Editor's Note:

We had BIG and HES graduate from our watch list to our active play list.

Keep in mind that if the broader market continues to roll over it will weigh on everything. A few of our candidates look weak. Investors may want to exit early. I am suggesting an early exit for our BBT trade.


Closed Plays


KLAC was stopped out.



Play Updates


BB&T Corp. - BBT - close: 37.33

Comments:
04/27/14: It's not looking good for our BBT trade. The bounce in the financial sector is rolling over. BBT didn't see that much of a bounce to begin with and shares are underperforming. The stock closed at new two-month lows and looks poised to hit our stop loss soon.

I am suggesting an immediate exit on Monday morning (April 28th).

- Suggested Positions -
DEC 17, 2013 - entry price on BBT @ 35.81, option @ 0.99
symbol: BBT1517a40 2015 JAN $40 call - current bid/ask $0.92/0.98

04/27/14 prepare to exit on Monday morning, April 28th
04/17/14 BBT drops on its earnings report
04/06/14 new stop @ 36.90
03/30/14 new stop @ 36.40
03/23/14 adjust exit target to $44.00
03/16/14 BBT has formed a potential bearish double top.
03/02/14 new stop loss @ 35.80
02/03/14 conservative investors may want to exit now to avoid a potential loss (or raise their stop loss)
01/12/14 new stop loss @ 34.90

Current Target: BBT @ 44.00
Current Stop loss: 36.90
Play Entered on: 12/17/13
Originally listed on the Watch List: 12/15/13


Big Lots Inc. - BIG - close: 39.47

Comments:
04/27/14: BIG has made the jump from watch list candidate to active trade. The plan was to wait for shares to breakout past resistance and close above $39.25 then buy calls the next morning. BIG closed at $39.45 on April 21st. Our trade opened the next day at $39.29. Since then BIG has struggled to build on its breakout thanks to a rollover in the wider market. More conservative investors may want to wait for a close above $40.00 before initiating new bullish positions here.

The stock did see its price target upgraded by one firm last week. Their new price target is $47.00, which just happens to be our exit target as well.

- Suggested Positions -
APR 22, 2014 - entry price on BIG @ 39.29, option @ 4.15*
symbol: BIG1517a40 2015 JAN $40 call - current bid/ask $3.80/4.30

04/22 trade opens. BIG opened at $39.29
*option entry price is an estimate since the option did not trade at the time our play was opened.
04/21 BIG closed above our trigger at $39.25

Chart of BIG:

Current Target: BIG @ 47.00
Current Stop loss: 35.75
Play Entered on: 04/22/14
Originally listed on the Watch List: 04/13/14


Caterpillar Inc. - CAT - close: 104.69

Comments:
04/27/14: It was a big week for CAT. The stock broke through resistance. Shares started to rally just before their earnings report. Then the stock popped higher on its results. Analysts were expecting a profit of $1.22 a share on revenues of $13.01 billion. CAT delivered $1.61 a share with revenues of $13.24 billion. Beating estimates was a good sign but management also raised their 2014 guidance.

The simple 50-dma has risen to $99.00. We will raise our stop loss to $98.45. Look for the $100 area to act as support if the market turns south.

Earlier Comments:
Our long-term target is the $115-125 zone. Currently CAT's point & figure chart is bullish with a $126 target.

- Suggested Positions -
APR 03, 2014 - entry price on CAT @ 101.92, option @ 3.50*
symbol: CAT1517a110 2015 JAN $110 call - current bid/ask $4.10/4.20

- or -

APR 03, 2014 - entry price on CAT @ 101.92, option @ 7.40*
symbol: CAT1615a110 2016 JAN $110 call - current bid/ask $7.35/8.25

04/27/14 new stop @ 98.45
04/03/14 trade opens. CAT @ 101.92
*option entry price is an estimate since the option did not trade at the time our play was opened.
04/02/14 CAT meets our entry trigger with a close above $101.00

Current Target: CAT @ 115.00-125.00 zone
Current Stop loss: 98.45
Play Entered on: 04/03/14
Originally listed on the Watch List: 03/30/14


Chicago Bridge & Iron - CBI - close: 79.91

Comments:
04/27/14: As expected CBI traded sideways until its earnings report on Wednesday evening. Unfortunately CBI disappointed. Revenues were up +30% to $2.93 billion but that was not enough to exceed Wall Street's estimates of $3.06 billion. Shares have fallen sharply in the last two sessions and appear to be breaking down below what should be support at $80.00. Our stop loss is at $79.45. If there is any follow through on Monday we could see CBI hit our stop. I am not suggesting new positions.

