Editor's Note:

The rally in precious metals continues with gold and silver surging to new highs on Friday. Transports have thus far been able to ignore the three-day bounce in oil prices. This week we will hear from hundreds of companies reporting their Q1 earnings results. Traders should expect a lot of volatility for individual stocks. The newsletter prefers to avoid risk by not holding an option position over an earnings announcements.

-James

Current Portfolio:


CALL Play Updates

CH Robinson Worldwide Inc. - CHRW - close: 76.64 change: +1.25

Stop Loss: 73.25
Target(s): 79.50
Current Option Gain/Loss: +33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/16 update: CHRW leapt to a new multi-week high thanks to an analyst upgrade before the opening bell. The stock is now trading above potential resistance near $76.00 and its 100-dma. I would prefer to not chase it here. If you are looking for a new bullish entry point wait for a dip near $75.00. Keep in mind our time frame. CHRW is due to report earnings on April 26th and we do not want to hold over the announcement. I would keep your position size small to limit your risk.

Please note our new stop loss at $73.25. Cautious traders might want to up their stop closer to $74.00 or $74.50ish.

- Suggested Positions -

Long the May $75.00 calls (CHRW1121E75) Entry @ $2.25

04/16 new stop loss @ 73.25
04/09 New stop loss @ 72.75

chart:

Entry on April 7th at $74.50
Earnings Date 04/26/11(confirmed)
Average Daily Volume = 1.2 million
Listed on April 2nd, 2011


Fortune Brands - FO - close: 63.31 change: +0.09

Stop Loss: 61.75
Target(s): 67.50, 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
04/16 update: For the second day in a row FO spiked lower at the open and for the second day in a row traders bought the dip. Shares remain under resistance in the $63.50 area. We are still waiting for a breakout. Currently our plan is to buy calls when FO hits $64.00. Now that we know earnings are in early May it gives us about three weeks for this trade to work.

If triggered at $64.00 our targets are $67.50 and $69.75. I would keep our position size small to limit our risk.

FYI: A move past $64.00 would create a brand new quadruple top breakout buy signal.

Trigger @ $64.00 (Small Positions)

- Suggested Positions -

Buy the May $65.00 call (FO1121E65) current ask $1.25

chart:

Entry on April xxth at $ xx.xx
Earnings Date 05/05/11 (confirmed)
Average Daily Volume = 973 thousand
Listed on April 5th, 2011


Fossil Inc. - FOSL - close: 94.48 change: +0.85

Stop Loss: 91.95
Target(s): 99.75, 104.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
04/16 update: FOSL is still consolidating sideways in the $92-95 zone. Traders have been buying dips in FOSL near the $92.00 level and they did so again today. We are waiting for a breakout from this range.

I do consider this an aggressive trade since we're looking at bullish positions with the market's major indices still acting vulnerable to new declines. However, FOSL has been able to ignore the market's weakness thus far. I am suggesting we open small bullish positions with a trigger at $95.60. If triggered our first target is $99.75. The $100.00 mark is probably round-number, psychological resistance. We'll set a secondary target at $104.75 but that might be wishful thinking.

Trigger @ 95.60 (small positions only)

- Suggested Positions -

Buy the May $100 call (FOSL1121E100) current ask $2.65

- or -

Buy the June $100 call (FOSL1118F100) current ask $3.70

chart:

Entry on April xxth at $ xx.xx
Earnings Date 05/10/11 (unconfirmed)
Average Daily Volume = 858 thousand
Listed on April 13th, 2011


SPDR Gold ETF - GLD - close: 145.05 change: +1.24

Stop Loss: 137.00
Target(s): 149.50, 154.50
Current Option Gain/Loss: +35.8%, and +27.0%
2nd Option Position Gain/loss: +68.9% and +53.6%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
04/16 update: Momentum continues for the precious metals. There are plenty of investors who think gold has run out of gas but the commodity continues to rally. The GLD hit a new all-time high on Friday at $145.12. I am not suggesting new positions at this time. We'll wait to evaluate the next dip.

More conservative traders can tighten their stops closer to $139 or $140. The newsletter's stop is at $137.00. Our targets are $149.50 and $154.50 within the next six to twelve weeks.

FYI: The Point & Figure chart for GLD is bullish with a $172 target.

- Suggested Positions -

Long the May $145 call (GLD1121E145) Entry @ $1.84

- or -

Long the June $150 call (GLD1118F150) Entry @ $1.33

- Second Entry Point, April 12th, Entry April 13th -

Long the May $145 call (GLD1121E145) Entry @ $1.48

- or -

Long the June $150 call (GLD1118F150) Entry @ $1.10

chart:

Entry on April 6th at $142.40
Earnings Date --/--/--
Average Daily Volume = 12.5 million
Listed on April 5th, 2011


Intuit - INTU - close: 54.46 change: +0.18

Stop Loss: 53.45
Target(s): 57.50, 59.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
04/16 update: INTU spiked to a new multi-year high on Friday (@ $55.12) but it was not enough to open our play. INTU has resistance in the $54.00-55.00 zone. Our plan is to buy calls when shares hit $55.25.

