Editor's Note:

Most of our current trades spent last week churning sideways.


Closed Plays


CLX hit our stop loss.



Play Updates


Big Lots Inc. - BIG - close: 39.02

Comments:
05/11/14: After a four-week rally BIG posted some profit taking with a minor loss of less than a dollar. Shares are currently hovering above short-term support near $38.50 and its 30-dma. If the stock market rolls over we could see BIG testing its 50-dma or the $36.00 level. Investors may want to wait for this stock to close above the $40.00 mark before initiating new positions.

- Suggested Positions -
APR 22, 2014 - entry price on BIG @ 39.29, option @ 4.15*
symbol: BIG1517a40 2015 JAN $40 call - current bid/ask $3.40/3.90

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: 105.06

Comments:
05/11/14: CAT made headlines this past week with plans to raise $2 billion in capital with long-dated bonds. The company plans to sell $1 billion in 10-year notes, $500 million in 30-year notes and $500 million in 50-year bonds. The news didn't have much impact on the stock price.

Shares of CAT are essentially unchanged for a week with a five-cent gain. If you think the market is going to correct lower then you may want to wait for CAT to pullback toward what should be support near $100 or its 50-dma. If you are not expecting a market pullback then consider waiting for CAT to close above $106.00 before initiating new positions.

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 $3.95/4.05

- or -

APR 03, 2014 - entry price on CAT @ 101.92, option @ 7.40*
symbol: CAT1615a110 2016 JAN $110 call - current bid/ask $7.85/8.10

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 Walt Disney Co. - DIS - close: 81.95

Comments:
05/11/14: DIS delivered a very strong earnings report last week and ended the week with gains. Analysts were expecting a profit of 96 cents a share on revenues of $11.24 billion. DIS delivered $1.11 a share with revenues climbing +10% to $11.65 billion. Big screen success with movies like Thor (2) and Frozen helped fuel a $1.8 billion in movie revenues.

The stock looks poised to challenge resistance in the $83-84 zone soon. I am raising our long-term exit target from $89 to $97.50. I am also raising our stop loss to $75.75.

- Suggested Positions -
OCT 23, 2013 - entry price on DIS @ 68.81, option @ 3.70
symbol: DIS1517a75 2015 JAN $75 call - current bid/ask $ 9.85/10.05

05/11/14 new stop @ 75.75, adjust exit target from $89 to $97.50
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 @ 97.50
Current Stop loss: 75.75
Play Entered on: 10/23/13
Originally listed on the Watch List: 10/13/13


Hess Corp. - HES - close: 87.61

Comments:
05/11/14: A few days ago Oppenheimer raised their price target on HES to $110. That didn't stop HES from snapping a three-week win streak. The stock posted some profit taking and looks poised for a deeper pullback. I would not be surprised to see HES dip into the $84-86 area.

- Suggested Positions -
APR 22, 2014 - entry price on HES @ 87.50, option @ 3.15*
symbol: HES1517a95 2015 JAN $95 call - current bid/ask $ 2.52/ 2.67

- or -

APR 22, 2014 - entry price on HES @ 87.50, option @ 5.80*
symbol: HES1615a100 2016 JAN $100 call - current bid/ask $ 4.85/5.60

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: 92.80

Comments:
05/11/14: HON is still going nowhere fast. Shares eked out a small gain for the week. HON is stuck in a wide trading range between support near $90 and resistance near $96.00. You can also see that HON has a multi-week trend of lower highs pushing the stock closer toward its long-term bullish trend of higher lows.

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 $ 9.75/10.00

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: 58.96

Comments:
05/11/14: Bingo! Last weekend I cautioned investors that JOY would dip toward $58 and its 50-dma. Sure enough JOY fell to the 50-dma and is trying to bounce. I would be tempted to use this pullback as a new bullish entry point but I am growing concerned about the broader market. Investors might want to wait and see if JOY can close above $60.00 again before initiating positions.

- Suggested Positions -
APR 08, 2014 - entry price on JOY @ 60.75, option @ 4.40
symbol: JOY1517a65 2015 JAN $65 call - current bid/ask $ 2.91/ 3.05

- or -

APR 08, 2014 - entry price on JOY @ 60.75, option @ 6.05
symbol: JOY1615a70 2016 JAN $70 call - current bid/ask $ 4.15/4.65

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: 57.33

Comments:
05/11/14: NS spent the week consolidating sideways between $56 and $58. I warned investors last weekend that NS looked like it was headed for the $54-56 zone so I do not believe the pullback is over.

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: 79.50

Comments:
05/11/14: It as a relatively quiet week for shares of QCOM. The stock did manage another gain but shares mostly churned sideways in the $78.50-80.00 zone. I am still cautious on QCOM following its earnings results in late April.

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 $7.20/7.35

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: 49.08

Comments:
05/11/14: The financial sector and shares of WFC are still drifting sideways. The Federal Reserve was making headlines again on Thursday when they announced a new rule that would limit the size of the nation's biggest banks. The proposed rule, which is now open for public comment, would prohibit any mergers if the new merged company would have liabilities that exceed 10% of the aggregate consolidated liabilities of all financial companies. The Fed is accepting comments on this rule through July 8th, 2014. Based on a 2011 study by the Federal Stability Oversight Council the only banks that might currently be affected by this new rule are Bank of America (BAC), Citigroup (C), J.P.Morgan Chase & Co (JPM), and Wells Fargo (WFC).

WFC's long-term trend is still higher but shares could easily see a correction lower into 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 $ 2.10/2.15

-- or --

DEC 26, 2013 - entry price on WFC @ 45.50, option @ 2.95*
symbol: WFC1615a50 2016 JAN $50 call - current bid/ask $ 3.80/3.90

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


The Clorox Co. - CLX - close: 88.51

Comments:
05/11/14: CLX was a big disappointment this past week. Normally the stock is not that volatile but these last two weeks have seen a big price swing for CLX.

Our trade was triggered two weeks ago with a breakout to new three-month highs and a close above $91.50. Shares then dropped on a disappointing earnings report and continued to sink breaking down through several layers of support. Our stop loss was hit at $86.90 on May 6th.

- Suggested Positions -
APR 29, 2014 - entry price on CLX @ 91.74, option @ 2.70*
symbol: CLX1517a95 2015 JAN $95 call - exit $1.25** (-53.7%)

- or -

APR 29, 2014 - entry price on CLX @ 91.74, option @ 2.80*
symbol: CLX1615a100 2016 JAN $100 call - exit $1.40** (-50.0%)

05/06/14 stopped out at $86.90
**option exit price is an estimate since the option did not trade at the time our play was closed.
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