Editor's Note:

Oil could not build on recent gains and stocks rallied following relative strength in the financials. Readers might want to take some profits early in our NKE and WAT plays.

-James

Current Portfolio:


CALL Play Updates

Baker Hughes Inc. - BHI - close: 68.96 change: -0.50

Stop Loss: 67.90
Target(s): 74.75, 79.00
Current Option Gain/Loss: -82.3% and -53.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: Positive analyst comments were not enough to boost BHI out of its current malaise. Shares are still hovering near support at the $68 level. Overall the energy stocks were laggards while most of the market rebounded on Tuesday. With a stop loss at $67.90 I would still consider new April positions here.

Our targets are $74.75 and $79.00.

- Suggested Positions -

Long the March $75 calls (BHI1119C75) Entry @ $1.02

- or -

Long the April $75 calls (BHI1116D75) Entry @ $2.13

Entry on February 28th at $71.74
Earnings Date 05/04/11 (unconfirmed)
Average Daily Volume = 5.3 million
Listed on February 26th, 2010


Peabody Energy Corp. - BTU - close: 67.75 change: -0.53

Stop Loss: 64.75
Target(s): 69.75, 74.00
Current Option Gain/Loss: -34.5%, and +16.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/08 update: Hmm... does today's decline really confirm yesterday's bearish reversal? Traders jumped in and bought the dip in BTU right where we would expect them to, near support at the $66 level. The intraday bounce off this support was pretty quick. I would be inclined to buy this bounce (but you may want to raise your stops toward $66).

Our final target is the $74.00 level but we may have to exit the March calls before BTU hits that level. If we do see a new entry point I would consider the April or June options. <--

Our second target is $74.00. The Point & Figure chart for BTU is bullish with an $80 target. -->

- Suggested Positions -

Long the March $70 calls (BTU1119C70) Entry @ $1.07

- or -

Long the June $70 calls (BTU1118F70) Entry @ $3.60

03/04 1st Target Hit @ 69.75. Options @ +49.5% and +41.6%
03/03 New stop loss @ 64.75

Entry on February 17th at $66.30
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on February 16th, 2010


BorgWarner - BWA - close: 76.83 change: +1.20

Stop Loss: 73.75
Target(s): 79.75, 84.50
Current Option Gain/Loss: -63.6%, and -59.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: After yesterday's ugliness it was nice to see a little oversold bounce in BWA today (+1.5%). Yet shares remain under resistance at $78.00. I remain cautious here and would not open new positions at this time.

Our targets are $79.75 and $84.50. Our plan was to use small positions to limit our risk.

SMALL bullish positions

Long the March $80 calls (BWA1119C80) Entry @ $1.10

- or -

Long the April $80 calls (BWA1116D80) Entry @ $2.47

Entry on February 25th at $76.06
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on February 24th, 2010


Caterpillar Inc. - CAT - close: 104.13 change: +2.00

Stop Loss: 97.90
Target(s): 104.75, 107.50
Current Option Gain/Loss: + 9.6%
2nd Option Gain/Loss: +18.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/08 update: Relative strength in shares of CAT definitely lent support to the Dow Jones Industrial Average. The stock is testing last week's highs. I remain bullish on CAT but would not open new positions at these levels. More conservative traders might want to edge up their stop loss closer to $100.

- Suggested Positions -

Long the March $105 calls (CAT1119C105) Entry @ $1.35

- or -

Long the April $105 calls (CAT1116D105) Entry @ $2.78

03/03 2nd position (April $105 calls) opened at $2.78
03/02 Buy calls on the bounce.
02/23 Triggered @ $101.00. Option @ $1.35
02/22 Still waiting for a dip to $101.00
02/12 Adjusted our trigger, targets, stop loss and strike price.

Entry on February 23 at $101.00
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on February 5th, 2010


Cerner Corp. - CERN - close: 103.06 change: +0.44

Stop Loss: 97.75
Target(s): 104.85, 109.00
Current Option Gain/Loss: - 3.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: CERN continues to bounce but I suspect we might see this stock retest the $101-100 zone again. Wait for dips in this area as new bullish entry points. Readers may want to raise their stop loss closer to the $100 level. Our second and final target is $109.00.

FYI: I want to point out that the most recent data (as of Feb. 15th) listed short interest at 13.9% of CERN's 70-million share float. That definitely seems like a high amount of shorts and fuel for a short squeeze. Plus, the Point & Figure chart for CERN is bullish with a $115 target and what appears to be a relatively fresh quadruple top breakout buy signal.

