Editor's Note:

We had two bullish candidates hit our profit targets on Friday. I'm also suggesting we lock in gains on two more. I did update a few stop losses tonight.

-James

Current Portfolio:


CALL Play Updates

Baker Hughes - BHI - close: 71.08 change; -0.24

Stop Loss: 67.95
Target(s): 76.50, 79.75
Current Option Gain/Loss: -28.0% and -18.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/26 update: To be honest I'm a little surprised and disappointed with the action in BHI. Bigger picture the stock looks poised to move higher. Yet shares have been underperforming the energy sector the last couple of days. Traders did buy the dip near $70 on Friday but BHI failed to post a gain.

Readers may want to wait for a new move higher past $72.50 or you could even wait for a close over the $72.00 level before considering new bullish positions. Our first target is $76.50. Our second target is $79.75. More aggressive traders could aim higher. FYI: If BHI can breakout past the $72.00 level it would create a new quadruple top breakout buy signal on its Point & Figure chart.

- Suggested Positions -

Long the April $75 calls (BHI1116D75) Entry @ $1.00

- or -

Long the May $75 calls (BHI1121E75) Entry @ $2.61

chart:

Entry on March 24th at $72.35 *gap higher*
Earnings Date 05/03/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on March 23rd, 2011


Baidu, Inc. - BIDU - close: 134.92 change: +1.45

Stop Loss: 124.00
Target(s): 139.00, 147.50
Current Option Gain/Loss: +109.3%, and + 65.6%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
03/26 update: The rally in BIDU continues with the stock tagging another new high at $136.49 on Friday. Shares do look short-term overbought here so I would expect a little pull back. The dip could see BIDU retest the $130 level or even the $125 area. I am suggesting we move our stop loss higher from $119.95 to $124.00. I am not suggesting new positions at this time. Let's wait for a dip.

Our first target to take profits is at $139.00. 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

03/26 New stop loss @ 124.00

chart:

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: 109.09 change: +0.72

Stop Loss: 103.75
Target(s): 109.00, 114.00
Current Option Gain/Loss: +58.8%, and +31.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/26 update: Target achieved. CAT is now the best performing Dow Industrials component for 2011. Shares continued to rally and hit resistance near the $110 level before paring its gains. Our first target to take profits was hit at $109.00 pretty early this morning. We still have a secondary target at $114.00 but I would expect a little correction lower first. The $106-104 zone should offer some support so I am raising our stop loss to $103.75. I am not suggesting new positions at this time.

- Suggested Positions -

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

- or -

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

03/26/11 New stop loss @ 103.75
03/25/11 1st Target Hit @ 109.00, Options @ +58.8%, +37.7%

chart:

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


Capital One Financial - COF - close: 52.23 change: +0.37

Stop Loss: 49.49
Target(s): 54.75, 59.00
Current Option Gain/Loss: + 6.4% and -44.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/26 update: COF inched higher on Friday and did so with very light volume. I suspect that this stock could see a dip back toward the $51 area again. I would wait for that pull back before launching new positions. 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

03/24 New stop loss @ 49.49

chart:

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: 79.16 change: +0.20

Stop Loss: 73.45
Target(s): 79.90, 83.75
Current Option Gain/Loss: +48.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/26 update: CSX is still inching higher but the stock seems to be running out of air. Momentum is slowing and CSX looks poised for some profit taking. I would expect a dip back into the $77-75 zone. Wait for the pull back before considering 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

chart:

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: 101.42 change: +0.78

Stop Loss: 95.40
Target(s): 102.50, 109.00
Current Option Gain/Loss: + 8.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/26 update: JLL saw a nice rally higher on Friday morning but gains faded by the closing bell. The move looks like a failed rally test of resistance at its February highs near $103. There is a good chance JLL will retest the $100 level soon and possibly the $98 level again. Wait for the dip or a bounce before considering new bullish positions.

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

03/24 New stop loss @ 95.40
03/17 Exited March calls @ open, Estimated exit @ 0.10 (-94.2%)
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


Norfolk Southern - NSC - close: 68.68 change: +0.93

Stop Loss: 64.90
Target(s): 72.00, 74.90
Current Option Gain/Loss: +50.0%, and +25.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/26 update: Railroad stocks were strong performers on Friday. NSC gained +1.3% and tagged a new two-year high. I don't see any changes from my prior comments. I would still consider new positions now or you could wait for a potential dip into the $67.50-66.00 zone. Our targets are $72.00 and $74.90. We do not want to hold past NSC's late April earnings report.

