Editor's Note:

The S&P 500 and the NASDAQ Composite are hovering under resistance after their recent oversold bounce. This is an important test and bulls need to see the market power past these levels. Overall it was a quiet day in the market but BIDU, our new call play, was showing relative strength and hit our trigger to buy calls.

-James

Current Portfolio:


CALL Play Updates

Baidu, Inc. - BIDU - close: 127.09 change: +3.09

Stop Loss: 119.95
Target(s): 139.00, 147.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 5 weeks
New Positions: Yes, see Trigger

Comments:
03/22 update: Our new play in BIDU is already open. The stock displayed relative strength on Tuesday. Shares rallied past resistance in the $125.00-126.00-127.00 area and hit our trigger to buy calls at $127.00 this afternoon. I would still consider new positions now at current levels. There is potential resistance at $130.00 but I'm setting our targets at $139.00 and $147.50. We will plan to exit ahead of BIDU's late April earnings report.

BIDU can be a volatile stock so I would consider this a more aggressive, higher-risk trade.

- Suggested Positions -

Long the April $130 calls (BIDU1116D130) entry @ $3.20

- or -

Long the May $135 calls (BIDU1121E135) entry @ $5.10

Entry on March 22 at $127.00
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on March 21st, 2010


Caterpillar Inc. - CAT - close: 106.79 change: -0.80

Stop Loss: 99.00
Target(s): 109.00, 114.00
Current Option Gain/Loss: +16.1%, and + 1.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/22 update: After three days of gains CAT hit a little profit taking today (-0.7%). I would still consider new positions on dips in the $106-105 area. Be advised that CAT might see some movement tomorrow. The company is holding an analyst meeting on March 23rd.

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: 107.80 change: +1.79

Stop Loss: 101.90
Target(s): 104.85, 109.50
Current Option Gain/Loss: +44.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/22 update: Shares of CERN continue to rally. The stock added +1.6% and spiked to $108.81 intraday. Our final exit target is $109.50. More aggressive traders may want to aim higher (maybe the 112-115 zone). I am raising our stop loss to $101.90. No new positions at this time.

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

03/22 New stop loss @ 101.90
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: 50.56 change: -0.68

Stop Loss: 47.75
Target(s): 54.75, 59.00
Current Option Gain/Loss: -28.5% and -64.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/22 update: Banking stocks were drifting lower on Tuesday. COF underperformed the banking indices, which is a little bit worrisome. I would still consider new call positions on dips near $50.00 or the 50-dma (near $49.50) but more conservative traders may want to raise their stop loss. 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: 78.37 change: +0.28

Stop Loss: 73.45
Target(s): 79.90, 83.75
Current Option Gain/Loss: +28.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/22 update: Shares of CSX received an upgrade today and the stock hit another new high but gains were mild. CSX could be ready for a little pull back toward the $77-75 zone. Wait for that dip before initiating new bullish positions.

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: 98.92 change: -1.45

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

Comments:
03/22 update: JLL reversed course and gave up -1.4% after three days of gains. Looks like yesterday's move over $100 wasn't the breakout we wanted it to be. The stock looks like it could hit the $98-97 level soon. If JLL sees a bounce in that area I would reconsider new bullish positions. More conservative traders may want to inch up their stop loss.

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: 81.96 change: -2.32

Stop Loss: 78.49
Target(s): 84.95, 89.00
Current Option Gain/Loss: -40.0%
Time Frame: 4 to 7 weeks
New Positions: see trigger

Comments:
03/22 update: Ouch! What happened to PII? The stock had been showing so much strength lately. I could not find any company specific news to account for the -2.75% decline today. The move looks like a failed rally under $85 and a bearish engulfing candlestick pattern, which is normally a reversal signal. PII should have some support near $82 and $80 but I am not suggesting new positions at this time. Let's see if there is any follow through tomorrow.

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: 80.51 change: +0.40

Stop Loss: 77.90
Target(s): 87.25, 94.50
Current Option Gain/Loss: -66.6%, and -38.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/22 update: It was a volatile session for QSII. The stock briefly traded down to last week's low near $78.70 but immediately bounced and eventually closed in positive territory. This almost looks like a rebound from technical support at the 50-dma. However, I remain cautious and will repeat my prior comments that readers may want to wait for a rally past $81.25 before launching new positions.

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: 61.37 change: -0.36

Stop Loss: 57.95
Target(s): 64.75, 69.00
Current Option Gain/Loss: -23.0%, and - 8.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/22 update: WFMI spent the session drifting sideways and eventually closed lower. It looks like the stock might retest the $60.00 level, which is where I would consider new bullish positions.

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: 64.52 change: -0.68

Stop Loss: 68.15
Target(s): 60.25, 57.50
Current Option Gain/Loss: -15.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/22 update: INFY still looks weak. The rally attempt this morning failed and shares closed on their lows and near last week's lows. INFY is poised to breakdown and I'm expecting a run towards the $60 area. Personally I would still consider new bearish positions now but you could wait for a breakdown under the $64.00 mark as your entry point.

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