid/ask $2.10/2.40
-stop loss on VICR @ 8.80 *new*

SELL HALF (03/13/10) option @ $2.10 (+200%)

- or -

Dec. 26th 2009 - entry price on VICR (the stock) @ 9.30
-stop loss on VICR @ 8.80

SELL HALF (03/13/10) stock @ $11.80 (+26.8%)

Chart of VICR:


Wal-Mart Stores Inc. - WMT - close: 53.90 change: -0.07

The sideways consolidation in WMT is narrowing. I'd like to think the stock is going to breakout higher but with the market overbought and due for a pull back WMT could retreat as well, although the stock has failed to participate in the market's rally one can hope it will not participate in the correction. Readers have plenty of choices. You could wait for a dip toward $52.00 or wait for a close over $55.00 as your entry point. It depends on your style and personal preference.

This is a long-term trade. WMT doesn't move very fast. Our long-term target is the $63.00 level. The Point & Figure chart is more optimistic with a $68 target. Since WMT does not move very fast readers may want to supplement their position by turning it into a calendar spread or a diagonal spread to enhance their gains.

Mar 7th, 2009 - entry price on WMT @ 54.14, option @ 4.60
symbol: WWT1221A55 JAN 2012 $55 LEAP call - current bid/ask $4.55/4.70
-stop loss on WMT @ 49.45

Chart of WMT