Editor's Note:

The U.S. market produced a strong, widespread rally on Thursday. Yet the move might just be an oversold bounce after the recent sell-off. There is still a lot of uncertainty over Japan's nuclear plants and violence in North Africa and the Mid East continues. On a positive note the Philly Fed survey was very strong.

-James

Current Portfolio:


CALL Play Updates

Cerner Corp. - CERN - close: 102.68 change: +1.61

Stop Loss: 99.45
Target(s): 104.85, 109.00
Current Option Gain/Loss: -27.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/17 update: The market's oversold bounce today helped CERN add +1.5%. While CERN continues to show relative strength I am wary of the broader market. We have a stop loss at $99.45. I am not suggesting new bullish positions at this time.

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%)

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


Capital One Financial - COF - close: 50.78 change: +0.58

Stop Loss: 47.75
Target(s): 54.75, 59.00
Current Option Gain/Loss: - 6.0% and -12.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/17 update: Some of the banking stocks were bouncing sharply as the market expects the Federal Reserve to approve new rules allowing major banks to raise their dividends. The decision to allow banks to raise dividends could come tomorrow or it could come by Monday. COF isn't one of the big banks that everyone expects will raise their dividend but a rally in the financial sector won't hurt shares of COF. Traders bought the dip again, this time near $50.25. I would still consider new bullish positions with COF near $50. Our targets are $54.75 and $59.00.

- Suggested Positions -

Long the April $50 call (COF1116D50) Entry @ $2.63

- or -

Long the April $55 call (COF1116D55) Entry @ $0.65

Entry on March 16th at $51.08
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on March 15th, 2010


Fossil, Inc. - FOSL - close: 81.04 change: -0.73

Stop Loss: 79.40
Target(s): 82.00, 88.00
Current Option Gain/Loss: + 50.0%, and + 65.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/17 update: FOSL underperformed today and shares appear headed for short-term support near $80.00 and its 30-dma. Our plan was to exit our March calls this morning at the open. Thankfully FOSL gapped open higher at $83.03 before sinking lower. The March $80 calls opened at $2.10 (+50%). I would wait for a new bounce near $80.00 before considering new positions.

- Suggested Positions -

March $80 calls (FOSL1119C80) Entry @ $1.40, Exit @ 2.10 (+50%)

- or -

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

03/17 FOSL opens at $83.03, March option exit @ $2.10 (+50%)
03/16 Exit the March calls ASAP (morning of 3/17) currently +39%
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

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: 96.80 change: +0.99

Stop Loss: 93.85
Target(s): 102.50, 109.00
Current Option Gain/Loss: -94.2%, and -19.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/17 update: JLL is still churning sideways but shares did gain +1% on the session. I am not suggesting new positions at this time but nimble traders could try and buy another dip or bounce near the $94.00 mark. It was our plan to exit our March $100 calls at the open. JLL opened at $97.45. Our March options opened at We will plan to exit our March $100 calls at the closing bell tomorrow.

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)

March $100 calls (JLL1119C100) Entry @ $1.75, Exit $ 0.10 (-94.2%)

- or -

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

03/17 Exited March calls @ open, Estimated exit @ 0.10 (-94.2%)
03/10 New stop loss @ 93.85

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


Polaris Industries, Inc. - PII - close: 81.45 change: +0.95

Stop Loss: 78.49
Target(s): 84.95, 89.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 7 weeks
New Positions: Yes, see trigger

Comments:
03/17 update: PII continues to show relative strength. The stock rallied again with a +1.1% gain. Shares of PII are now testing resistance at the $82.00 level. We have a trigger to buy calls at $82.25. If triggered I would keep our position size small to limit our exposure. Our targets are $84.95 and $89.00. FYI: The Point & Figure chart for PII is bullish with a $98 target.

Trigger @ 82.25 (Small Positions)

- Suggested Positions -

Buy the April $85 calls (PII1116D85) current ask 1.50

Entry on March xxth at $ xx.xx
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 396 thousand
Listed on March 14th, 2010


Quality Systems Inc. - QSII - close: 79.27 change: +0.38

Stop Loss: 77.90
Target(s): 87.25, 94.50
Current Option Gain/Loss: -51.8%, and -22.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/17 update: I am concerned about QSII's performance. The stock did not see much of a bounce and the rebound it did see struggled with short-term resistance in the $80.50 area and its 30-dma. If the market stumbles I would expect QSII to fall.

More aggressive traders might want to lower their stop and place the stop under the 50-dma. I am not suggesting new bullish positions at this time.

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


PUT Play Updates

Fortune Brands Inc. - FO - close: 59.63 change: +0.12

Stop Loss: 62.05
Target(s): 55.15
Current Option Gain/Loss: +15.6% and +11.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/17 update: Hmmm... the action on FO today is bearish. Shares gapped open at $60.26 but rolled over under the $61 level and closed back under support near $60 and its 100-dma. Our entry was this morning's open but I would still consider new bearish positions now. More conservative traders might want to use a tighter stop loss.

Remember our plan was to keep our position size small to limit our risk. Our target is $55.15. More aggressive traders may want to aim for the simple 200-dma instead.

- Open Small Bearish Positions -

Long the April $60 put (FO1116P60) Entry @ $1.60

- or -

Long the June $55 put (FO1118R55) Entry @ $1.35

Entry on March 17th at $60.26
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on March 16th, 2010


Joy Global Inc. - JOYG - close: 91.20 change: +2.45

Stop Loss: 93.75
Target(s): 85.25
Current Option Gain/Loss: -25.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/17 update: Resource and commodity-related names were showing strength as commodities rallied on a weaker dollar and there is growing expectations over the size of the reconstruction in Japan. Shares of JOYG bounced back toward resistance near $92.00 and its 50-dma.

I am repeating myself but more conservative traders may want to move their stop closer to the $92.50 or $92.00 levels.

At this point we may want to wait for another failed rally pattern before initiating new bearish 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

03/15 New stop @ 93.75

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


Union Pacific Corp. - UNP - close: 93.80 change: +2.33

Stop Loss: 95.05
Target(s): 85.25, or 200-dma
Current Option Gain/Loss: -18.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/17 update: The stock market's widespread bounce on Thursday lifted UNP toward resistance near $95.00 and its 30, 40, and 50-dma. The rally attempt stalled at resistance. Technically this looks like a new bearish entry point to buy puts. However, if the market rebound continues I would now expect UNP to breakout over the $95.00 level, stopping us out at $95.05. Readers may want to take a step back and see how the market performs tomorrow before considering new positions.

- Small Bearish Positions -

Long the April $90 PUTS (UNP1116P90) Entry @ $1.75

Entry on March 17th at $92.90
Earnings Date 04/20/11 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on March 16th, 2010