- Suggested Positions -

Long the April $105 calls (CERN1116D105) Entry @ $2.70

03/04 1st Target Hit @ $104.85, Option @ $3.15 (+16.6%)

Entry on March 3rd at $102.62
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 600 thousand
Listed on March 2nd, 2010


Check Point Software - CHKP - close: 49.12 change: +0.79

Stop Loss: 47.90
Target(s): 54.50
Current Option Gain/Loss: -61.5%, and -41.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/08 update: Once again traders bought the dip near support at the bottom of CHKP's trading range. Readers can choose to buy this bounce or wait for a breakout past $51.00.

Our target is $54.50.

- Suggested Positions -

Long the March $50 calls (CHKP1119C50) Entry @ $1.30

- or -

Long the April $52.50 calls (CHKP1116D52.5) Entry @ $0.85

Entry on February 28th at $50.28
Earnings Date 04/26/11 (unconfirmed)
Average Daily Volume = 3.0 million
Listed on February 26th, 2010


Citrix Systems Inc. - CTXS - close: 72.49 change: +1.29

Stop Loss: 67.40
Target(s): 77.00, 79.90
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/08 update: CTXS continue to show strength and shares added +1.8%. The stock is now testing its February highs near $73.00. This is short-term resistance so we might see CTXS pull back from here. I would use a dip near $70 as a new entry point.

I do consider this a slightly more aggressive trade. We'll put our stop loss under last week's low and under its 50-dma. Our targets are $77.00 and $79.90. The Point & Figure chart for CTXS is bullish with a $94 target.

- Small Bullish Positions -

Long the April $75 calls (CTXS1116D75) Entry @ $2.20

Entry on March 7th at $71.89
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on March 5th, 2010


Devon Energy - DVN - close: 89.96 change: -0.57

Stop Loss: 87.75
Target(s): 94.85, 99.00
Current Option Gain/Loss: -30.0%, and -17.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: Energy stocks were laggards on Tuesday but traders bought the dip in DVN at $88.53. I remain bullish and would consider buying calls on this intraday rebound. Alternatively you could wait for a breakout past $92. Our exit targets are $94.85 and $99.00. Let's keep our position size small since the market has been a little bit volatile lately.

- Small Bullish Positions -

Long the April $95 calls (DVN1116D95) Entry @ $1.60

- or -

Long the July $95 calls (DVN1116G95) Entry @ $4.30

Entry on March 7th at $91.35
Earnings Date 05/04/11 (unconfirmed)
Average Daily Volume = 3.3 million
Listed on March 5th, 2010


Fastenal Co. - FAST - close: 62.44 change: +1.18

Stop Loss: 59.90
Target(s): 67.25
Current Option Gain/Loss: -82.3%, and -22.2%
2nd Position Option Gain/Loss: -25.0%, and + 6.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/08 update: FAST produced a big bounce from support with a +1.9% gain on Tuesday. Shares are now testing short-term resistance in the $62.50-63.50 zone. I would not open new positions at this time.

Readers may want to keep in mind that the most recent data listed short interest at 13.6% of the 132 million-share float.

- Suggested Positions -

Long the March $65 calls (FAST1119C65) Entry @ $0.85

- or -

Long the May $65 calls (FAST1121E65) Entry @ $2.25

-2nd Entry as of listed 2/24, Entered 2/25-

Long the March $65 calls (FAST1119C65) Entry @ $0.20

- or -

Long the APRIL $65 calls (FAST1121D65) Entry @ $0.99

02/24 Buy the dip. New Entry (2nd position).
02/23 New entry point @ 60.96. March $65 call @ 0.25, May $65 call @ $1.45
02/22 Entry @ 62.99, NEW STOP @ $59.90
02/19 Adjusted entry point. Buy calls now. Very small positions
02/12 New trigger @ 61.55, new stop loss @ 59.40

Entry on February 22nd at $62.99
Earnings Date 04/12/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on February 8th, 2010


FactSet Research Systems - FDS - close: 104.25 change: +1.32

Stop Loss: 99.95
Target(s): 109.50
Current Option Gain/Loss: -32.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
03/08 update: FDS produced a +1.2% bounce but shares were unable to breakout from its current pennant-shaped consolidation pattern. This is a neutral pattern of higher lows and lower highs.

