Editor's Note:

The stock market failed to see any lasting reaction to the news that Osama Bin Laden is dead. The major indices settled with minor losses. Oil service stocks, and some of the commodities (like silver) were big underperformers today.

Our FOSL play has been stopped out and I'm suggesting an early exit in our VRTX trade.

-James

Current Portfolio:


CALL Play Updates

Acme Packet Inc. - APKT - close: 78.18 change: -4.43

Stop Loss: 74.45
Target(s): 89.00, 97.50
Current Option Gain/Loss: -49.5% and -34.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/02 update: I could not find any specific reason behind APKT's relative weakness on Monday. I warned readers that APKT could be volatile so it's probably just normal profit taking. Actually I would be tempted to use this dip as a new entry point but you could wait for a bounce in the $76-78 zone first before initiating positions. Let's keep our position size small to limit our risk. Broken resistance at $75.00 should be new support.

Our upside targets are $89.00 and $97.50. FYI: The Point & Figure chart for APKT is bullish with a $95 target.

- Suggested Positions - (SMALL POSITIONS)

Long the May $85 call (APKT1121E85) Entry @ $2.28

- or -

Long the June $85 call (APKT1118F85) Entry @ $4.49

Entry on April 29th at $81.20
Earnings Date 04/26/11
Average Daily Volume = 2.5 million
Listed on April 28th, 2011


Deere & Co - DE - close: 97.39 change: -0.11

Stop Loss: 92.49
Target(s): 99.70, $104.00
Current Option Gain/Loss: +47.8%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
05/02 update: Monday proved to be a quiet day for DE. If the market decline continues we can look for a dip near $95 as a new entry point. We will not hold positions over the mid May earnings report.

- Suggested Positions -

Long the May $97.50 call (DE1121E97.5) Entry @ $1.61

04/30 Adjusted targets to $99.70 and $104.00.

Entry on April 21st at $95.25
Earnings Date 05/18/11 (unconfirmed)
Average Daily Volume = 3.8 million
Listed on April 20th, 2011


Fastenal Co. - FAST - close: 66.89 change: -0.20

Stop Loss: 63.75
Target(s): 69.50, 74.00
Current Option Gain/Loss: - 4.5% & - 6.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/02 update: FAST didn't see a lot of movement today. Shares were slowly fading lower before the stock pared its losses this afternoon. I don't see any changes from my prior comments. I'd wait for a new dip or bounce in the $66-65 zone before considering new positions.

More conservative traders might want to raise their stops. Our targets are $69.50 and $74.00. We should expect the $70.00 area to offer some resistance and FAST will likely pull back on the first test of $70.

FYI: FAST is due to split 2-for-1 on May 23rd. Plus, the Point & Figure chart for FAST is bullish with a $72 target.

- Suggested Positions -

Long the May $65.00 calls (FAST1121E65) Entry @ $2.20

- or -

Long the June $70.00 calls (FAST1118F70) Entry @ $0.75

Entry on April 26th at $66.25
Earnings Date 04/12/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on April 23rd, 2011


Fortune Brands - FO - close: 64.53 change: -0.55

Stop Loss: 61.75
Target(s): 67.50, 69.75
Current Option Gain/Loss: - 15.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/02 update: It's not surprising to see a little profit taking in FO and the $64.00-63.50 area should be support. Yet we're almost out of time. The earnings report is Thursday, May 5th before the opening bell. This means we need to exit on Wednesday at the close to avoid holding over earnings. More conservative traders might want to consider inching up their stop loss.

(Small Positions) - Suggested Positions -

Long the May $65.00 call (FO1121E65) Entry @ $1.00

Entry on April 26th at $64.00
Earnings Date 05/05/11 (confirmed)
Average Daily Volume = 973 thousand
Listed on April 5th, 2011


SPDR Gold ETF - GLD - close: 150.41 change: -1.96

Stop Loss: 149.75
Target(s): ---.--, 154.50
Current Option Gain/Loss: +226.0%, and +208.2%
2nd Option Position Gain/loss: +305.4% and +272.7%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
05/02 update: The GLD briefly traded to a new high this morning at $153.61 before reversing lower. This afternoon the market started to see profit taking across the commodity space. The GLD lost -1.2% but silver fell about -9%. We currently have a stop loss at $149.75 for our GLD trade. More conservative traders may want to take profits now! I am not suggesting new positions at this time.

