Editor's Note:

Stocks were on the verge of a serious breakdown Friday morning but equities recovered from their lows. Earthquakes and tsunamis in Japan, the "day of rage" protests in Saudi, and declines in oil prices all had an influence but couldn't push stocks lower. We did see the plunging consumer sentiment numbers have an effect. ROST was stopped out. Our ICE play was also stopped out. Our JOYG put play was triggered.

-James

Current Portfolio:


CALL Play Updates

Cerner Corp. - CERN - close: 103.20 change: +0.97

Stop Loss: 99.45
Target(s): 104.85, 109.00
Current Option Gain/Loss: -14.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: CERN continues to perform well. Traders bought the dips near $101 a couple of times last week. CERN never saw the sell-off that was so common across the market. That doesn't mean CERN would not sell-off if the major averages continued lower from here but if the market can hold up then CERN looks poised for more gains.

Given the market uncertainty right now readers may want to wait on launching new positions but the overall trend in CERN remains bullish. I am raising our stop loss to $99.45 in an effort to reduce our risk in case the market does breakdown. 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

03/12 New stop loss @ 99.45
03/04 1st Target Hit @ $104.85, Option @ $3.15 (+16.6%)

chart:

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


Cognizant Technology Solutions - CTSH - close: 76.37 change: +0.26

Stop Loss: 74.75
Target(s): 82.25, 84.75
Current Option Gain/Loss: -38.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/12 update: CTSH briefly traded under support at $75.00 and its 50-dma but the stock rallied off its low of $74.90. I see the intraday bounce as a new entry point to buy calls. However, traders may want to keep their position size small since the market still looks vulnerable. We have a stop at $74.75. Our targets are $82.25 and $84.75.

FYI: The Point & Figure chart for CTSH is bullish with a $105 target. Plus, a breakout past $78 would produce a new quadruple top breakout buy signal.

- Suggested Positions -

Long the April $80 calls (CTSH1116D80) Entry @ $1.80

chart:

Entry on March 9th at $78.25
Earnings Date 05/04/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on March 8th, 2010


Citrix Systems Inc. - CTXS - close: 71.74 change: +1.34

Stop Loss: 67.90
Target(s): 77.00, 79.90
Current Option Gain/Loss: -13.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/12 update: The action in CTXS on Friday was encouraging. Traders bought the dip twice near round-number support at $70.00 although I will point out that volume was pretty low. This rebound looks like a new bullish entry point to buy calls but readers may want to raise their stops toward Thursday's low of $69.61. I am raising the newsletter's stop loss to $67.90.

I do consider this a slightly more aggressive trade. 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

03/12 New stop loss @ 67.90

chart:

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


Fastenal Co. - FAST - close: 61.82 change: +0.23

Stop Loss: 59.90
Target(s): 67.25
Current Option Gain/Loss: -88.2%, and -37.7%
2nd Position Option Gain/Loss: -50.0%, and - 9.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/12 update: FAST has now spent more than two weeks consolidating sideways in the $60-63 zone. Readers could still buy dips near $60. Meanwhile FAST still has resistance near $63.00 and $63.75. Don't forget that March options expire in five trading days!

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

chart:

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: 102.43 change: +0.40

Stop Loss: 99.95
Target(s): 109.50
Current Option Gain/Loss: -65.1%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
03/12 update: Monday is our last day for this FDS play. We are planning to exit on Monday at the closing bell to avoid holding over earnings due out Tuesday morning.

small positions - Suggested Positions -

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

03/12 Prepare to exit on Monday.

chart:

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: 82.55 change: -0.73

Stop Loss: 79.40
Target(s): 82.00, 88.00
Current Option Gain/Loss: +114.2%, and + 88.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: Friday's drop in the consumer confidence numbers doesn't bode well for retailers but FOSL held up pretty well. Shares could see another dip toward the $80.00 level, which is where I would look for our next entry point. Don't forget that March options expire in five trading days. 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

03/09 New stop loss @ 79.40
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

chart:

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


Jones Lang Lasalle Inc. - JLL - close: 99.96 change: +4.05

Stop Loss: 93.85
Target(s): 102.50, 109.00
Current Option Gain/Loss: - 8.5%, and +17.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: Shares of JLL have seen a lot of volatility within its $94-100 trading range. The stock whipsawed higher on Friday with a +4.2% gain. JLL is flirting with a breakout past resistance at $100 but for now remains inside its trading range. If the rally continues we can look for JLL to test resistance at $103.00. I am not suggesting new positions at this time. Don't forget that March options expire in five trading days.

