Editor's Note:

The stock market's rally has been impressive. We want to take advantage of this strength. I am suggesting we exit some of our 2014 calls in F and HON.

Plus we want to exit our MRK trade immediately.
See play updates for details.


Closed Plays


Macy's (M) was closed as planned on May 13th. We closed the option with a +60% rise in value.



Play Updates


Bank of America - BAC - close: 13.43

Comments:
05/18/13: Shares of BAC are stair-stepping higher from $12.00 to $13.00 and now to $13.50. The rally has paused right on a five-month trend line of higher highs starting from early January this year. Financials have been a big part of this rally but I suspect BAC is poised for a pullback. I am not suggesting new positions at this time.

- Suggested Positions -
MAR 18, 2013 - entry price on BAC @ 12.29, option @ 0.44
symbol: BAC1418a15 2014 JAN $15 call - current bid/ask $0.57/0.58

- or -

MAR 18, 2013 - entry price on BAC @ 12.29, option @ 1.13
symbol: BAC1517a15 2015 JAN $15 call - current bid/ask $1.42/1.43

05/04/13 BAC did not participate in the market's rally this past week. Investors should turn more defensive here.

Current Target:$ 18.00
Current Stop loss: 10.90
Play Entered on: 03/18/13

Originally listed on the Watch List: 03/09/13


Bed Bath & Beyond - BBBY - close: 69.11

Comments:
05/18/13: Warning! Shares of BBBY could be in trouble. The up trend stalled this past week. A number of retail stocks were struggling the last few days. BBBY broke down below its 10-dma but traders bought the dip near $68 and its 20-dma.

I am concerned that BBBY is about to see a correction lower and it could be painful. Do not be surprised to see a pullback toward $66 and its 50-dma. More conservative investors might want to just take profits right now instead of enduring the decline.

- Suggested Positions -
MAR 21, 2013 - entry price on BBBY @ 63.06, option @ 5.20
symbol: BBBY1418a65 2014 JAN $65 call - current bid/ask $7.95/8.05

05/18/13 BBBY could be poised for a painful pullback here.
05/11/13 new stop loss @ 64.65
05/04/13 new stop loss @ 63.75
04/13/13 new stop loss @ 62.25
03/30/13 Nimble traders could exit now (for a small profit) and re-enter positions on a pullback.
03/21/13 trade opens with BBBY opening at $63.06
03/20/13 BBBY meets our entry requirement (close over $62.50) with a close at $63.34

Current Target:$ 74.50
Current Stop loss: 64.65
Play Entered on: 03/21/13
Originally listed on the Watch List: 03/16/13


Dollar Tree, Inc. - DLTR - close: 49.76

Comments:
05/18/13: DLTR gained about half a point for the week. Wednesday's move was bullish with a breakout past resistance at $50.00. Yet there was no follow through on Thursday or Friday. DLTR might be stuck, hovering near $50.00, until the company reports earnings.

Earnings will be here soon and more conservative investors will need to seriously consider taking profits now, prior to the announcement, since an earnings disappointment could spark a sharp move lower. DLTR is scheduled to announce earnings on May 23rd, before the opening bell. Wall Street is looking for a profit of 57 cents a share.

- Suggested Positions -
FEB 28, 2013 - entry price on DLTR @ 45.25, option @ 4.76
symbol:DLTR1418a45 2014 JAN $45 call - current bid/ask $ 7.10/7.30

05/18/13 Readers may want to take profits prior to the earnings report
04/13/13 new stop loss @ 44.75
03/30/13 new stop loss @ 43.45
More conservative investors might want to take profits as DLTR moves into the $49-50 zone.
03/16/13 new stop loss @ 41.40
02/28/13 trade opened following gap higher, above our trigger

Current Target: $53.50
Current Stop loss: 44.75
Play Entered on: 02/28/13
Originally listed on the Watch List: 02/23/13


Ford Motor Co. - F - close: 15.08

Comments:
05/18/13: Ford continues to impressive with another big rally last week. The stock is up four weeks in a row and has now broken out past resistance at its January 2013 highs.