- 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

04/30 New stop loss @ 149.75, consider taking profits now!
04/27 New stop loss @ 141.90
04/26 UPDATE: The gap down on Tuesday morning affected our exit prices. May $145 call @ +58.6% and +97.2%. June $150 calls @ +68.4% and +103.6%
04/25 Take Profits Now. Sell all or part of our position. Options are at: May $145 calls $3.50 (+90.2% & +136.4%), June $150 calls $2.76 (+107.5% & +150.9%)
04/20 New stop loss @ 139.90

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


Google Inc. - GOOG - close: 538.56 change: -5.54

Stop Loss: 518.75
Target(s): 549.00, 558.00
Current Option Gain/Loss: +26.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
05/02 update: Warning! The action in GOOG today is bearish. The stock has produced a bearish engulfing candlestick pattern. This potentially a reversal pattern but it needs to see follow through lower. More conservative traders may want to exit early. I am not suggesting new positions at this time.

Currently our targets are at $549.00 and $558.00. FYI: The high today was $545.73.

Prior Comments:
This is a very aggressive, higher-risk trade. Keep positions small.

(Very Small Positions) Suggested Positions:

Long the May $550 call (GOOG1121E550) Entry @ $3.00

04/30 Adjusted exit strategy. First target at $549.00. Final target at $558.00.

Entry on April 25th at $525.25
Earnings Date 04/14/11 (confirmed)
Average Daily Volume = 3.3 million
Listed on April 23rd, 2011


International Business Machines - IBM - close: 172.15 change: +1.57

Stop Loss: 164.75
Target(s): 174.00, 179.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see Trigger

Comments:
05/02 update: IBM was showing relative strength today. Shares hit a new high at $173.54 this morning before settling with a +0.9% gain. We are still waiting for a pull back.

I am suggesting we buy calls on a dip at $167.50. If triggered we'll use a stop loss at $164.75. Our targets are $174.00 and $179.50. FYI: The Point & Figure chart for IBM is bullish with a $208 target.

Buy-the-Dip Trigger @ 167.50

- Suggested Positions -

Buy the June $170 calls (IBM1118F170)

Entry on April xxth at $ xx.xx
Earnings Date 04/19/11
Average Daily Volume = 4.8 million
Listed on April 27th, 2011


Intuit - INTU - close: 55.12 change: -0.44

Stop Loss: 53.45
Target(s): 58.75
Current Option Gain/Loss: -33.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/02 update: Some of INTU's technical indicators continue to deteriorate as the stock moves sideways. I remain cautious and would wait for a close over $56.00 before considering new positions. We do not want to hold over the mid May earnings date.

I would keep our position size small to limit our risk (1/2 or less than your normal trade size).

- Suggested Positions -

Long the May $55.00 call (INTU1121E55) Entry @ $2.40

04/30 Adjusted target to $58.75

Entry on April 20th at $55.25
Earnings Date 05/19/11 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on April 14th, 2011


Jos. A Bank Clothiers - JOSB - close: 50.82 change: -1.60

Stop Loss: 49.95
Target(s): 59.50
Current Option Gain/Loss: - 78.5% and -51.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/02 update: JOSB was a big underperformer today with a -3.0% decline. There was nothing specific in the news to account for today's relative weakness. Shares are likely to have support near $50.00 and the 30-dma but we have a stop loss at $49.95. A dip near $50.00 runs the risk of spiking lower intraday and hitting our stop loss. I am not suggesting new positions at this time.

FYI: The most recent data listed short interest in JOSB at more than 21% of the small 27.3 million-share float. Together the increase the risk of a short squeeze.