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

03/10 New stop loss @ 93.85

chart:

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: 91.61 change: +1.60

Stop Loss: 88.75
Target(s): 94.50, 99.00
Current Option Gain/Loss: + 20.5%, and + 28.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: MMM briefly traded under support at $90.00 on Friday morning but traders bought the dip at the stock's rising 50-dma. Shares outperformed with a +1.7% gain. The bounce from the $90 level is a new bullish entry point. More conservative traders might want to raise their stops toward Friday's low (89.71). March calls expire in five trading days.

- Suggested Positions -

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

- or -

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

chart:

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: 87.17 change: -1.01

Stop Loss: 84.80
Target(s): 88.00, 91.50
Current Option Gain/Loss: + 48.3%, and + 76.5%
2nd Position Gain/Loss: - 3.1%, and - 10.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: NKE gave us a scare on Friday. Shares plunged toward support near $85 and its 50 and 100-dma. The drop was probably a reaction to the huge decline in March's consumer sentiment figures, which might indicate a slow down in consumer spending. Fortunately traders bought the dip in NKE.

I do want to point out that last week's weakness has produced some bearish technical signals but bigger picture NKE is headed higher. The questions is how will NKE's stock perform this week ahead of its earnings report? Will the stock just churn sideways as investors wait for the earnings report? Or will NKE rally from Friday's test of support?

NKE is due to report on March 17th, after the closing bell. That gives us four days. We will plan on exiting Thursday at the close to avoid holding over earnings. Nimble traders who can jump in and out in four days might want to buy the bounce from Friday's low.

- 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%)

chart:

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


Quality Systems Inc. - QSII - close: 82.02 change: +0.06

Stop Loss: 77.90
Target(s): 87.25, 94.50
Current Option Gain/Loss: - 3.7%, and + 0.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: Friday was a very quiet day for QSII. Shares spent the session churning on either side of the $82.00 level. I would still consider new bullish positions now or you can wait for a dip toward the $80.50-80.00 zone. More conservative traders might want to raise their stops closer toward $80.

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

chart:

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


Stericycle Inc. - SRCL - close: 86.87 change: +0.52

Stop Loss: 84.95
Target(s): 94.00, 99.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
03/12 update: SRCL is still bouncing around the $86-88 zone. We are waiting for a breakout over resistance at $88.00. I am suggesting a trigger to buy calls at $88.25. If triggered our targets are $94.00 and $99.00. The $90 level could be round-number resistance but after four weeks of consolidating sideways I'm not expecting $90 to be an issue. Let's keep our position size small to limit our risk.

Trigger @ 88.25

- Suggested Positions -

Buy the April $90 calls (SRCL1116D90)

- or -

Buy the May $95 calls (SRCL1121E95)

chart:

Entry on March xxth at $ xx.xx
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 481 thousand
Listed on March 9th, 2010


Proshares Ultra(long) Russell 2000 - UWM - close: 44.52 change: +0.15

Stop Loss: 43.49
Target(s): 49.75, 54.00
Current Option Gain/Loss: -50.0%, and -36.0%
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

chart:

iShares Russell 2000 - IWM - close: 80.18 change: +0.21

Stop Loss: 79.20
Target(s): 84.95, 87.25
Current Option Gain/Loss: -53.6%, and -31.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/12 update: Friday was a real close call for our small cap trades. Investors sold the open and these ETFs spiked lower. Yet the low on UWM was $43.54 and the low on the IWM was $79.28. Our stops are at $43.49 and $79.20, respectively. While I might be tempted to buy calls on this intraday bounce the small cap index looks weak and vulnerable here. Bulls could argue that it is bouncing from its late February lows. Bears can argue that the IWM has closed underneath its 50-dma. This is definitely a pivotal spot. I am a little hesitant to open new bullish positions on the IWM or the UWM.

