Editor's Note:

CLX has graduated from our watch list to our active play list.

I am concerned that the market could be vulnerable to selling pressure if the situation in Ukraine worsens. Investors should double check their stop loss placement.


Closed Plays


Our plan was to close BBT on Monday, April 28th.
CBI and WDC hit our stop loss.



Play Updates


Big Lots Inc. - BIG - close: 39.79

Comments:
05/04/14: BIG is still slowly building on its pattern of higher lows. Shares look poised to breakout past $40.00 if the market will cooperate. More conservative investors may want to wait for a close above $40.00 before initiating new bullish positions here.

- Suggested Positions -
APR 22, 2014 - entry price on BIG @ 39.29, option @ 4.15*
symbol: BIG1517a40 2015 JAN $40 call - current bid/ask $3.90/4.30

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

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: 105.01

Comments:
05/04/14: CAT managed to eke out another weekly gain. That puts its winning streak at three up weeks in a row and up six out of the last seven weeks. The stock should find short-term support near $104 and near $100 if the market sees any pullback.

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 $4.05/4.20

- or -

APR 03, 2014 - entry price on CAT @ 101.92, option @ 7.40*
symbol: CAT1615a110 2016 JAN $110 call - current bid/ask $7.95/8.25

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


The Clorox Co. - CLX - close: 89.58

Comments:
05/04/14: CLX is a watch list candidate that has graduated to our active play list. The plan was to buy calls if shares closed above $91.50. CLX tends to be viewed as a "safe haven" trade due to its recession proof product line and dividend yield. Investors have been buying dips at the trend of higher lows for weeks.

CLX met our entry point requirement on April 28th with a close at $91.57. Our trade opened on the 29th at $91.74. I cautioned readers last week that CLX could be volatile following its earnings report. Sure enough, after CLX reported earnings on May 1st the stock plunged to $87.50. This pierced the 50-dma, the 200-dma, additional support but managed a rebound off its intraday low. The market reacted to a disappointing report both the top and bottom line missed Wall Street's estimates. CLX management then issued lowered guidance for 2014 and 2015. Now the question is will CLX fill the gap and reverse lower or will it continue its larger trend higher?

I would wait for a new close above $91.00 before initiating new positions.

Earlier Comments:
Our long-term target is the $100-110 zone. The point & figure chart is bullish with a $128 target. I would hesitate to buy the 2016 calls because the spreads are so wide but over time they should narrow.

- Suggested Positions -
APR 29, 2014 - entry price on CLX @ 91.74, option @ 2.70*
symbol: CLX1517a95 2015 JAN $95 call - current bid/ask $1.70/2.05

- or -

APR 29, 2014 - entry price on CLX @ 91.74, option @ 2.80*
symbol: CLX1615a100 2016 JAN $100 call - current bid/ask $1.75/2.45

05/01/14 CLX drops on disappointing earnings news and lowered guidance.
04/29/14 trade opened. CLX opens at $91.74
04/28/14 CLX closes above $91.50, our suggested trigger

Chart of CLX:

Current Target: CLX @ 110.00-115.00 zone
Current Stop loss: 86.90
Play Entered on: 04/29/14
Originally listed on the Watch List: 04/20/14


The Walt Disney Co. - DIS - close: 80.31

Comments:
05/04/14: Shares of DIS bounced off technical support at its rising 100-dma again. The stock was showing relative strength on Friday with a +0.9% gain and a breakout past potential resistance at $80.00 and its 50-dma. This coming week could be volatile for the stock as investors react to earnings.

DIS is scheduled to report earnings on May 6th, after the closing bell. Analysts are looking for a profit of 96 cents a share. I am not suggesting new positions at this time. More conservative investors may want to take profits before DIS announces results to avoid any post-earnings drop.

- Suggested Positions -
OCT 23, 2013 - entry price on DIS @ 68.81, option @ 3.70
symbol: DIS1517a75 2015 JAN $75 call - current bid/ask $ 9.00/ 9.15

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: 88.67

Comments:
05/04/14: HES reported earnings on April 30th. The street was expecting $1.07 a share on revenues of $2.15 billion. HES delivered $1.38 on revenues of $2.68 billion, a strong beat. One Wall Street firm raised their price target on HES to $99 a share following the report. The stock spiked past $90.00 and hit new multi-year highs before paring its gains.

I would not be surprised to see a little post-earnings weakness but we can look for support near $86 and $84.00. I am moving our stop loss to $83.45.

- Suggested Positions -
APR 22, 2014 - entry price on HES @ 87.50, option @ 3.15*
symbol: HES1517a95 2015 JAN $95 call - current bid/ask $ 3.05/ 3.20

- or -

APR 22, 2014 - entry price on HES @ 87.50, option @ 5.80*
symbol: HES1615a100 2016 JAN $100 call - current bid/ask $ 5.15/5.65

05/04/14 new stop @ 83.45
04/30/14 HES delivered better than expected earnings and revenues
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

Current Target: HES @ 109.00
Current Stop loss: 83.45
Play Entered on: 04/22/14
Originally listed on the Watch List: 04/06/14


Honeywell Intl. - HON - close: 92.37

Comments:
05/04/14: HON has gone nowhere the last two months with the stock stuck in the $90-96 range. This past week has started to look bearish with HON struggling beneath its 50-dma and small trend of lower highs. 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 $ 9.60/ 9.80

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: 59.25

Comments:
05/04/14: I am starting to worry about our new JOY trade. The stock is now down tow weeks in a row. Broken resistance at $60.00 should have been new support. Now JOY is retreating and shares are failing at the 10-dma, which is rolling over. Weakness in commodity prices last week probably weighed on JOY's stock. On a short-term basis I am expecting JOY to test what should be support near $58 and its 50-dma. I would wait for a bounce near its 50-dma before considering new bullish positions.

