Editor's Note:

The S&P 500 bounced from its 50-dma and the NASDAQ has rebound back above its 50-dma thanks to a bullish session on Wall Street. There was no follow through after yesterday's potentially bearish reversal pattern and traders rushed to buy the dip.

We had PNRA hit our trigger to buy calls this afternoon.

-James

Current Portfolio:


CALL Play Updates

Baker Hughes - BHI - close: 74.16 change: +0.40

Stop Loss: 67.95
Target(s): 76.50, 79.75
Current Option Gain/Loss: +67.0% and +36.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/29 update: After Monday's rally higher shares of BHI spent Tuesday's session consolidating sideways. I remain bullish here but would prefer to launch new positions on a dip into the $73.00-72.50 zone. 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

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: 136.00 change: +2.33

Stop Loss: 124.00
Target(s): 139.00, 147.50
Current Option Gain/Loss: + 89.0%, and + 78.4%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
03/29 update: BIDU was a strong outperformer on Tuesday with a +1.7% gain. The good news is that BIDU did not see any follow through lower on yesterday's bearish reversal pattern. I am not suggesting new positions at this time.

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

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: 110.54 change: +1.14

Stop Loss: 103.75
Target(s): 109.00, 114.00
Current Option Gain/Loss: +63.2%, and +47.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/29 update: It was another strong session for Dow-component CAT. Shares rallied off their morning lows to tag a new all-time high at $110.79. There is no change from my prior comments. CAT looks short-term overbought and due for a dip. Our secondary target to exit is $114.00 but expect a dip first. 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%

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: 52.01 change: +0.43

Stop Loss: 49.49
Target(s): 54.75, 59.00
Current Option Gain/Loss: - 2.6% and -60.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/29 update: Financial stocks are still lagging behind the rest of the market but COF did manage to outperform most of its peers. Shares bounced from $51.16 this morning to post at +0.8% gain. Recently I have been suggesting readers look for a dip near $50.00 before launching positions. Now I'd look for dips into the $51.25-50.50 zone. 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

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: 80.01 change: +0.23

Stop Loss: 73.45
Target(s): 79.90, 83.75
Current Option Gain/Loss: +58.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/29 update: CSX is hovering near its highs and near round-number, psychological resistance at the $80 level. The stock was upgraded this morning but the news failed to have much impact on the stock price. CSX remains short-term overbought and due for a dip. I would expect a dip toward the $77-75 zone. Wait for the pull back before considering new bullish positions. Don't forget that we plan to exit before CSX reports earnings in two or three weeks.

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 (CSX1116D80) Entry @ $1.06

03/28 1st Target Hit @ 79.90, Option @ $1.90 (+79.2%)

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: 100.00 change: -0.91

Stop Loss: 95.40
Target(s): 102.50, 109.00
Current Option Gain/Loss: -19.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/29 update: JLL spent most of the day churning on either side of round-number, psychological support near the $100.00 mark. The lack of participation in the market's gains is a little worrisome but this dip near $100 could be used as a new bullish entry point.

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

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: 69.56 change: +0.79

Stop Loss: 64.90
Target(s): 72.00, 74.90
Current Option Gain/Loss: +100.0%, and +46.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/29 update: NSC garnered another analyst upgrade and shares rallied +1.1% to a new two-year high. The stock is nearing what could be round-number resistance at $70.00. I would not be surprised to see NSC tag the $70 area and then pull back to the $68-66 zone. Wait for the pull back before launching new positions. 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

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: 85.90 change: +1.55

Stop Loss: 79.75
Target(s): 84.95, 89.00
Current Option Gain/Loss: +17.5%
Time Frame: 4 to 7 weeks
New Positions: see trigger

Comments:
03/29 update: Traders bought the dip in PII near $84 this morning and shares rallied to a new a new all-time high at $86.12. More conservative traders may want to consider raising their stop loss. I am not suggesting new positions at current levels but readers could look for a dip or bounce near the 10-dma as a possible entry point.

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%)

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


Panera Bread Co. - PNRA - close: 123.47 change: +1.35

Stop Loss: 119.00
Target(s): 129.50, 134.50
Current Option Gain/Loss: - 5.1%, and -23.8%
Time Frame: 3 to 5 weeks
New Positions: see below R

Comments:
03/29 update: Bingo! Our bullish play on PNRA is now open. The stock gapped open lower near $120 thanks to one analyst firm downgrading the stock to "neutral". Traders bought the dip anyway and PNRA rallied to a new all-time high past recent resistance. Shares also hit our trigger to buy calls at $123.55 this afternoon. I would still consider new position now. We have a stop loss at $119.00. Our upside targets are $129.50 and $134.50. We do not want to hold over the late April earnings report but that date is currently unconfirmed.

FYI: PNRA is currently trading in the $120 area. The last time the company had a stock split it was back in June 2005 with shares in the $120s. You never know when they might announce a split although if they do it would probably be with their earnings report.

- Suggested Positions -

Long the April $125 call (PNRA1116D125) Entry @ $2.05

- or -

Long the May $130 call (PNRA1121E130) Entry @ $3.35

chart:

Entry on March 29th at $123.55
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 363 thousand
Listed on March 26th, 2011


Quality Systems Inc. - QSII - close: 83.10 change: +1.02

Stop Loss: 78.60
Target(s): 87.25, 94.50
Current Option Gain/Loss: -44.4%, and - 2.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/29 update: Tuesday proved to be a bullish session for QSII. The stock closed at new all-time highs above the $83.00 level. As long as the market cooperates shares look poised to make a run at $85 soon. I am tempted to move our first profit target down from $87.25 toward the $85 area.

Momentum traders could buy this breakout. I would prefer to buy a dip near $81.00.

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

03/24 New stop loss @ 78.60

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: 64.35 change: +0.99

Stop Loss: 58.49
Target(s): 64.75, 69.00
Current Option Gain/Loss: +64.6%, and +37.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/29 update: WFMI did not see much weakness this morning and shares closed near their highs for the session. There is a good chance that WFMI could hit our first profit target at $64.75 tomorrow. I am moving our stop loss up to $59.49.

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

03/29/11 new stop loss @ 59.49
03/26/11 New stop loss @ 58.49

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


Wellpoint Inc. - WLP - close: 69.35 change: +0.39

Stop Loss: 65.75
Target(s): 72.25, 74.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see trigger

Comments:
03/29 update: WLP did not see a lot of action today. Shares spent the session consolidating sideways near $69. We are still waiting for a dip to $68.25. However, just in case WLP does not see a dip I'm adding an alternative entry point to buy calls at $70.25 (if triggered at $70.25 we'll move our stop to $66.75. We do not want to hold over the late April earnings report.

FYI: Readers may want to keep their position size small.

Trigger @ 68.25 or $70.25

- Suggested Positions -

Buy the April $70 call (WLP1116D70) current ask $1.23

- or -

Buy the May $70 call (WLP1121E70) current ask $2.45

Entry on March xxth at $ xx.xx
Earnings Date 04/27/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on March 26th, 2011


PUT Play Updates

Everest Re Group Ltd. - RE - close: 83.00 change: +0.39

Stop Loss: 84.25
Target(s): 76.00, 71.00
Current Option Gain/Loss: -50.0%, and -40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/29 update: RE is still churning sideways between resistance at its exponential 200-dma and support in the $81-80 zone although in just the last couple of days that support has narrowed to the simple 200-dma. RE has not been performing as expected and I'm tempted to close it early for lack of movement. I remain very cautious and I'm not suggesting new 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

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