The stock does look short-term overbought here. I am suggesting we go ahead and exit our 2014 January calls, which have doubled in value, and close this position on Monday morning, May 20th. We will keep the 2015 calls open but raise the stop loss to $13.40.

Earlier Comments:
Our long-term target is $16.50. You could certainly aim higher. Currently the Point & Figure chart is forecasting a $24.50 target.

- Suggested Positions -
APR 29, 2013 - entry price on F @ 13.73, option @ 0.60
symbol: F1418a15 2014 JAN $15 call - current bid/ask $ 1.19/1.21

- or -

APR 29, 2013 - entry price on F @ 13.73, option @ 1.22
symbol: F1517a15 2015 JAN $15 call - current bid/ask $ 1.84/1.88

05/18/13 prepare to exit the 2014 calls on Monday, May 20th
05/18/13 new stop loss @ 13.40

Current Target:$ 16.50
Current Stop loss: 13.40
Play Entered on: 04/29/13
Originally listed on the Watch List: 04/20/13


Honeywell Intl. - HON - close: 80.75

Comments:
05/18/13: Shares of HON have been screaming higher. The stock's rally in the month of May has been nearly non-stop. Our 2014 calls have almost doubled already.

HON stock is overbought and due for some profit taking. I am suggesting we go ahead and exit our 2014 calls immediately to lock in gains now. More aggressive traders may want to hold on and see if HON can hit $82 and then exit the 2014 calls there instead. We will leave the 2015 calls open but I am raising the stop loss to $74.50.

Earlier Comments:
Let's keep our position size small to start.

- Suggested Positions -
MAY 07, 2013 - entry price on HON @ 76.20, option @ 2.68
symbol: HON1418a80 2014 JAN $80 call - current bid/ask $ 5.10/5.20

- or -

MAY 07, 2013 - entry price on HON @ 76.20, option @ 4.10
symbol: HON1517a85 2015 JAN $85 call - current bid/ask $ 6.15/6.35

05/18/13 prepare to exit 2014 Jan. calls immediately on Monday, May 20th
05/18/13 new stop loss @ 74.50
05/07/13 Our trade opens
05/06/13 HON meets our entry requirement with a close above $76.00

Current Target:$ 95.00
Current Stop loss: 74.50
Play Entered on: 05/07/13
Originally listed on the Watch List: 05/04/13


Intel Corp. - INTC - close: 24.04

Comments:
05/18/13: It looks like the rally in INTC has stalled. I'm not surprised and last week warned readers that INTC was overbought. After a huge, five-week rally INTC was due for some profit taking. The profit taking may not be over yet. If the market pulls back I would expect INTC to see a dip toward $23.00 or possibly $22.50.

Earlier Comments:
Our long-term target is $26.50 but we may have to exit our 2014 calls before then.

- Suggested Positions -
APR 24, 2013 - entry price on INTC @ 23.28, option @ 0.89
symbol:INTC1418a25 2014 JAN $25 call - current bid/ask $ 1.10/1.12

- or -

APR 24, 2013 - entry price on INTC @ 23.28, option @ 1.74
symbol:INTC1517a25 2015 JAN $25 call - current bid/ask $ 1.94/1.99

05/18/13 The rally has stalled. INTC might correct lower soon
05/11/13 new stop loss @ 21.90

Current Target: $26.50
Current Stop loss: 21.90
Play Entered on: 04/24/13
Originally listed on the Watch List: 04/20/13


The Coca-Cola Company - KO - close: 42.97

Comments:
05/18/13: KO managed a breakout to new multi-year highs on Thursday but profit taking pulled it lower again on Friday. It looks like KO is in the process of breaking out from its four-week consolidation in the $41.50-43.00 range. I don't see any changes from my prior comments. Our exit target remains $44.00 but more aggressive traders may want to seriously consider aiming higher!

Earlier Comments:
KO's all-time high is $44.47 from July 1998. We are leaving the long-term exit target at $44.00.

