Editor's Note:

The action in the stock market this past week offers some warning signals that the rally is extremely tired. I would look at the recent intraday failed rallies as another clue the market's rally could be ready for a correction. More conservative traders may want to adjust their stops higher or just take their money off the table. We only have three days left for the first quarter and stocks might end up drifting sideways as fund managers run out the clock.

Current Portfolio:


CALL Play Updates

Apple Inc - AAPL close: 230.90 change: +4.25 stop: 222.49

Shares of AAPL managed to hit a new high at $231.95 this morning after Credit Suisse raised their price target on the stock to $300. Analysts are expecting great things from the upcoming iPad launch, which should happen in April. I am encouraged that AAPL did not see any follow through on Thursday's bearish reversal pattern. If you were looking for a bullish candidate, AAPL would qualify, but I'm still cautious on the rest of the market.

Our first target is $234.90. Our second target is $239.75. More aggressive traders may want to keep their stop loss under support at the $220 level. I would keep your position size small.

Current Position: BUY CALL APRIL $230 (AAPL 10D230.00) current ask $5.25

Annotated Chart:

Entry on March 23rd at $228.00
Earnings Date 04/21/10
Average Daily Volume = 18.6 million
Listed on March 22nd, 2010


Cash America - CSH - close: 39.35 change: -0.43 stop: 37.45 *new*

CSH is one of the largest pawnbrokers in the country. Consumers are still hurting to the need for short-term cash means traffic should stay strong, especially with the country's stubbornly high unemployment. The upward momentum in CSH has definitely stalled. The action on Friday looks like a bearish failed rally pattern with the rise to $40.50 and its reversal intraday. I am growing more cautious and suggest readers use small positions. I am also eliminating the breakout entry point to buy calls on a move at $41.20. Instead we'll focus on the buy-the-dip entry point at $38.25. The $38.00 level and the 50-dma should offer support. Please note that I am moving our stop loss to $37.45 to reduce our risk.

Buy-the-Dip: Use a trigger at $38.25 to buy calls.

Suggested Position: BUY CALL APRIL $40 (CSH 10D40.00) current ask $1.55

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 04/22/10
Average Daily Volume = 272 thousand
Listed on March 13th, 2010


Cognizant Technology - CTSH - close: 51.09 change: -0.37 stop: 49.95

The rally in technology stocks has stalled with the NASDAQ churning near the 2400 level the last few days. CTSH also looks tired. The last candle on the weekly chart appears to be a top formation. I would expect a dip toward $50.00. The question is, will support at $50.00 hold this time? Nimble traders could buy calls on a bounce near $50.00 but if you do I would keep your position size small. The market looks fragile here and CTSH is overbought with some bearish looking technical indicators. Our initial target is $54.75.

Current Position: CALL APRIL $55 (CTSH 10D55.00) @ 0.40

Annotated Chart:

Entry on March 11th at $ 50.54
Earnings Date 05/04/10
Average Daily Volume = 4.05 million
Listed on March 10th, 2010


Express Scripts - ESRX - close: 100.62 change: +0.04 stop: 99.40 *new*

The rally in healthcare stocks appears to have peaked on Monday following Sunday's vote on the reform bill. The HMO healthcare index has bee sinking ever since. Friday saw the HMO accelerate lower with a 1.3% decline to its rising 10-dma. It's possible that the HMO index is forming a bearish double top with the peak in January and now in March but we won't know until it's in our rearview mirror. If you're an optimist then this is just normal, overdue profit taking and we can buy the next bounce.

The action in ESRX looks a lot healthier but shares have been slipping lower since Monday's pop. Traders bought the dip today at $99.58 and the afternoon bounce this Friday looks like a new bullish entry point. However, traders should be cautious here. I just described the weakness in the sector and the major market indices look tired too. If you do choose to buy calls on ESRX's Friday bounce then adjust your stop. We are raising our stop loss to $99.40. Remember, this is an aggressive, higher-risk trade. Our first target is $104.90. Our second target is $107.45. Our time frame is just a couple of weeks.

Current Position: BUY CALL APRIL $105 (ESRX 10D105.00) at $1.10

Annotated Chart:

Entry on March 24th at $101.99
Earnings Date 04/29/10
Average Daily Volume = 2.51 million
Listed on March 23rd, 2010


Coca-Cola - KO - close: 54.65 change: -0.15 stop: 52.95

Right on cue shares of KO dipped back to the $54.50 level for us. I cautioned traders on Thursday to look for this dip. KO has been digesting its breakout past resistance at its downtrend of lower highs and its 50-dma. I strongly suspect shares are building up steam again for a new rally higher. Yet the correction may not be over yet. Readers could wait for a dip closer to $54.00 or wait for a nice intraday bounce before launching new positions. The 200-dma near $53.00 should offer some technical support. The stock doesn't move super fast but I envision a rally toward the December highs over the next few weeks. Our target to exit is $59.00.