Prior comments:
We wanted 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

chart:

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: 85.37 change: +0.36

Stop Loss: 83.40
Target(s): 86.00, 89.90
Current Option Gain/Loss: + 27.7%, and + 45.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: Bingo! WAT bounced right were it was supposed to in the $83.75-84.00 region. Nimble traders might want to buy calls on the bounce and just move your stop near Friday's low (83.81). Don't forget that March options expire in five trading days. Please note that the newsletter is moving our stop to $83.40. 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

03/12 New stop loss @ 83.40
03/10 New stop loss @ 82.80
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.

chart:

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


PUT Play Updates

Joy Global Inc. - JOYG - close: 90.56 change: +2.16

Stop Loss: 94.25
Target(s): 85.25
Current Option Gain/Loss: -11.6%
Time Frame: 3 to 6 weeks
New Positions: see below r

Comments:
03/12 update: Be careful here! I have to issue a warning. We were expecting a bounce in shares of JOYG and the stock delivered a bounce on Friday. Yet the stock has produced a bullish engulfing candlestick pattern, which is normally seen as a bullish reversal pattern (that does need to see confirmation first). Our trigger to buy puts was hit at $90.00 on Friday afternoon. Shares of JOYG remain under technical resistance at its 50-dma and under price resistance near $92.00. More conservative traders may want to lower their stops toward the $92.50 area. I am not suggesting new bearish positions at this time. We'll wait to see where JOYG fails before considering new positions.

Our target is $85.25. Aggressive traders could aim for the $84 lows or a drop closer to $80.

- Suggested Positions -

Long the April $85 puts (JOYG1116P85) Entry @ $2.50

Annotated Chart:

Entry on March 11th at $90.00
Earnings Date 06/02/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on March 10th, 2010


CLOSED BULLISH PLAYS

IntercontinentalExchange, Inc. - ICE - cls: 126.07 chg: -1.52

Stop Loss: 125.75
Target(s): 138.00, 148.00
Current Option Gain/Loss: -68.7%, and -45.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/12 update: ICE's bullish breakout over $130 has completely reversed. Shares are now down four days in a row. Selling on Friday pushed ICE to an intraday low of $124.76 and our stop loss was hit at $125.75 early Friday afternoon.

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. I want to warn you that the March options will probably be extremely volatile.

- Suggested Positions - (Small Positions Only)

March $130 calls (ICE1119C130) Entry @ $3.20, Exit @ $1.00 (-68.7%)

- or -

April $135 calls (ICE1116D135) Entry @ $3.40, Exit @ $1.85 (-45.5%)

03/11 Stopped out @ 125.75. Options @ -68.7% and -45.5%
03/07 New stop loss @ 125.75

chart:

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


Ross Stores Inc. - ROST - close: 71.70 change: +1.14

Stop Loss: 69.75
Target(s): 74.90, 77.75
Current Option Gain/Loss: -65.6%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
03/12 update: ROST bounced off its Friday lows and outperformed with a +1.6% gain. Unfortunately the morning spike lower hit $69.73. Our stop loss was $69.75. The initial weakness was probably a reaction to the plunging consumer sentiment numbers, which might suggest a drop in consumer spending.

- Suggested Positions -

April $75 calls (ROST1116D75) Entry @ $1.60, Exit @ $0.55 (-65.6%)

03/11 Stopped out @ 69.75, Option @ -65.6%
03/03 New stop loss @ 69.75

chart:

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: 85.92 change: +0.72

Stop Loss: 80.90
Target(s): 84.00, 89.00
Current Option Gain/Loss: +329.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/12 update: Two days in a row investors have been buying dips in TD near $84.50. More aggressive traders may want to hold on but on Thursday I suggested we exit our March calls at Friday's closing bell. March options expire in five trading days. Readers might want to keep TD on their watch list for a dip toward support near $82 or $80.

- Suggested Positions -

March $80 call (TD1119C80) Entry @ $1.35, Exit @ $5.80 (+329.6%)

03/11 Planned exit @ the close $85.92, Option @ +329.6%
03/10 Prepare to exit tomorrow
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

chart:

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