- Suggested Positions -
(closed 2014 calls on April 1st, 2013 at the open)
FEB 12, 2013 - entry price on KO @ 38.05, option @ 1.01
symbol: KO1418a40 2014 JAN $40 call - exit $1.97 (+95.0%)

- or -

FEB 12, 2013 - entry price on KO @ 38.05, option @ 1.75
symbol: KO1517a40 2015 JAN $40 call - current bid/ask $5.00/5.15

04/20/13 new stop loss @ 39.65, readers may want to take profits now.
04/01/13 exited 2014 calls at the open. Option @ $1.97 (+95.0%)
03/30/13 prepare to exit our 2014 Jan $40 calls on Monday, April 1st, 2013 at the opening bell to lock in gains. Current bid is $2.09.
03/30/13 new stop loss @ 38.25
03/23/13 new stop loss @ 37.65
Our 2014 calls have almost doubled and readers may want to take profits early right now

Current Target: $44.00
Current Stop loss: 39.65
Play Entered on: 02/12/13
Originally listed on the Watch List: 02/09/13


Lowe's Companies - LOW - close: 42.67

Comments:
05/18/13: LOW could see some profit taking soon. The sprint higher in LOW is stalling a bit. The stock could be out of breath and needs to pause. The company reports earnings on Wednesday, May 22nd and investors could use the news to sell and lock in gains. LOW's report comes out before the opening bell. Wall Street expects a profit of 51 cents a share.

Broken resistance near $40.00 should be new support. I am raising our stop loss up to $39.00.

Earlier Comments:
NOTE: LOW's main rival, Home Depot (HD), reports earnings on May 21st. Shares of LOW could react to HD's results.

- Suggested Positions -
MAY 07, 2013 - entry price on LOW @ 40.87, option @ 1.57
symbol: LOW1418a45 2014 JAN $45 call - current bid/ask $ 2.22/2.28

- or -

MAY 07, 2013 - entry price on LOW @ 40.87, option @ 3.52
symbol: LOW1517a45 2015 JAN $45 call - current bid/ask $ 4.35/4.50

05/18/13 new stop loss @ 39.00, LOW could see a pullback after its earnings report
05/07/13 Our trade opens.
05/06/13 LOW meets our entry requirement with a close above $40.25

Current Target: $49.50
Current Stop loss: 39.00
Play Entered on: 05/07/13
Originally listed on the Watch List: 05/04/13


Merck & Co. - MRK - close: 45.99

Comments:
05/18/13: I am concerned about our MRK trade. The stock has been underperforming many of its peers and the broader market. Shares only gained four cents for the week. The stock action this past week looks like a failed rally at resistance near $47.00.

I am suggesting we exit our remaining positions, the 2015 calls, immediately on Monday morning, May 20th.

- Suggested Positions -
(closed 2014 call position on April 15, 2013)
MAR 13, 2013 - entry price on MRK @ 44.54, option @ 2.06
symbol: MRK1418a45 2014 JAN $45 call - exit $3.60 (+74.7%)

- or -

MAR 13, 2013 - entry price on MRK @ 44.54, option @ 3.60
symbol: MRK1517a45 2015 JAN $45 call - current bid/ask $4.35/4.50

05/18/13 prepare to exit immediately on May 20th at the open
05/11/13 new stop loss @ 43.90
05/01/13 MRK lowered its 2013 guidance
04/15/13 closed 2014 calls
04/13/13 prepare to exit 2014 calls on Monday, April 15th at the opening bell.
new stop loss @ 43.40 and new target of $53.50 for 2015 calls.
03/30/13 MRK is not participating in the market's rally or drug sector rally. Investors will want to turn more defensive here.
03/16/13 use the dip to $44.00 as another entry point to buy calls
03/13/13 trade opens with MRK gapping down at $44.54
03/12/13 MRK gaps open higher and closed at $45.04, above our suggested entry (close above $44.25).

Current Target: $53.50
Current Stop loss: 43.90
Play Entered on: 03/13/13
Originally listed on the Watch List: 02/23/13


Marvell Technology - MRVL - close: 11.43

Comments:
05/18/13: MRVL was a watch list candidate that has graduated to our active play list.