- Suggested Positions -
APR 08, 2014 - entry price on JOY @ 60.75, option @ 4.40
symbol: JOY1517a65 2015 JAN $65 call - current bid/ask $ 3.15/ 3.30

- or -

APR 08, 2014 - entry price on JOY @ 60.75, option @ 6.05
symbol: JOY1615a70 2016 JAN $70 call - current bid/ask $ 4.40/4.85

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: 57.91

Comments:
05/04/14: NS delivered another gain for the week. Unfortunately the action on the stock last week looks bearish. The intraday spike higher on Tuesday and the bearish engulfing candlestick reversal pattern on Friday are both signaling what is probably a short-term top for NS. At the very least I am expecting a dip into the $54-56 zone. I suspect that if the market does turn south NS should benefit as investors seek refuge in the stock's 7% dividend yield.

I am not suggesting new positions at this time.

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 $ 4.00/4.40

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: 78.99

Comments:
05/04/14: QCOM continued its oversold, post-earnings disappointment bounce last week but the rally did seem to stall at its converging 10-dma and 30-dma. Meanwhile investors had a few QCOM headlines to digest.

QCOM announced it had spun off its location awareness technology and renamed the business Gimbal Inc. According to a Reuters article, "The technology allows retailers and sports venues to track the specific location of customers on their premises and send context-aware messages, like special offers for products and services, to their smartphones. It is part of a growing trend in which smartphones and tablets are used to offer customized recommendations to consumers depending on where they are and what they are doing. The advanced Bluetooth technology behind Gimbal, which can be more accurate than GPS and works indoors, meets standards for iBeacon technology used in Apple stores." QCOM remains a minority stake holder in the business.

QCOM is also facing a new, second lawsuit from ParkerVision Inc. (PRKR), the wireless chip company that sued and won a $173 million patent-infringement case against QCOM last year. This time PRKR is suing QCOM over patents that relate to how smartphone communicate with cell towers.

I remain concerned with QCOM given its disappointing earnings results and the revelation it had received a Wells Notice from the SEC last quarter. I am not suggesting new positions. If QCOM rolls over I'm looking for support near its 100-dma.

- Suggested Positions -
NOV 15, 2013 - entry price on QCOM @ 71.34, option @ 4.90
symbol: QCOM1517a75 2015 JAN $75 call - current bid/ask $7.00/7.15

04/24/14 QCOM's earnings 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


Wells Fargo & Co. - WFC - close: 49.58

Comments:
05/04/14: The financial sector continued to drift higher last week and WFC followed suit. The company announced they were raising their dividend by 17% to 35 cents a share.

The stock has encountered round-number resistance at the $50.00 level again. Do not be surprised to see another pullback. Support is still down in 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 $ 2.19/2.24

-- or --

DEC 26, 2013 - entry price on WFC @ 45.50, option @ 2.95*
symbol: WFC1615a50 2016 JAN $50 call - current bid/ask $ 3.90/4.05

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


BB&T Corp. - BBT - close: 37.33

Comments:
05/04/14: Our plan was to exit our BBT trade on Monday, April 28th. The stock has not been cooperating and continued to underperform the major indices last week. Shares opened on the 28th at $37.50, a 17-cent gap higher.

- Suggested Positions -
DEC 17, 2013 - entry price on BBT @ 35.81, option @ 0.99
symbol: BBT1517a40 2015 JAN $40 call - exit $0.95 (-4%)

04/28/14 planned exit
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

Chart of BBT:

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


Chicago Bridge & Iron - CBI - close: 80.79

Comments:
05/04/14: Construction-related stocks like CBI did not perform well last week. Shares broke down to new multi-week lows fell through support near $80 and under its 100-dma and 150-dma. Our stop loss was hit at $79.45 on April 28th.

The oversold bounce off last week's low is already struggling. I suspect CBI will see a deeper correction over the next few weeks. I would keep this stock on your radar screen.

- Suggested Positions -
MAR 07, 2014 - entry price on CBI @ 85.52, option @ 6.85
symbol: CBI1517a90 2015 JAN $90 call - exit $3.35* (-51.0%)

- or -

MAR 07, 2014 - entry price on CBI @ 85.52, option @ 8.50
symbol: CBI1615a100 2016 JAN $100 call - exit $5.40* (-36.4%)

04/28/14 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.
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

Chart of CBI:

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


Western Digital Corp. - WDC - close: 83.68

Comments:
05/04/14: Technology stocks were underperformers last week and WDC helped lead the way lower. Shares collapsed on Thursday following their earnings report out the night before. The company beat the bottom line estimate but lowered their guidance. Naturally traders sold the news on this earnings warning. The stock gapped down below our stop loss and opened at $85.53 on May 1st. Our stop was $85.75.

- Suggested Positions -
APR 01, 2014 - entry price on WDC @ 92.56, option @ 6.85*
symbol: WDC1517a100 2015 JAN $100 call - exit $3.25** (-52.5%)

- or -

APR 01, 2014 - entry price on WDC @ 92.56, option @ 9.65*
symbol: WDC1615a110 2016 JAN $110 call - exit $5.50** (-43.0%)

05/01/14 stopped out
**option exit price is an estimate since the option did not trade at the time our play was closed.
04/30/14 reported earnings and lowered guidance
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

Chart of WDC:

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