- Suggested Positions -

Long the May $55 calls (JOSB1121E55) entry @ $0.70

- or -

Long the June $55 calls (JOSB1118F55) entry @ $1.75

Entry on April 26th at $52.75
Earnings Date 06/02/11 (unconfirmed)
Average Daily Volume = 510 thousand
Listed on April 25th, 2011


O'Reilly Automotive - ORLY - close: 59.55 change: +0.49

Stop Loss: 57.75
Target(s): 62.75, 67.25
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see Trigger

Comments:
05/02 update: ORLY was showing relative strength today and broke out to new three-month highs. Yet shares failed to breakout past the $60.00 mark. Our plan is to buy calls at $60.15. If triggered our targets are $62.75 and $67.25. The market is a little overbought here so I would keep our position size small.

Trigger @ $60.15

- Suggested Positions -

Buy the May $60 calls (ORLY1121E60)

- or -

Buy the June $60 calls (ORLY1118F60)

Entry on May xxth at $ xx.xx
Earnings Date 04/27/11
Average Daily Volume = 1.1 million
Listed on April 30th, 2011


Powershares QQQ ETF - QQQ - close: 58.97 change: -0.05

Stop Loss: 56.45
Target(s): 64.00
Current Option Gain/Loss: Unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see Trigger

Comments:
05/02 update: The NASDAQ Composite only lost -0.3% today. The NASDAQ-100 index actually closed in positive territory although it was less than +0.2%. The QQQ slipped into the red in spite of the NDX's gain. I don't see any changes from my weekend comments. The plan is to buy calls on a dip. We're setting our buy-the-dip trigger at $58.15. More conservative traders could wait for a dip toward the 30 or 50-dma instead. If we are triggered at $58.15 we'll use a stop loss at $56.45. The Qs don't move very fast so we'll have to be patient.

buy-the-dip Trigger @ $58.15

- Suggested Positions -

Buy the June $60 calls (QQQ1118F60)

- or -

Buy the July $60 calls (QQQ1116G60)

Entry on May xxth at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 50 million
Listed on April 30th, 2011


Ross Stores Inc. - ROST - close: 73.40 change: -0.29

Stop Loss: 69.75
Target(s): 77.25, 79.50
Current Option Gain/Loss: - 2.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/02 update: ROST spiked higher this morning but traders were selling into strength near the $74.60 level. This happened twice before ROST settled lower. Today's action looks like a short-term bearish reversal pattern. I would look for a dip toward the $72.00 level soon. We do not want to hold over the mid May earnings report so I am suggesting we use the May calls, which expire after the 20th.

Our first target is $77.25. Our secondary target is $79.50. FYI: The Point & Figure chart for ROST is bullish with a $97 target.

- Suggested Positions -

Long the May $72.50 calls (ROST1121E72.5) Entry @ $2.25

Entry on April 28th at $73.55
Earnings Date 05/19/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on April 23rd, 2011


United Technologies Corp. - UTX - close: 90.00 change: +0.42

Stop Loss: 83.49
Target(s): 89.50, 94.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/02 update: The rally continues for UTX and shares posted another gain and closed right on round-number resistance at $90.00. I still think this is resistance and aggressive traders could buy puts now in an effort to scalp a couple of points on a dip. Bigger picture I'm bullish on UTX but we want to buy calls on a dip at $86.50. If triggered at $86.50 we'll use a stop loss at $83.49. Our targets are $89.50 and $94.00.

Buy-the-dip Trigger @ $86.50

- Suggested Positions -

Buy the June $90 calls (UTX1118F90)

Entry on April xxth at $ xx.xx
Earnings Date 04/20/11
Average Daily Volume = 3.7 million
Listed on April 27th, 2011


PUT Play Updates

Apollo Group Inc. - APOL - close: 40.76 change: +0.73

Stop Loss: 42.55
Target(s): 38.15, 35.50
Current Option Gain/Loss: -37.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/02 update: APOL was showing some relative strength today. That's a bit disconcerting given the market's eventual decline on Monday. APOL should have tough resistance near $42 and its 50 and 200-dma. There is no change from my prior comments.