The bullish market has allowed MRVL to keep the rally going. The stock is up several days in a row and shares hit our intraday trigger to buy calls at $11.25 this past week. If you missed the entry I would consider waiting for a dip back toward $11.00 since broken resistance at $11 should be new support. Plus, MRVL is due to report earnings on May 23rd. Earlier I cautioned more conservative investors to wait until after we see how the market reacts to MRVL's earnings before initiating positions.

MRVL's earnings are scheduled for Thursday, May 23rd, after the closing bell. Analysts are estimating 14 cents a share.

- Suggested *Small* Positions -
MAY 13, 2013 - entry price on MRVL @ 11.25, option @ 0.78
symbol: MRVL1418a13 2014 JAN $13 call - current bid/ask $0.83/0.85

- or -

MAY 13, 2013 - entry price on MRVL @ 11.25, option @ 0.97
symbol: MRVL1517a15 2015 JAN $15 call - current bid/ask $0.97/1.13

Chart of MRVL:

Current Target: $15.00
Current Stop loss: 10.25
Play Entered on: 05/13/13
Originally listed on the Watch List: 05/04/13


NetApp, Inc. - NTAP - close: 37.84

Comments:
05/18/13: NTAP was a watch list candidate that has graduated to our active play list.

NTAP has broken out past resistance as we expected. Unfortunately the recent volatility has produced an unsatisfactory entry point. I cautioned readers that CSCO's earnings report could move shares of NTAP. Sure enough both CSCO and NTAP exploded higher on Thursday, following CSCO's report. NTAP surged from $36.23 to 38.46 (a +6% gain on Thursday). Our plan was to wait for shares of NTAP to close above $37.15 and then buy calls the next day. That means our trade opened on Friday morning with NTAP gapping open even higher at $38.93. The stock almost immediately reversed lower in profit taking.

I am still bullish on NTAP. The stock appears to have broken out from a major bottoming pattern. Yet short-term the stock is overbought and likely to retrace back down toward $37.00 or $36.00. I would wait for the pullback or possibly a bounce from the $37-36 area before initiating new positions.

I am adjusting our stop loss to $34.90.

Earlier Comments:
FYI: NTAP's point & figure chart is bullish with a $58 target.

- Suggested *Small* Positions -
MAY 17, 2013 - entry price on NTAP @ 38.93, option @ 3.35
symbol: NTAP1418a40 2014 JAN $40 call - current bid/ask $2.70/2.79

- or -

MAY 17, 2013 - entry price on NTAP @ 38.93, option @ 5.20
symbol: NTAP1517a40 2015 JAN $40 call - current bid/ask $4.50/4.75

05/18/13 adjust stop loss to $34.90
05/17/13 trade opens on NTAP's gap open higher at $38.93
05/16/13 NTAP met our entry requirement with a close above $37.15

Chart of NTAP:

Current Target: $44.75
Current Stop loss: 34.90
Play Entered on: 05/17/13
Originally listed on the Watch List: 05/11/13


U.S. Oil (ETF) - USO - close: 34.21

Comments:
05/18/13: I am urging a lot of caution here with our USO put play. The ETF is not cooperating. The U.S. dollar is surging higher and we have record levels of oil inventories in the U.S. If that wasn't enough we have declining economic activity. Those three factors combined should be pulling oil prices lower! Yet the USO has rebounded off its mid-week lows. This is very perplexing. The USO is about to hit technical resistance at its simple 300-dma soon near $34.25. A close over this moving average would be bullish and nimble investors could use that as a signal to exit.

Right now we have a stop loss at $35.05. I am adjusting our stop loss strategy to: if we see the USO close above $34.50, then exit immediately the next day! I am not suggesting new positions at this time.

NOTE: Right now this is a put play with 2013 September puts.

Earlier Comments:
There is still a significant risk that Israel and Iran eventually start shooting at each other as Israel tries to stop Iran's nuclear weapons program. If that happens oil will definitely skyrocket higher. However, no one expects any Israel/Iran conflict until late summer. Oil could plunge to new relative lows before that happens.

This is a PUT play

- Suggested Positions -
APR 15, 2013 - entry price on USO @ 31.94, option @ 1.39
symbol: USO1321u30 2013 SEP $30 PUT - current bid/ask $ 0.52/ 0.55

05/18/13 adjust stop loss strategy to: if we see the USO close above $34.50, then exit immediately the next day!