If triggered we'll use a stop at $53.45. I would keep our position size small to limit our risk (1/2 or less than your normal trade size).

Trigger @ 55.25

- Suggested Positions -

Buy the May $55.00 call (INTU1121E55) current ask $1.75

chart:

Entry on April xxth at $ xx.xx
Earnings Date 05/19/11 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on April 14th, 2011


Norfolk Southern - NSC - close: 67.74 change: +0.76

Stop Loss: 65.90
Target(s): 72.00, 74.90
Current Option Gain/Loss: -100.0%, and -39.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/16 update: It looks like the correction in the railroad stocks might be over. The bounce in the DJUSRR railroad index looks like a potential bullish entry point. Shares of NSC still look a little weak but the stock did add +1.1% on Friday. Aggressive traders may want consider buying this bounce. We've been waiting for a dip near $66.00 but that may not happen now. A new rally past the simple 10-dma or the $68.50 level could work as an alternative entry point to buy calls on NSC. The $66.00 level continues to look like support so we'll up our stop loss to $65.90.

Don't forget that earnings are April 27th and we do not want to hold over the announcement.

Our targets are $72.00 and $74.90.

- Suggested Positions -

April $70 calls (NSC1116D70) Entry @ $0.50, Expired @ -100%

- or -

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

04/16 New stop loss @ 65.90
04/16 April $70 calls have expired (-100%)
04/09 New stop loss @ 65.70

chart:

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


Panera Bread Co. - PNRA - close: 124.65 change: +1.23

Stop Loss: 119.00
Target(s): 129.50, 134.50
Current Option Gain/Loss: -100.0%, and -17.9%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
04/16 update: PNRA has continued to bounce and shares did close over short-term resistance near $124.00 but the rally on Friday was not enough for the April $125 calls. These calls have expired at -100%.

The very short-term trend looks bullish for PNRA but readers may want to wait for another dip near $122.50-122.00 before considering new bullish positions. Bear in mind that we will plan to exit ahead of the April 26th earnings report. Our final target for the May calls is $134.50.

- Suggested Positions -

April $125 call (PNRA1116D125) Entry @ $2.05, Expired @ -100%

- or -

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

04/16 April calls have expired @ -100%
04/04 1st Target Hit @ 129.50. The April option was at $4.82 (+135.1%) and the May option was at $5.25 (+56.7%)

chart:

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


Praxair Inc. - PX - close: 103.15 change: +1.30

Stop Loss: 98.90
Target(s): 104.75, 109.00
Current Option Gain/Loss: +10.2%, and + 7.1%
2nd Position Gain/Loss: +30.3%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
04/16 update: The rebound in PX continues and shares were showing relative strength on Friday with a +1.2% gain. The stock is nearing potential resistance at its recent highs near $104. I would not launch new bullish positions at this time.

Our first target to take profits is at $104.75. Our second and final target is $109.00. We will plan to exit ahead of the April 27th earnings report.

- Suggested Positions -

Long the May $100 call (PX1121E100) entry @ $3.90

- or -

Long the May $105 call (PX1121E105) entry @ $1.40

- Second Entry Point, April 12th, Entry April 13th -
- Keep Positions Small -

Long the May $100 call (PX1121E100) Entry @ $3.30

04/12 New stop loss at $98.90
04/12 Second position on dip near $100
04/09 new stop loss @ 97.90

chart:

Entry on March 30th at $101.54
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 1.4 million
Listed on March 29th, 2011


Sohu.com - SOHU - close: 95.38 change: -0.76

Stop Loss: 89.75
Target(s): 99.90, 107.50
Current Option Gain/Loss: - 8.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/16 update: It was a quiet Friday for SOHU. Shares hovered near the $95.00 strike price, waiting for option expiration to be over. The stock is still lagging behind some of its peers (BIDU, SINA). I would hesitate to launch new positions in SOHU. More conservative traders will want to seriously consider upping their stop toward $92.00, which looks like it could be short-term support. We do not want to hold positions over the April 25th earnings report.

Our first target to take profits is at $99.90.

I want to reiterate that this is an aggressive, higher-risk trade. I'm suggesting we keep our position size small to limit our risk. FYI: The Point & Figure chart for SOHU is bullish with a $120 target.

- Suggested Positions -

Long the May $100 call (SOHU1121E100) Entry @ $4.25

04/13 New stop loss @ 89.75
04/11 Adjusted first exit target to $99.90

chart:

Entry on April 4th at $92.50
Earnings Date 04/25/11 (confirmed)
Average Daily Volume = 1.1 million
Listed on April 2nd, 2011


Stericycle Inc. - SRCL - close: 91.93 change: +1.27

Stop Loss: 87.75
Target(s): 93.50, 98.50
Current Option Gain/Loss: +52.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
04/16 update: SRCL is starting to breakout higher from a weeklong consolidation near the $90.00 area. Friday's move looks like a new entry point. We will raise our stop loss to $87.75. More aggressive traders will want to keep their stop under the 50-dma instead. We plan to exit ahead of the April 27th earnings report. Our targets are $93.50 and $98.50.