- Suggested Positions -
MAR 07, 2014 - entry price on CBI @ 85.52, option @ 6.85
symbol: CBI1517a90 2015 JAN $90 call - current bid/ask $3.50/3.70

- or -

MAR 07, 2014 - entry price on CBI @ 85.52, option @ 8.50
symbol: CBI1615a100 2016 JAN $100 call - current bid/ask $5.50/6.20

04/27/14 the stock looks poised to break support and hit our stop
04/23/14 CBI missed the revenue estimate in its earnings report
03/07/14 trade opens with CBI @ $85.52
03/06/14 CBI closes above our entry requirement of $85.00

Current Target: CBI @ 99.50
Current Stop loss: 79.45
Play Entered on: 03/07/14
Originally listed on the Watch List: 03/02/14


The Walt Disney Co. - DIS - close: 78.23

Comments:
04/27/14: I fear for our DIS trade. The stock has struggled and failed with resistance near $80 and its 50-dma all week long. DIS looks poised to fall toward $76 and its 100-dma (76.70). If the current trend holds true we'll see DIS hit new relative lows in the $74-75 zone. Currently our stop loss is at $74.75. More conservative investors will want to seriously consider an early exit right now to avoid further losses. I am not suggesting new positions. DIS is scheduled to report earnings on May 6th.

- Suggested Positions -
OCT 23, 2013 - entry price on DIS @ 68.81, option @ 3.70
symbol: DIS1517a75 2015 JAN $75 call - current bid/ask $ 7.65/ 7.80

04/27/14 DIS looks poised to hit new relative lows and our stop loss
04/13/14 investors may want to take profits now. DIS could be headed for $70.00
03/09/14 new stop loss @ 74.75, traders may want to take some money off the table here. DIS is overbought and due for a dip.
03/02/14 new stop loss @ 71.75
02/16/14 more conservative traders may want to take profits now.
We are adjusting our long-term target from $84 to $89
01/05/14 new stop loss @ 69.40
12/29/13 new stop loss @ 67.40
12/08/13 new stop loss @ 65.75
11/24/13 new stop loss @ 64.75

Current Target: DIS @ 89.00
Current Stop loss: 74.75
Play Entered on: 10/23/13
Originally listed on the Watch List: 10/13/13


Hess Corp. - HES - close: 87.43

Comments:
04/27/14: Energy stocks were some of the strongest performers mid April but the group was hammered on Friday. HES didn't get hit that bad with a -1% pullback. However, the retreat from its midweek highs looks a bit short-term bearish.

HES was a watch list candidate. The plan was to wait for shares to close above $87.50 and then buy calls the next morning. HES met that requirement on April 21st with a close at $87.78. Our trade opened the next day at $87.50. On a short-term basis, given the market's pullbac, I suspect we'll see HES retest the $85-86 area.

Keep in mind that HES is scheduled to report earnings on April 30th, before the opening bell. Analysts are looking for a profit of $1.07 a share.

- Suggested Positions -
APR 22, 2014 - entry price on HES @ 87.50, option @ 3.15*
symbol: HES1517a95 2015 JAN $95 call - current bid/ask $ 2.87/ 3.10

- or -

APR 22, 2014 - entry price on HES @ 87.50, option @ 5.80*
symbol: HES1615a100 2016 JAN $100 call - current bid/ask $ 5.10/ 5.95

04/22 trade opened. HES opens at $87.50
*option entry price is an estimate since the option did not trade at the time our play was opened.
04/21 HES closes at $87.78, above our entry trigger of $87.50

Chart of HES:

Current Target: HES @ 109.00
Current Stop loss: 81.75
Play Entered on: 04/22/14
Originally listed on the Watch List: 04/06/14


Honeywell Intl. - HON - close: 92.65

Comments:
04/27/14: The bounce in HON, just like the market, has stalled and begun to roll over. Shares look like they will retreat back to support near $90.00 again. Our stop loss is at $89.75. More conservative investors may want to just take profits now. I am not suggesting new positions at this time.