- Suggested Positions -

Long the April $70 calls (NSC1116D70) Entry @ $0.50

- or -

Long the May $70 calls (NSC1121E70) Entry @ $1.40

chart:

Entry on March 25th at $67.84
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 3.0 million
Listed on March 24th, 2011


Polaris Industries, Inc. - PII - close: 85.11 change: +2.01

Stop Loss: 78.49
Target(s): 84.95, 89.00
Current Option Gain/Loss: +10.0%
Time Frame: 4 to 7 weeks
New Positions: see trigger

Comments:
03/26 update: Target achieved. PII was a strong performer on Friday with a +2.4% gain and a rally through resistance near the $85.00 level. Our first target to take profits was hit at $84.95, unfortunately, the option didn't perform very well. We still have a secondary target at $89.00. I am not suggesting new positions at this time. Consider waiting for a dip near the rising 10-dma. I am raising our stop loss to $79.75.

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

03/26/11 New stop loss @ 79.75
03/25/11 1st Target Hit @ 84.95, Option @ $2.10 (+5%)

chart:

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: 81.99 change: +0.40

Stop Loss: 78.60
Target(s): 87.25, 94.50
Current Option Gain/Loss: -51.8%, and - 8.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/26 update: QSII has rallied toward its early March highs. This could be short-term resistance and I would expect another dip toward the $81 area before shares make any further progress. We can use dips near $81 as a new entry point.

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

03/24 New stop loss @ 78.60

chart:

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: 63.96 change: +0.78

Stop Loss: 58.49
Target(s): 64.75, 69.00
Current Option Gain/Loss: +58.4%, and +33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/26 update: A drop in consumer sentiment failed to have an impact on shares of WFMI. The stock posted another gain and hit new multi-year highs. I am adjusting our stop loss higher to $58.49. More conservative traders might want to move their stops closer to the $60.00 level. I'm not suggesting new positions at current levels. A dip near $62-61 might be a new entry point.

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

03/26/11 New stop loss @ 58.49

chart:

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

Everest Re Group Ltd. - RE - close: 82.95 change: +0.36

Stop Loss: 84.25
Target(s): 76.00, 71.00
Current Option Gain/Loss: -45.0%, and -38.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/26 update: I remain very cautious on our RE put play. The stock bounced again on Friday but failed to rally past technical resistance at its exponential 200-dma. Given the strength in the broader market any bearish play could be a tough challenge to find. More conservative traders may want to exit early right now. I am not suggesting new bearish positions at this time.

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

- Small Bearish Positions -

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

- or -

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

chart:

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


CLOSED BULLISH PLAYS

Cerner Corp. - CERN - close: 108.98 change: +0.33

Stop Loss: 101.90
Target(s): 104.85, 109.50
Current Option Gain/Loss: +81.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/26 update: I am suggesting an early exit in CERN. Take profits now. Our plan was to exit at $109.50 but shares rally to $109.48 on Friday before paring its gains. CERN, like the major stock market indices, looks a little overbought here. I would rather take profits now. We can reconsider new bullish positions on a dip near the $105 or $101 levels.

- Suggested Positions -

April $105 calls (CERN1116D105) Entry @ $2.70, Exit @ $4.90 (+81.4%)

03/26 Exit Early. CERN @ $108.98. Option @ +81.4%
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%)

chart:

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


Fossil, Inc. - FOSL - close: 88.53 change: +3.01

Stop Loss: 78.75
Target(s): 84.90, 89.75
Current Option Gain/Loss: +190.9%, and +65.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/26 update: The rally in FOSL accelerated higher on Friday. The stock garnered a new analyst buy rating and shares surged +3.5%. The high on Friday was $89.42. Our second and final target has been $89.75. I am suggesting we go ahead and take profits now! More aggressive traders can let it ride and just adjust your stop losses higher.

While we are exiting early to lock in gains now I would keep FOSL on your watch list. A Dip back toward $85 or $80 could be a new bullish entry point.

- Suggested Positions -

April $85 calls (FOSL1116D85) Entry @ $1.65, Exit @ 4.80 (+190.9%)

- or -

May $85 calls (FOSL1121E85) Entry @ $4.35, Exit @ 7.20 (+65.5%)

03/26 Exit Early. Options @ +190.9% and +65.5%
03/24 1st Target Hit @ $84.90. Options @ +66% & +28.7%

chart:

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