Editor's Note:

Japan was making progress cooling its troubled nuclear reactors. The U.N. forces were successful in knocking out Gaddafi's air force and taking the pressure off of the Libyan rebels. News that AT&T (T) would spend $39 billion to buy its rival T-Mobile from Deutsche Telekom was seen as a sign of confidence by Wall Street. The acquisition would leapfrog AT&T into the largest U.S. carrier, past Verizon.

-James

Current Portfolio:


CALL Play Updates

Caterpillar Inc. - CAT - close: 107.59 change: +2.53

Stop Loss: 99.00
Target(s): 109.00, 114.00
Current Option Gain/Loss: +33.8%, and +14.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/21 update: Dow-component CAT continues to perform well. The stock surged +2.4% to close at new all-time highs. Shares are starting to look a little overbought here but there is nothing stopping CAT from running to the next level of potential round-number resistance at $110. I would prefer to wait for a dip near the $106-105 area before considering new bullish positions.

Our targets are $109.00 and $114.00.

- Suggested Positions -

Long the April $105 calls (CAT1116D105) Entry @ $3.40

- or -

Long the May $110 calls (CAT1121E110) Entry @ $3.15

Entry on March 18th at $104.99 (gap higher)
Earnings Date 04/29/11 (unconfirmed)
Average Daily Volume = 7.4 million
Listed on March 17th, 2010


Cerner Corp. - CERN - close: 106.01 change: +2.91

Stop Loss: 99.45
Target(s): 104.85, 109.00
Current Option Gain/Loss: +11.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/21 update: CERN delivered a very strong day. Shares rallied +2.8% and broke out past resistance near the $105 level. I am adjusting out final target from $109.00 to $109.50.

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

03/21 Adjusted final target to $109.50
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: 51.24 change: +0.19

Stop Loss: 47.75
Target(s): 54.75, 59.00
Current Option Gain/Loss: - 9.5% and -44.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/21 update: After outperforming on Friday the financial sector underperformed on Monday. Shares of COF bounced around the $51 area. I don't see any changes from my prior comments. Readers can open call positions now or hope for another dip closer to the $50.00 mark. 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


CSX Corp. - CSX - close: 78.09 change: +1.87

Stop Loss: 73.45
Target(s): 79.90, 83.75
Current Option Gain/Loss: +17.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/21 update: Oil continued to rise but that did not stop a rally in the transport sector. Shares of CSX were showing strength. The stock opened at $77.25 and rallied +2.4% to close at another new record high. If you don't feel like chasing it then wait for a dip near the $77-76 area.

Our plan was to keep our position size small to limit our risk. FYI: The Point & Figure chart for CSX is bullish with a $98 target.

- Small Bullish Positions -

Long the April $80 calls (CSX111680) Entry @ $1.06

Entry on March 21 at $77.25
Earnings Date 04/13/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on March 19th, 2010


Jones Lang Lasalle Inc. - JLL - close: 100.37 change: +2.02

Stop Loss: 93.85
Target(s): 102.50, 109.00
Current Option Gain/Loss: + 8.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/21 update: The bounce in JLL continues and shares closed just over round-number resistance at the $100 level. I am not suggesting new positions at this time but if we see JLL pull back and bounce again at $98, then I might buy calls again.

Prior Comments:
We wanted to keep our position size small to limit our risk. Our targets are $102.50 and $109.00.

- Suggested Positions - (Small Positions)

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: 84.28 change: +2.41

Stop Loss: 78.49
Target(s): 84.95, 89.00
Current Option Gain/Loss: + 5.0%
Time Frame: 4 to 7 weeks
New Positions: see trigger

Comments:
03/21 update: PII continues to show relative strength. The stock rallied with a +2.9% gain. This is a new record high. Shares almost hit our first target at $84.95 and odds are good PII will tag this level tomorrow. Our final target is $89.00.

I would not open new positions here. Wait for a dip near $82.00. Our plan was to keep our position size small. FYI: The Point & Figure chart for PII is bullish with a $98 target.

- Small Positions -

Long the April $85 calls (PII1116D85) Entry @ 2.00

Entry on March 18th at $82.25
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 396 thousand
Listed on March 14th, 2010


Quality Systems Inc. - QSII - close: 80.11 change: +0.60

Stop Loss: 77.90
Target(s): 87.25, 94.50
Current Option Gain/Loss: -62.9%, and -26.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/21 update: With all of the big gains across the market today, the action in QSII is disappointing. The rally stalled once QSII came close to filling the gap down from March 15th. This is bearish. Readers may want to wait for a new rise past $81.25 before initiating new positions. More conservative traders might want to raise their stops toward this past week's low near $78.66. For the moment I am keeping our stop loss under the 50-dma (near $78.00).

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


Whole Foods Market Inc. - WFMI - close: 61.73 change: +1.29

Stop Loss: 57.95
Target(s): 64.75, 69.00
Current Option Gain/Loss: + 1.5%, and + 1.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/21 update: Our new play in WFMI is already triggered. Shares opened at $61.00 and rallied toward the $62.00 level intraday. I was suggesting a trigger to buy calls at $61.55. I would still consider new positions now or you could wait for a dip near $61.00.

Our upside targets are $64.75 and $69.00. FYI: The Point & Figure chart for WFMI is bullish with an $86 target.

- Suggested Positions -

Long the April $65 calls (WFMI1116D65) Entry @ $0.65

- or -

Long the May $65 calls (WFMI1121E65) Entry @ $2.25

Entry on March 21 at $61.55
Earnings Date 05/11/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on March 19th, 2010


PUT Play Updates

Infosys Technologies - INFY - close: 65.20 change: +0.65

Stop Loss: 68.15
Target(s): 60.25, 57.50
Current Option Gain/Loss: -23.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/21 update: INFY gapped higher at the open but there was no follow through. The stock closed with a +1% gain but shares still look vulnerable. I would watch for a failed rally in the $66-67 zone as a new entry point to buy puts. However, you want to be careful buying puts when the market is moving higher. Keep your position size small. An alternative entry would be to wait for a drop under $64.00.

Our targets are $60.25 and $57.50. INFY looks like it might have support near $60.00 and the $57.00 levels.

- Small Bearish Positions -

Long the April $65 PUT (INFY1116P65) Entry @ $2.48

Entry on March 18th at $65.30
Earnings Date 04/15/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on March 17th, 2010


CLOSED BEARISH PLAYS

Fortune Brands Inc. - FO - close: 61.30 change: +1.18

Stop Loss: 62.05
Target(s): 55.15
Current Option Gain/Loss: -46.8% and -33.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/21 update: Given the strength of the market's rally on Monday I am suggesting an early exit in our FO put play. The stock gained +1.9% and looks poised to rally toward the top of its prior range near $63.00. A breakout past $63.00 could be used as a new bullish entry point.

Remember our plan was to keep our position size small to limit our risk.

- Small Bearish Positions -

April $60 put (FO1116P60) Entry @ $1.60, current bid $0.85 (-46.8%)

- or -

June $55 put (FO1118R55) Entry @ $1.35, current bid $0.90 (-33.3%)

03/21 Exit Early now. FO @ $61.30. Options @ -47% & -33%

chart:

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