- Suggested Positions -

Long the May $90 calls (SRCL1121E90) Entry @ $2.50

04/16 new stop loss @ 87.75
04/04 New stop loss @ 86.75
04/02 New stop loss @ 85.75

chart:

Entry on March 30th at $88.93
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 479 thousand
Listed on March 29th, 2011


Vertex Pharmaceuticals - VRTX - close: 48.02 change: +0.43

Stop Loss: 45.95
Target(s): 51.85, 58.50
Current Option Gain/Loss: - 8.0%
Time Frame: about 2, maybe 3 weeks
New Positions: see below

Comments:
04/16 update: VRTX looks poised to rally. Technically the stock is trading in a neutral pattern of higher lows and lower highs so the stock could breakout either way. Yet if you look more closely the stock has bounced more than once in the $46.50-47.00 zone. Thus far nothing has changed from my prior comments. We can choose to buy dips near $47 or wait for a rally past $49.00 as our entry point.

Our first target is $51.85. Our second, much more aggressive target is $58.50 but again, we don't have a lot of time so we may have to exit early. I am listing our stop at $45.95, under last week's lows.

- Very Small Bullish Positions -

Long the May $50.00 calls (VRTX1121E50) Entry @ $2.50

chart:

Entry on April 10th at $48.28
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on April 9th, 2011


Whole Foods Market Inc. - WFMI - close: 64.71 change: -0.26

Stop Loss: 61.70
Target(s): 64.75, 69.00
Current Option Gain/Loss: -100.0%, and +28.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/16 update: WFMI saw a little bit of profit taking on Friday morning but traders were in a buy the dip mode. Shares closed near the $65 strike price. Our April $65 calls have expired at -100%. I am not suggesting new bullish positions at this time.

- Suggested Positions -

April $65 calls (WFMI1116D65) Entry @ $0.65, Expired -100%

- or -

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

04/16/11 April calls have expired @ -100%
04/13/11 New stop loss @ 61.70
04/02/11 new stop loss @ 59.90
03/30/11 1st Target Hit @ 64.75, April $65 call @ 1.25 (+92.3%)
May $65 call @ 3.50 (+55.5%)
03/29/11 new stop loss @ 59.49
03/26/11 New stop loss @ 58.49

chart:

Entry on March 21 at $61.55
Earnings Date 05/04/11 (confirmed)
Average Daily Volume = 1.9 million
Listed on March 19th, 2010


Whiting Petroleum Corp - WLL - close: 70.61 change: +0.80

Stop Loss: 64.45
Target(s): 69.75, 74.00
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks maybe
New Positions: Yes, see trigger

Comments:
04/16 update: Crude oil has produced a three-day bounce following the sharp sell-off early in the week. This rebound in the commodity is helping buoy the energy sector. Shares of WLL have been hovering near the $70 area. We're still waiting for a dip lower. I am suggesting we buy calls on a dip at $66.00. More aggressive traders may want to jump in early on a dip near the rising 50-dma. If triggered our targets are $69.75 and $74.00. We do not want to hold over the late April earnings report but so far the date is unconfirmed.

Trigger @ $66.00

- Suggested Positions -

Buy the May $70 call (WLL1121E70) current ask $2.70

chart:

Entry on April xxth at $ xx.xx
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on April 11th, 2011


Wellpoint Inc. - WLP - close: 69.41 change: -0.10

Stop Loss: 67.45
Target(s): 72.25, 74.75
Current Option Gain/Loss: - 100%, and -40.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
04/16 update: WLP tried to rally this morning but the stock was unable to breakout past resistance at the $70.00 level. The stock has been stuck under this level for over a week now. Unfortuantely, this means the April $70 calls have now expired worthless (-100%). I don't see any changes from my prior comments.

More conservative traders may want to up their stops closer to $68.00 or $68.50. Wednesday's high was $70.24. I would wait for a rise past $70.25 before considering new positions. We do not want to hold over the late April earnings report.

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

- Suggested Positions -

April $70 call (WLP1116D70) Entry @ $1.55, Expired @ -100%

- or -

Long the May $70 call (WLP1121E70) Entry @ $2.80

04/16 April calls have expired @ -100%
04/09 New stop loss @ 67.45
04/02 new stop loss @ 66.75

chart:

Entry on April 1st at $70.25
Earnings Date 04/27/11 (confirmed)
Average Daily Volume = 3.4 million
Listed on March 26th, 2011


PUT Play Updates

Apollo Group Inc. - APOL - close: 40.10 change: +0.14

Stop Loss: 44.25
Target(s): 38.15, 35.50
Current Option Gain/Loss: +19.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/16 update: I am not surprised to see APOL spend Friday hovering near the $40.00 strike price. The overall trend is down but readers may want to wait for another failed rally under $42 or the 200-dma before considering new positions. More conservative traders may want to use a stop closer to $43.50 instead. Our profit targets are $38.15 and $35.50.
The Point & Figure chart for APOL is bullish with a $31 target.

- Suggested Positions -

Long the May $40.00 puts (APOL1121Q40) Entry @ $1.24

chart:

Entry on April 13th at $41.21
Earnings Date 06/30/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on April 12th, 2011