I would keep our positions size small. This is a volatile stock and we're playing March options so expect a lot of volatility in the option price. We'll plan on exiting March 14th at the close to avoid holding over the report.

small positions - Suggested Positions -

Long the March $105 calls (FDS1119C105) Entry @ $2.15

Entry on March 1st at $105.01
Earnings Date 03/15/11 (confirmed)
Average Daily Volume = 213 thousand
Listed on February 26th, 2010


Fossil, Inc. - FOSL - close: 83.21 change: +0.16

Stop Loss: 76.75
Target(s): 82.00, 88.00
Current Option Gain/Loss: +185.7%, and +123.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: FOSL managed to tag a new high above $84.00 but failed to truly breakout past its February highs. Odds favor a dip soon and that would look like a potential bearish double top pattern. I am not suggesting new positions at this time. Our final target is $88.00.

- Suggested Positions -

Long the March $80 calls (FOSL1119C80) Entry @ $1.40

- or -

Long the April $80 calls (FOSL1116D80) Entry @ $2.60

03/05 New stop loss @ 76.75
03/05 1st Target Hit @ $82.00, Options @ +142% and +92.3%
03/03 new stop loss @ 74.75

Entry on February 28th at $76.75
Earnings Date 05/11/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on February 26th, 2010


Hess Corp - HES - close: 83.81 change: -0.55

Stop Loss: 81.60
Target(s): 92.25, 98.50
Current Option Gain/Loss: -48.8%, and -38.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: Energy stocks were underperformers on Tuesday as oil struggled near its highs. HES was weak right away but traders immediately bought the dip near technical support at its rising 40-dma. This intraday bounce looks like a new bullish entry point to buy calls. More conservative traders might want to inch up their stops closer to the $82.00 mark.

<-- The Point & Figure chart for HES is bullish with a $107 target. -->

- Suggested Positions -

Long the April $90 calls (HES1116D90) Entry @ $2.60

- or -

Long the May $90 calls (HES1121E90) Entry @ $4.15

03/02 Adjusted stop loss to $81.60

Entry on March 1st at $87.17
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 2.9 million
Listed on February 28th, 2010


IntercontinentalExchange, Inc. - ICE - cls: 131.94 chg: -2.78

Stop Loss: 125.75
Target(s): 138.00, 148.00
Current Option Gain/Loss: +12.5%, and + 8.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: ICE hit some profit taking today following yesterday's bullish breakout. The stock lost -2.0% but traders bought the dip near prior resistance and what should be new support near $130. Nimble traders could buy this dip but if you do I would use a tighter stop loss. Our first target to take profits is at $138.00.

Prior comments:
This is an aggressive trade. The stock is volatile and there is a chance that ICE makes an acquisition bid for another exchange. If Wall Street thinks ICE is paying too much the stock will decline on the news. Our targets are $138.00 and $148.00. I want to warn you that the March options will probably be extremely volatile.

- Suggested Positions - (Small Positions Only)

Long the March $130 calls (ICE1119C130) Entry @ $3.20

- or -

Long the April $135 calls (ICE1116D135) Entry @ $3.40

03/07 New stop loss @ 125.75

Entry on February 28th at $127.46
Earnings Date 05/04/11 (unconfirmed)
Average Daily Volume = 938 thousand
Listed on February 26th, 2010


Jones Lang Lasalle Inc. - JLL - close: 96.70 change: +1.30

Stop Loss: 93.30
Target(s): 102.50, 109.00
Current Option Gain/Loss: -62.8%, and -30.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: JLL produced a +1.3% bounce but I remain cautious on the stock. I am not suggesting new bullish positions at this time.

JLL has see a lot more volatility in the last month so let's keep our position size small to reduce our risk. Our targets are $102.50 and $109.00. FYI: March options are likely to be very volatile.

- Suggested Positions - (Small Positions)

Long the March $100 calls (JLL1119C100) Entry @ $1.75

- or -

Long the April $100 calls (JLL1116D100) Entry @ $3.40

Entry on February 28th at $97.96
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 386 thousand
Listed on February 26th, 2010


3M Co. - MMM - close: 93.75 change: +1.35

Stop Loss: 88.75
Target(s): 94.50, 99.00
Current Option Gain/Loss: +128.5%, and +126.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: MMM has produced a bullish breakout over resistance to set new multi-year highs. If you like to buy breakouts then this is your entry point. I would buy the April calls and target $99. MMM is getting close to our $94.50 target. Our second and final target is $99.00.