More conservative traders may want to exit this trade immediately. I am not suggesting new positions at this time. Our profit targets are $38.15 and $35.50.
The Point & Figure chart for APOL is bearish with a $31 target.

- Suggested Positions -

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

04/19 New stop loss @ 42.55

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


iShares Silver Trust - SLV - close: 42.83 change: -4.05

Stop Loss: n/a
Target(s): 40.15 & 36.25
Current Option Gain/Loss: +25.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/02 update: It's really frustrating to be correct on a stock's direction and still have the trade not work out as you expected. Silver prices started to sell-off sharply on Sunday and the SLV gapped open lower at $44.10. Then gold and silver saw a bounce, probably due to the market's reaction to the Bin Laden death news, and then precious metals surged lower.

Our plan was to open small bearish positions with July put options. The July $40 puts opened at $2.05. Currently the bid is at $2.58 so we're not in bad shape but it would have been a lot nicer to open positions with the puts closer to $1.50 instead. All right, enough complaining.

Given the big move today (-8.6%) I would not launch new positions at this time. We can look for another failed rally in the $45-46 area as a possible entry point. Unfortunately such a move could be intraday like today's failed rally near $46.00.

We should probably expect a bounce near the $40.00 level. I am officially setting our exit targets at $40.15 and at $36.25. You will have to decide where you want to exit or sell half at the first target and half at the second.

(Small Positions) Suggested Positions -

Long the July $40.00 PUT (SLV1116S40) Entry @ $2.05

05/02 Silver dropped and the SLV gapped open lower at $44.10.

Entry on May 2 at $44.10
Earnings Date --/--/--
Average Daily Volume = 79 million
Listed on April 30th, 2011


CLOSED BULLISH PLAYS

Fossil Inc. - FOSL - close: 91.54 change: -4.24

Stop Loss: 91.95
Target(s): 99.75, 104.75
Current Option Gain/Loss: -47.1%, and -36.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/02 update: Ouch! What happened to FOSL today? The stock underperformed with a -4.4% decline. I can't find any specific news to account for this weakness. Shares broke down under last week's low and hit our stop loss at $91.95. The $90.00 level might offer some support but our play has been closed. Our plan was to keep positions small.

(small positions only) - Suggested Positions -

May $100 call (FOSL1121E100) Entry @ $2.65, Exit @ $1.40 (-47.1%)

- or -

June $100 call (FOSL1118F100) Entry @ $3.75, Exit @ $2.40 (-36%)

05/02 Stopped out @ $91.95, Options @ -47.1% & -36%

chart:

Entry on April 20th at $95.60
Earnings Date 05/10/11 (unconfirmed)
Average Daily Volume = 858 thousand
Listed on April 13th, 2011


Vertex Pharmaceuticals - VRTX - close: 55.05 change: -0.00

Stop Loss: 49.90
Target(s): 51.85, 58.50
Current Option Gain/Loss: +116.0%
Time Frame: about 2, maybe 3 weeks
New Positions: see below

Comments:
05/02 update: I am giving up early on our VRTX trade. The plan was to exit tomorrow (Tuesday) at the closing bell to avoid holding over earnings. Yet after the action these past two trading days I am suggesting we exit now. The stock spiked to another relative high over $56 this morning and then faded to close unchanged on the session.

I would rather exit now than wait until tomorrow afternoon.

- Very Small Bullish Positions -

May $50.00 calls (VRTX1121E50) Entry @ $2.50, Exit $5.40 (+116%)

05/02 Exit early. VRTX @ $55.05, Option @ +116%
04/30 Consider an early exit now to lock in a gain.
04/27 New stop loss @ 49.90
04/26 1st Target Hit @ 51.85, Option @ $3.40 (+36%)

chart:

Entry on April 10th at $48.28
Earnings Date 05/03/11 (confirmed)
Average Daily Volume = 2.1 million
Listed on April 9th, 2011