Current Position: BUY CALL May $55.00 (KO 10E55.00) at $1.62

Annotated Chart:

Entry on March 24th at $ 55.22
Earnings Date 04/21/10
Average Daily Volume = 14.6 million
Listed on March 23rd, 2010


L-3 Communications - LLL - close: 92.96 change: -0.56 stop: 91.25

The DFI and DFX defense sector indices have been somewhat resilient to the market's recent malaise the last couple of days. This group remains overbought but until the trend changes bulls are in charge. LLL hasn't been quite that strong and did suffer a little pull back this past week. On Thursday I suggested more conservative traders may want to abandon ship early. My concern is that when the correction does come to the defense sector it will be swift. On a short-term basis I'm expecting a slip toward the $92.00 level. More nimble traders could buy a bounce from $92.00. Our first target is $97.00. Our final target is $99.75.

We chose the $100 calls to keep our capital investment very small. Keep your position size limited.

Current Position: BUY CALL APRIL 100.00 (LLL 10D100.00) @ $0.30

Annotated Chart:

Entry on March 18th at $ 93.88
Earnings Date 04/22/10
Average Daily Volume = 908 thousand
Listed on March 17th, 2010


NII Holdings Inc. - NIHD - close: 40.83 change: -0.23 stop: 39.60

Unfortunately nothing has changed for us with NIHD. The relative strength we were seeing in the communication sector a couple of weeks ago has mellowed. While NIHD's trend is still up momentum has definitely slowed. I would still be tempted to buy calls on a bounce from the $40.00 level but keep your positions very small. Technical indicators are looking bearish because the rally is so tired. The March 22nd low was $39.66 and last week we moved the stop loss to $39.60. Our first target is the $44.00 level.

Current Position: BUY CALL APRIL $40 (NIHD 10D40.00) @ $1.85

Annotated Chart:

Entry on March 11th at $ 40.10
Earnings Date 04/22/10
Average Daily Volume = 2.68 million
Listed on March 10th, 2010


Priceline.com - PCLN - close: 252.11 change: - 2.92 stop: 239.85

I am not the least bit surprised to see PCLN slipping lower on Friday after Thursday's $11 gain. Traders did buy the dip near the $250.00 level, which is encouraging. If you're the optimistic type then this dip to $250 could be used as a new bullish entry point. Don't forget this is an aggressive, higher-risk trade given PCLN's volatility and overbought stature. We need to keep our positions small. Our target is $275.00. Our time frame is about four weeks.

Current Position: BUY CALL APRIL $260 (PCLN 10D260.00) @ 2.15

Annotated Chart:

Entry on March 25th at $246.60
Earnings Date 05/11/10
Average Daily Volume = 793 thousand
Listed on March 23rd, 2010


Panera Bread Co. - PNRA - close: 76.91 change: -0.38 stop: 74.75

There are no surprises here. We have been expecting a short-term pull back in PNRA. I am going to repeat my earlier comments that more conservative traders may want to exit early given the stock's failure to breakout over the $80.00 level the past two weeks. Currently I'm looking for PNRA to dip toward what should be support near $75.00 before making another rally attempt.

I am not suggesting new positions at this time. This was an aggressive trade given our entry point. Our first target is $82.45. FYI: It is worth noting that PNRA could announce a stock split one of these days. The last time shares split was in the $75-80 zone back in June 2002.

Current Position: CALL APR 80.00 (PNRA 10D80.00) @ $1.35

Annotated Chart:

Entry on March 11th at $ 77.18
Earnings Date 04/28/10
Average Daily Volume = 519 thousand
Listed on March 9th, 2010


PartnerRe Ltd. - PRE - close: 80.20 change: +0.19 stop: 77.75

The relative strength in PRE continues with a 0.2% gain on Friday. This time the IUX insurance index participated with a +0.4% gain. Shares of PRE are now testing short-term resistance at their late February highs near $80.50. We have a trigger to buy calls at $80.55. More conservative traders may want to raise that trigger to $80.75 or higher just to reduce the chance we get triggered on an intraday spike higher.

If triggered we'll use a stop loss at $77.75 (under the March 19th low). Our first target is $84.75. Our second, longer-term target is $89.00. There is potential resistance near the October 2009 highs ($81.70) so don't be surprised to see some congestion there.

Trigger to buy calls at $80.55

Suggested Position: BUY CALL APRIL $80.00 (PRE 10D80.00) current ask $1.40

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 04/27/10
Average Daily Volume = 989 thousand
Listed on March 20th, 2010


Wynn Resorts - WYNN - close: 76.63 change: +2.22 stop: 69.29

Hmm... the rally in WYNN on Friday (+2.9%) was unexpected. At Thursday's close shares look poised to correct back toward $70.00. Now WYNN looks ready to breakout to new highs. More aggressive traders can still play this. If you are nimble enough I would be tempted to buy calls on a move over $78.00 with a stop near Thursday's low (74.30) or maybe Friday's low (74.81). Aim for the $82 region. As for the newsletter we will stock with the original plan and wait for a dip to $71.50. If triggered at $71.50 we'll use a stop loss at $69.29. Our first target is $76.50. Our second target is $79.90. Longer-term traders could aim a lot higher.

Trigger to buy calls at $71.50

Suggested Position: BUY CALL APRIL $75 (WYNN 10D75.00) current ask $3.40

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 05/05/10
Average Daily Volume = 2.7 million
Listed on March 24th, 2010


PUT Play Updates

*Currently we do not have any put play updates*