- Suggested Positions -

Long the March $90 calls (MMM1119C90) Entry @ $1.75

- or -

Long the April $95 calls (MMM1116D95) Entry @ $0.78

Entry on February 25th at $89.75
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 3.5 million
Listed on February 24th, 2010


Nike Inc. - NKE - close: 89.19 change: +0.27

Stop Loss: 84.80
Target(s): 88.00, 91.50
Current Option Gain/Loss: +124.8%, and +155.3%
2nd Position Gain/Loss: + 46.8%, and + 29.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: Nike was getting some positive press on CNBC today. Dick's Sporting Goods had bullish things to say about their footwear sales, suggesting NKE would be having a good quarter. Currently our final target is $91.50. More aggressive traders may want to aim higher. However, the newsletter does not want to hold over NKE's earnings report, which is coming up soon on March 17th.

- Suggested Positions - (Small Positions Only!)

Long the March $85 calls (NKE1119C85) Entry @ $2.09

- or -

Long the April $90 calls (NKE1116D90) Entry @ $0.94

2nd position, buy the bounce from $85.50

Long the March $85 calls (NKE1119C85) Entry @ $3.20

- or -

Long the April $90 calls (NKE1116D90) Entry @ $1.86

02/25 New stop loss @ 84.80
02/24 New entry point, buy the bounce from $85.50, Add 2nd position
02/19 Adjusted final target to $91.50
02/18 1st Target Hit @ 88.00. March $85 call @ 3.75 (+79.4%)
02/18 1st Target Hit @ 88.00. April $90 call @ 1.80 (+91.4%)

Entry on February 15th at $85.25
Earnings Date 03/17/11 (confirmed)
Average Daily Volume = 2.2 million
Listed on February 9th, 2010


Occidental Petrol. - OXY - close: 100.92 change: -2.15

Stop Loss: 97.90
Target(s): 106.75, 109.75
Current Option Gain/Loss: -68.9%, and -21.9%
2nd Positions Gain/Loss: -43.1%, and -14.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/08 update: Ouch! Energy stocks were laggards on Tuesday but OXY really underperformed. Shares gave up -2.0% and look headed for round-number support near $100.00. More conservative traders may want to raise their stop loss closer to the 50-dma near $99.15. I would wait for OXY to test $100 before initiating new positions.

Our plan was to use small positions to limit our risk. Don't forget that March calls expire in a couple of week.

Small Bullish Positions - Suggested Positions -

Long the March $105 calls (OXY1119C105) Entry @ $1.87

- or -

Long the April $105 calls (OXY1116D105) Entry @ $2.78

-2nd Position on bounce at $100 - Entry March 3rd -

Long the March $105 calls (OXY1119C105) Entry @ $1.02

- or -

Long the April $105 calls (OXY1116D105) Entry @ $2.54

03/03 OXY gapped open higher at $101.71, affecting our new entry
03/02 Buy calls on this bounce near $100 (2nd positions listed)
03/02 New stop loss at $97.90
02/28 Adjusted entry strategy. Buy calls now!

Entry on March 1st at $104.12
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 4.9 million
Listed on February 22nd, 2010


Quality Systems Inc. - QSII - close: 81.22 change: +1.33

Stop Loss: 77.90
Target(s): 87.25, 94.50
Current Option Gain/Loss: -22.2%, and -11.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: QSII came close to erasing yesterday's losses but didn't quite make it. Yesterday I suggested using a bounce above $80.50 or $81.00 as an entry point and we got that rebound today. Cautious traders could inch up their stop losses.

Prior Comments:
FYI: Readers will be interested to note that the most recent data listed short interest in QSII at almost 28% of the very small 17.5 million-share float. That's definitely a recipe for a short squeeze. Plus, the Point & Figure chart for QSII is bullish with a $119 target.

- Suggested Positions -

Long the April $85 calls (QSII1116D85) Entry @ $1.35

- or -

Long the June $85 calls (QSII1118F85) Entry @ $3.40

Entry on March 4th at $81.44
Earnings Date 05/31/11 (unconfirmed)
Average Daily Volume = 154 thousand
Listed on March 3rd, 2010


Transocean Ltd. - RIG - close: 83.89 change: +0.14

Stop Loss: 79.75
Target(s): 89.50, 94.00
Current Option Gain/Loss: -38.0%, and -12.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: RIG managed to buck the trend in energy stocks and post a gain today. Yet gains were pretty minor. Readers may want to wait for a dip into the $82-80 zone as our next entry point. Our profit targets are $89.50 and $94.00.

Please note that the March calls will likely be very volatile.