Current Target:$ 29.50
Current Stop loss: see above
Play Entered on: 04/15/13
Originally listed on the Watch List: 04/06/13


Vodafone Group - VOD - close: 30.23

Comments:
05/18/13: VZ was threatening to stop the dividend in Verizon Wireless, its joint venture with VOD. Yet the company has backed down and now VOD will collect a $3.2 billion dividend from the joint venture. This news may have helped shares of VOD. Overall it appears that VOD is underperforming the broader market. Although the current rebound from Tuesday's low does appear to have broken through the short-term down trend. If you're feeling optimistic the pullback might look like a bull-flag pattern.

I remain cautious here and I'm not suggesting new positions at this time. More conservative traders may want to raise their stop closer to $29.50 instead.

- Suggested Positions -
APR 26, 2013 - entry price on VOD @ 30.63, option @ 2.07
symbol: VOD1418a30 2014 JAN $30 PUT - current bid/ask $ 1.80/ 1.90

- or -

APR 26, 2013 - entry price on VOD @ 30.63, option @ 1.00
symbol: VOD1517a35 2015 JAN $35 PUT - current bid/ask $ 0.90/ 1.15

05/11/13 new stop loss @ 28.90

Current Target:$36.00
Current Stop loss: 28.90
Play Entered on: 04/26/13
Originally listed on the Watch List: 04/20/13


Wal-Mart Stores - WMT - close: 77.87

Comments:
05/18/13: After several weeks of consolidating sideways WMT was in breakout mode on Wednesday. Unfortunately the breakout higher was short-circuited by WMT's earnings report. The company reported on Thursday night and missed estimates by a penny. They also missed the revenue estimate and guided lower for the second quarter. This was bad news all the way around. I am surprised the stock did not see a much steeper post-earnings sell-off.

I am warning your right now that WMT will likely retreat lower toward the $74.00 level, which should offer support.

NOTE: Since we've already closed the 2014 calls, I am raising our exit target to $89.00.

- Suggested Positions -
(exited 2014 Jan. $75 calls on Monday, April 29th, 2013)
MAR 05, 2013 - entry price on WMT @ 73.47, option @ 3.10
symbol: WMT1418a75 2014 JAN $75 call - exit $6.05*(+95.1%)

- or -

MAR 05, 2013 - entry price on WMT @ 73.47, option @ 2.97
symbol: WMT1517a80 2015 JAN $80 call - current bid/ask $ 5.15/5.25

05/16/13 WMT reports earnings that miss estimates, miss revenues, and guides lower.
05/11/13 adjust exit target to $89.00.
04/29/13 planned exit for 2014 calls
*exit price is an estimate. The option did not trade when we closed this part of the play.
04/27/13 prepare to exit our 2014 calls immediately on Monday morning (04/29/13)
04/13/13 new stop loss @ 73.45
04/06/13 new stop loss @ 71.40
03/30/13 new stop loss @ 69.45

Current Target: $89.00
Current Stop loss: 73.45
Play Entered on: 03/05/13
Originally listed on the Watch List: 02/02/13


CLOSED Plays


Macy's Inc. - M - close: 48.67

Comments:
05/18/13: Our plan was to exit our Macy's position on Monday, May 13th, at the opening bell. That way we could avoid the risk of holding over the company's earnings report. After such a big rally higher there was a chance investors could choose to sell the earnings news no matter how good the report was.

M reported on the 15th and the results were better than expected. Shares spiked toward $49.00 on the news. The trend is still higher but Macy's is very overbought and due for a correction.

- Suggested Positions -
MAR 21, 2013 - entry price on M @ 42.22, option @ 2.85
symbol: M1418a45 2014 JAN $45 call - exit $4.58 (+60.7%)

05/13/13 closed on May 13th, at the open
05/11/13 prepare to exit positions immediately to lock in gains.
05/04/13 new stop loss @ 42.75, investors may want to just take profits now.

Chart of M:

Current Target: $48.50
Current Stop loss: 42.75
Play Entered on: 03/21/13
Originally listed on the Watch List: 03/09/13