Editor's Note:

It was a mixed bag on Wall Street. Commodities trended higher in spite of a bounce in the U.S. dollar. Financial stocks ticked lower on disappointing BAC news but our COF play outperformed. BIDU is surging as well. Our new FOSL play has been triggered.

-James

Current Portfolio:


CALL Play Updates

Baidu, Inc. - BIDU - close: 132.58 change: +5.49

Stop Loss: 119.95
Target(s): 139.00, 147.50
Current Option Gain/Loss: + 93.7%, and + 54.9%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
03/23 update: The rally in BIDU is picking up speed. Shares surged more than +4% to close at new all-time highs and on strong volume. I would not open new positions here. Wait for a dip, probably into the $128-125 zone. Readers might want to raise their stop losses. Our first target to take profits is at $139.00. The high today was $133.97. 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: 106.76 change: -0.03

Stop Loss: 99.00
Target(s): 109.00, 114.00
Current Option Gain/Loss: +14.7%, and + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/23 update: CAT held an analyst meeting today. The company reaffirmed its earnings guidance. Shares of CAT briefly traded under the $106 level this morning and rallied toward its highs this afternoon before pulling back to almost unchanged. I'm amending my prior comments and would look for dips near $105 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: 108.08 change: +0.28

Stop Loss: 101.90
Target(s): 104.85, 109.50
Current Option Gain/Loss: +59.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/23 update: Traders bought the dip at $106.00 this morning and CERN bounced back toward its highs for a minor gain. I am not suggesting new positions at this time. Our target to exit is $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

03/22 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: 51.41 change: +0.85

Stop Loss: 47.75
Target(s): 54.75, 59.00
Current Option Gain/Loss: -12.5% and -56.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/23 update: Banking stocks were underperformers today but COF bucked the trend. Shares bounced off their morning lows and posted a +1.6% gain. The rebound looks like a new bullish entry point to buy calls if you missed the dip this morning. 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: 78.35 change: -0.02

Stop Loss: 73.45
Target(s): 79.90, 83.75
Current Option Gain/Loss: +22.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/23 update: Oil continues to tick higher and the transportation sector struggled to rise. The Dow Jones Transportation index closed with a very minor loss but still a loss. Meanwhile Goldman Sachs downgraded railroad operator Canadian Pacific (CP), which weighed on the rails. Shares of CSX hovered near the $78 level all day. I would still wait for a dip into the $77-75 zone before considering new 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


Fossil, Inc. - FOSL - close: 84.33 change: +1.29

Stop Loss: 78.75
Target(s): 84.90, 89.75
Current Option Gain/Loss: + 48.4%, and +10.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/23 update: Our new FOSL play is reading our script perfectly thus far. Shares opened lower, dipped to $81.71 and then rallied. Our trigger to buy calls was hit at $81.75. The stock looks poised to breakout past short-term resistance at $85.00 very soon. If you're looking for an entry point I'd wait for dips near $82 or a breakout past $85.00.

The high today was $84.83 and our first target to take profits is actually at $84.90. Our second and final target is $89.75. More aggressive traders might want to aim higher. The Point & Figure chart for FOSL is bullish with a $106 target.

- Suggested Positions -

Long the April $85 calls (FOSL1116D85) Entry @ $1.65

- or -

Long the May $85 calls (FOSL1121E85) Entry @ $4.35

Entry on March 23 at $81.75
Earnings Date 05/10/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on March 22nd, 2011


Jones Lang Lasalle Inc. - JLL - close: 98.49 change: -0.43

Stop Loss: 93.85
Target(s): 102.50, 109.00
Current Option Gain/Loss: -29.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/23 update: JLL underperformed today with a -0.4% loss but shares rebounded near its rising 40-dma and the $97 level. This intraday bounce could be a new bullish entry point to buy calls. 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: 83.30 change: +1.34

Stop Loss: 78.49
Target(s): 84.95, 89.00
Current Option Gain/Loss: -37.5%
Time Frame: 4 to 7 weeks
New Positions: see trigger

Comments:
03/23 update: Good news - there was no follow through lower on PII's bearish reversal from yesterday. Traders bought the dip pretty early this morning and PII posted a +1.6%$ gain. More conservative traders might want to consider stops a little closer to the $80 level.

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: 81.02 change: +0.63

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:
03/23 update: It was a light volume day for QSII and shares rallied toward short-term resistance near $81.00. The high today was $81.21. There is no change from my prior comments. I remain cautious. Readers may want to wait for a move over $81.25 before considering new bullish 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: 61.88 change: +0.51

Stop Loss: 57.95
Target(s): 64.75, 69.00
Current Option Gain/Loss: -15.3%, and - 2.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/23 update: The action in WFMI was encouraging. Yesterday I suggested readers look for dips near the $60 level and today WFMI dipped to $60.40 before bouncing to a new relative high. I would still consider new positions now at current levels. More conservative traders might want to ratchet up their stops.

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: 66.16 change: +1.64

Stop Loss: 68.15
Target(s): 60.25, 57.50
Current Option Gain/Loss: -45.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/23 update: Yesterday INFY didn't really react to a bounce in the Indian stock market. Yet today the rally back home in India seemed to pick up speed. This could have been the driving force behind INFY's +2.5% gain. The stock opened higher and eventually closed over the $66 level. Shares settled near technical resistance at the simple and exponential 200-dma.

More conservative traders might want to adjust their stop losses lower in case INFY continues to rally tomorrow. I am not suggesting new positions at this time. Let's wait and see if there is any follow through tomorrow.

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


Everest Re Group Ltd. - RE - close: 82.03 change: +0.35

Stop Loss: 84.25
Target(s): 76.00, 71.00
Current Option Gain/Loss: - 5.0%, and -18.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/23 update: Bloomberg reported that the earthquake-tsunami disaster in Japan could be the most expensive natural disaster the world has ever seen with some damage estimates north of $300 billion. Thus I was a little surprised to see shares of RE bouncing higher this afternoon. Obviously this was a reaction to the market's bounce. Readers could wait for a new failed rally under $84.00 or a new drop under $80.00 if you don't feel comfortable buying puts here at current levels.

Our plan was to keep our position size small to limit our risk. Our targets are $76.00 and $71.00. I would keep our position size small to limit our exposure.

- Small Bearish Positions -

Long the April $80 PUTs (RE1116P80) Entry @ $1.00

- or -

Long the May $80 PUTs (RE1121Q80) Entry @ $2.50

Entry on March 23rd at $81.43
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 381 thousand
Listed on March 22nd, 2011