- Suggested Positions -
(closed the 2014 calls on May 20th at the open)
MAY 07, 2013 - entry price on HON @ 76.20, option @ 2.68
symbol: HON1418a80 2014 JAN $80 call - exit $5.10 (+90.2%)

- or -

MAY 07, 2013 - entry price on HON @ 76.20, option @ 4.10
symbol: HON1517a85 2015 JAN $85 call - current bid/ask $ 9.80/10.35

04/27/14 investors may want to just take profits now!
03/02/14 new stop loss @ 89.75, adjust target to $99.00
02/09/14 new stop loss @ 87.45
12/29/13 new stop loss @ 84.85
12/22/13 adjust the exit target to $98.00
...please see earlier newsletter for prior comments...
The plan was to use small positions to limit our risk.

Current Target: exit when HON hits $99.00
Current Stop loss: 89.75
Play Entered on: 05/07/13
Originally listed on the Watch List: 05/04/13



Joy Global Inc. - JOY - close: 60.39

Comments:
04/27/14: The market's reaction to CAT's news on Thursday briefly pushed shares of JOY to a new 52-week high. Unfortunately the rally didn't last. Shares have reversed and are now testing support near $60.00. Now Thursday's peak suddenly looks like a new bearish double top. If JOY breaks down below $60 I think we'll see it drop toward $57.50 and its simple 50-dma. I would hesitate to launch positions at the moment.

- Suggested Positions -
APR 08, 2014 - entry price on JOY @ 60.75, option @ 4.40
symbol: JOY1517a65 2015 JAN $65 call - current bid/ask $ 3.75/ 3.90

- or -

APR 08, 2014 - entry price on JOY @ 60.75, option @ 6.05
symbol: JOY1615a70 2016 JAN $70 call - current bid/ask $ 5.10/ 5.35

04/08/14 JOY hit our entry trigger at $60.75

Current Target: We're aiming for the $75-80 zone
Current Stop loss: 55.75
Play Entered on: 04/08/13
Originally listed on the Watch List: 04/06/14


NuStar Energy - NS - close: 57.67

Comments:
04/27/14: NS continues to show relative strength and closed the week near two-year highs. The company reported earnings on the 23rd and beat estimates on both the top and bottom line. Shares were upgraded the next day following its report.

If the market accelerates lower we could see NS retreat back toward $55.00, which should be new support.

Earlier Comments:
Our target is $64.50. More aggressive investors with a longer time frame may want to aim higher since the point & figure chart is targeting an $87 target.

- Suggested Positions -
APR 04, 2014 - entry price on NS @ 55.25, option @ 3.10*
symbol: NS1517a55 2015 JAN $55 call - current bid/ask $ 3.70/4.20

04/04/14 our play opens. NS @ 55.25
*option entry price is an estimate since the option did not trade at the time our play was opened.
04/03/14 NS closes above $55.25
Current Target: exit calls when NS hits $64.50
Current Stop loss: 51.75
Play Entered on: 04/04/14
Originally listed on the Watch List: 03/23/14


QUALCOMM Inc. - QCOM - close: 77.61

Comments:
04/27/14: Ouch! It was a rough week for QCOM. Shares are down almost four points thanks to a big post-earnings drop. The company's earning results were mixed. The bottom line beat estimates by 9 cents but revenues were a miss. Given QCOM's exposure to AAPL products and AAPL's better than expected quarterly results, many were surprised that QCOM did so poorly. Another important development was news that QCOM disclosed it had received a Wells Notice from the SEC regarding an investigation into bribery charges with Chinese companies.

The disappointing earnings and the Wells notice is a painful one-two punch combo. Investors may want to abandon ship immediately. Our stop loss remains at $74.70. I am not suggesting new positions at this time.