- Suggested Positions -

Long the March $85 calls (RIG1119C85) Entry @ $2.05

- or -

Long the April $85 calls (RIG1116D85) Entry @ $3.60

02/28 RIG hit our trigger @ 84.25

Entry on February 28th at $84.25
Earnings Date 05/05/11 (unconfirmed)
Average Daily Volume = 5.3 million
Listed on February 26th, 2010


Ross Stores Inc. - ROST - close: 71.33 change: +0.66

Stop Loss: 69.75
Target(s): 74.90, 77.75
Current Option Gain/Loss: -37.5%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
03/08 update: We had a close call with ROST today. This morning the stock spiked lower and hit $69.88 before bouncing. Shares eventually closed up with a +0.9% gain. Our stop loss remains at $69.75. Yesterday I suggested we buy calls on a bounce from $70 and we got it. Don't forget that we will plan to exit ahead of the mid March earnings report. The Point & Figure chart for ROST is bullish with a $97 target.

- Suggested Positions -

Long the April $75 calls (ROST1116D75) Entry @ $1.60

03/03 New stop loss @ 69.75

Entry on March 1st at $72.55
Earnings Date 03/17/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on February 28th, 2010


The Toronoto-Dominion Bank - TD - close: 86.07 change: +0.82

Stop Loss: 80.90
Target(s): 84.00, 89.00
Current Option Gain/Loss: +344.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/08 update: The relative strength in financials help keep the market afloat on Tuesday. TD managed to gain +0.9%. Shares still look short-term overbought here. I am not suggesting new bullish positions at this time. Our final target remains $89.00.

More conservative traders may want to exit anyway just to lock in a gain!

- Suggested Positions -

Long the March $80.00 call (TD1119C80) Entry @ $1.35

03/03 new stop loss @ 80.90
03/03 Target exceeded. Gap higher at $84.73 vs. target $84.00
03/03 March $80 call opened @ $6.00 (+344.4%)
02/28 New stop loss @ 78.40
02/26 New stop loss @ 77.90
02/16 New stop loss @ 76.90

Entry on February 11th at $78.89
Earnings Date 03/03/11
Average Daily Volume = 583 thousand
Listed on February 10th, 2010


Proshares Ultra(long) Russell 2000 - UWM - close: 47.12 change: +1.46

Stop Loss: 43.49
Target(s): 49.75, 54.00
Current Option Gain/Loss: -16.3%, and +14.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Small Positions - UWM Position -

Long the April $48 calls (UWM1116D48) Entry @ $2.75

-2nd position (entry 2/25)-

Long the April $47 calls (UWM1116D46) Entry @ $2.50

02/26 New stop loss @ 43.49
02/25 April $47 call opened at $2.50
02/24 Add another position, April $47 calls
02/14 UWM opened at $46.90. Option opened @ $2.75

iShares Russell 2000 - IWM - close: 82.41 change: +1.32

Stop Loss: 79.20
Target(s): 84.95, 87.25
Current Option Gain/Loss: -12.5%, and +17.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/08 update: The small cap index came very close to erasing yesterday's losses. The rebound lifted the index right back toward short-term resistance. A breakout from here could spark a new leg higher. If not, then we could be destined to churn sideways for the rest of the week. We want to keep our position size small to limit our risk.

Small Positions - IWM Position -

Long the April $84 calls (IWM1116D84) Entry @ $1.92

-2nd position (entry 2/25)-

Long the April $82 calls (IWM1116D82) current ask @ $2.35

02/26 New stop loss @ 79.20
02/25 April $82 call opened at $2.35
02/24 Add another position (April $82 calls)
02/14 IWM opened @ 82.11. Option opened @ 1.92

UWM Entry on February 14th at $46.90
IWM Entry on February 14th at $82.11
Listed on February 12th, 2010


Waters Corp. - WAT - close: 87.12 change: +1.11

Stop Loss: 81.80
Target(s): 86.00, 89.90
Current Option Gain/Loss: +183.3%, and +105.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/08 update: WAT continues to show relative strength and shares added +1.2%. If the market could rally from here WAT has a good chance of surging toward $90. More conservative traders may just want to lock in a profit now. I am not suggesting new bullish positions at this time. Our final target is $89.90.

FYI: The March calls will likely be very volatile.

- Suggested Positions -

Long the March $85 calls (WAT1119C85) Entry @ $0.90

- or -

Long the April $85 calls (WAT1116D85) Entry @ $1.75

03/05 New stop loss @ 81.80
03/04 1st Target Hit @ $86.00. Options @ +100%, and +57.1%
The March $85 was bid near $1.80, the April $85s near $2.75.

Entry on February 28th at $82.61
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 876 thousand
Listed on February 26th, 2010