- Suggested Positions -
NOV 15, 2013 - entry price on QCOM @ 71.34, option @ 4.90
symbol: QCOM1517a75 2015 JAN $75 call - current bid/ask $6.25/6.35

04/24/14 QCOM's were a disappointment and they disclosed a Wells Notice. Investors may want to exit now and wait for the dust to clear.
04/20/14 new stop @ 74.70
03/30/14 new stop @ 73.75
03/23/14 new stop @ 71.75
03/04/14 QCOM raises dividend and buyback program
02/19/14 QCOM being investigated by Chinese authorities
01/19/14 new stop loss @ 69.45
12/08/13 new stop loss @ 67.75
11/15/13 trade opens. QCOM @ 71.34
11/14/13 QCOM closes above entry trigger (above 70.50)

Current Target: $85.00
Current Stop loss: 74.70
Play Entered on: 11/15/13
Originally listed on the Watch List: 11/03/13


Western Digital Corp. - WDC - close: 87.77

Comments:
04/27/14: I want to warn readers that the action in WDC last week is bearish. The stock has created a bearish engulfing candlestick reversal pattern on its weekly chart. Friday's drop (-2.2%) also left shares below their 50-dma. If there is any follow through lower this week we could see WDC hit our stop loss at $85.75. More conservative investors may want to abandon ship and exit right now considering how the broader market indices are rolling over.

WDC is scheduled to report earnings on April 30th, after the market's closing bell. Analysts expect a profit of $1.88 a share.

I am not suggesting new positions at this time.

- Suggested Positions -
APR 01, 2014 - entry price on WDC @ 92.56, option @ 6.85*
symbol: WDC1517a100 2015 JAN $100 call - current bid/ask $4.60/4.80

- or -

APR 01, 2014 - entry price on WDC @ 92.56, option @ 9.65*
symbol: WDC1615a110 2016 JAN $110 call - current bid/ask $7.00/7.70

04/01/14 trade opens. WDC opened @ 92.56
*option entry price is an estimate since the option did not trade at the time our play was opened.
03/31/14 WDC meets entry requirement with close above $91.25

Current Target: WDC @ $110.00
Current Stop loss: 85.75
Play Entered on: 04/01/14
Originally listed on the Watch List: 03/30/14


Wells Fargo & Co. - WFC - close: 49.05

Comments:
04/27/14: Believe it or not but WDC managed to eke out a gain last week in spite of the pullback in the financial sector. Unfortunately if the broader market continues to sink I would expect WFC to dip toward the $46-47 area. I'm not suggesting new positions at this time.

- Suggested Positions -
DEC 26, 2013 - entry price on WFC @ 45.50, option @ 1.50
symbol: WFC1517a50 2015 JAN $50 call - current bid/ask $ 2.06/2.11

-- or --

DEC 26, 2013 - entry price on WFC @ 45.50, option @ 2.95*
symbol: WFC1615a50 2016 JAN $50 call - current bid/ask $ 3.75/3.90

04/06/14 WFC looks poised for a pullback
03/30/14 new stop loss @ 44.80
03/09/14 new stop loss @ 43.90
01/19/14 new stop loss @ 42.90
12/26/13 trade opens with WFC @ $45.50
*option entry price is an estimate since the option did not trade at the time our play was opened.
12/24/13 WFC closed @ 45.39, above our trigger at $45.25

Current Target: Exit WFC hits $54.50
Current Stop loss: 44.80
Play Entered on: 12/26/13
Originally listed on the Watch List: 12/08/13



CLOSED Plays


KLA-Tencor - KLAC - close: 66.11

Comments:
04/27/14: KLAC lost $3.20 for the week or -4.8% thanks to its -7.1% plunge on Friday. The big drop on Friday was a reaction to KLAC's earnings released Thursday night. KLAC's earnings beat estimates on both the top and bottom line. Unfortunately management issued a pretty significant earnings warning and shares fell from $68 to technical support at its 200-dma (near the bottom of its long-term bullish channel).

Our stop loss was $63.90 but KLAC opened at $63.00 on Friday morning.

- Suggested Positions -
MAR 13, 2014 - entry price on KLAC @ 67.63, option @ 4.50*
symbol:KLAC1517a70 2015 JAN $70 call - exit $2.00** (-55.5%)

- or -

MAR 13, 2014 - entry price on KLAC @ 67.63, option @ 5.50*
symbol:KLAC1615a75 2016 JAN $75 call - exit $3.00** (-45.4%)

04/24/14 shares gap lower at $63.00, below our stop at $63.90
04/24/14 KLAC issued an earnings warning
03/23/14 new stop loss @ 63.90
03/13/14 trade opens with KLAC @ 67.63
03/12/14 KLAC closes @ 67.63, above our suggested entry, a close above $67.50

Chart of KLAC:

Current Target: exit calls when KLAC hits $79.00
Current Stop loss: 63.90
Play Entered on: 03/13/14
Originally listed on the Watch List: 03/02/14