Editor's Note:

The tone of trading may have changed. Stocks are ignoring good news with positive GDP data out of Europe and better than expected consumer sentiment numbers here in the U.S.

I am suggesting we exit our GOOG trade early. We also want to exit our May calls in the JOSB play.

Don't forget that May options expire after May 20th. If you're holding May options you've only got a few days left. Given the market's weakness on Friday readers will want to seriously consider exiting early any bullish positions if you're holding May calls. A market decline now will have a large negative impact on May options.

-James

Current Portfolio:


CALL Play Updates

Apple Inc. - AAPL - close: 340.50 change: -6.07

Stop Loss: 339.40
Target(s): 374.00, 395.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/14 update: Uh-oh! Trading in AAPL has taken a turn for the worse. After more than two weeks of bouncing from support near $345 the stock has broken down under a cloud of moving averages. Shares are now trading underneath their 10, 20, 30, 40, 50 and 100-dma. The $340.00 level might offer some support but for the moment the short-term trend is down.

Currently our trigger to buy calls is at $352.50. That may not happen any time soon so we might want to watch for potential support near $330 as a possible entry point instead.

Buy-the-breakout Trigger @ $352.50

- Suggested Positions -

Buy the June $370 calls (AAPL1118F370)

- or -

Buy the July $380 calls (AAPL1116G380)

chart:

Entry on May xxth at $ xx.xx
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume = 16.6 million
Listed on May 2nd, 2011


Alexion Pharma. - ALXN - close: 99.53 change: -1.34

Stop Loss: 95.75
Target(s): 104.85, 109.00
Current Option Gain/Loss: -34.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/14 update: ALXN tried to rally this morning but the stock failed at the $102 level. The close under $100.00 is short-term bearish but ALXN should have some short-term support in the $98-96 area. Given the stock market's weakness on Friday I would wait for a new bounce from ALXN before considering new bullish positions.

The $105 level is overhead resistance so we'll set our first target at $104.85. Our second, more aggressive target is $109.00. However, we may choose to exit prior to the 2-for-1 split.

FYI: ALXN has a 2-for-1 split payable on May 20th. Shares will begin trading post split on May 21st.

- Suggested Positions -

Long the June $105 call (ALXN1118F105) Entry @ $2.35

chart:

Entry on May 13th at $101.00
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 832 thousand
Listed on May 12th, 2011


Amazon.com - AMZN - close: 202.56 change: -3.51

Stop Loss: 198.00
Target(s): 213.50, 219.75
Current Option Gain/Loss: -33.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/14 update: Our new AMZN trade may not last very long. Shares opened at $205.70, briefly traded to a new high, and then reversed. Profit taking produced a -1.7% decline. AMZN should have some short-term support at its 10-dma and at the $200.00 level but if the stock market accelerates lower I do not believe these levels will hold. I would wait for a new bounce in the $201-200 area before considering new bullish positions.

Prior Comments:
I consider this an aggressive, higher-risk trade because AMZN can be a volatile stock at times. We'll try and limit our risk with small positions and a stop loss under $200. Our upside targets are $213.50 (thanks, Jeff!) and $219.75. FYI: The Point & Figure chart for AMZN is bullish with a $242 target.

- Suggested (SMALL) Positions -

Long the June $215 call (AMZN1118F215) Entry @ $3.65

chart:

Entry on May 13th at $205.70
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 6.4 million
Listed on May 12th, 2011


Express Scripts - ESRX - close: 59.92 change: +0.13

Stop Loss: 56.75
Target(s): 64.00, 68.50
Current Option Gain/Loss: +10.4% & + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/14 update: ESRX ended the week on a high note but was unable to breakout past resistance at the $60.00 level. If the stock market continues lower we should expect ESRX to dip towards short-term support near $58.50 or the $57.00 levels. I am not suggesting new positions at this time. We'll wait and see if ESRX produces a dip next week. Our targets are $64.00 and $68.50. FYI: The Point & Figure chart for ESRX is bullish with a $72 target.

- Suggested Positions -

Long the June $60 call (ESRX1118F60) Entry @ $1.53

- or -

Long the August $60 call (ESRX1120H60) Entry @ 3.15

chart:

Entry on May 10th at $59.21
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on May 9th, 2011


Fastenal Co. - FAST - close: 66.61 change: -0.43

Stop Loss: 63.75
Target(s): 69.50, 74.00
Current Option Gain/Loss: -20.4% & -40.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/14 update: Unfortunately FAST has not been very fast. The stock has gone nowhere for two weeks with this consolidation under resistance near $67.50. The simple 50-dma has risen to $64.57 so I am raising our stop loss to $64.49. I am not suggesting new positions at this time.

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

chart:

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


FactSet Research Systems - FDS - close: 109.50 change: -1.79

Stop Loss: 106.40
Target(s): 114.75, 119.50
Current Option Gain/Loss: -46.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/14 update: Our new trade in FDS has been opened. Profit taking on Friday produced a -1.6% decline and a close under what should have been support near $110. The next level of potential support looks like the $108 level. We had a trigger to buy calls on a dip at $110.25. Given the stock market's recent weakness I would look for buy calls on a dip near $108.25 now. Our targets are $114.75 and $119.50.

Please note that this is a higher-risk, more aggressive trade because FDS doesn't have a lot of option volume and the option spreads are a little too wide. Keep your position small to limit our risk.

(small positions only!) Suggested Positions

Long the June $115 call (FDS1118F115) Entry @ $2.05

chart:

Entry on May 13th at $110.25
Earnings Date 06/15/11 (unconfirmed)
Average Daily Volume = 211 thousand
Listed on May 10th, 2011


International Business Machines - IBM - close: 169.92 change: -2.32

Stop Loss: 165.90
Target(s): 174.75, 179.50
Current Option Gain/Loss: + 30.7%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
05/14 update: Ouch! After showing relative strength on Thursday IBM gave back almost all of its gains. Shares spent a good portion of Friday just hovering near the $170 level. The larger trend for IBM is up but given the market's weakness on Friday I am reluctant to launch new positions here.

Our first target is $174.75. Our second and final target remains $179.50. FYI: The Point & Figure chart for IBM is bullish with a $208 target.

- Suggested Positions -

Long the June $170 calls (IBM1118F170) Entry @ $2.60

05/12 Adjusted first target to $174.75
05/10 New stop loss @ 165.90

chart:

Entry on May 5th at $167.50
Earnings Date 04/19/11
Average Daily Volume = 4.8 million
Listed on April 27th, 2011


Illumina Inc. - ILMN - close: 76.26 change: +1.03

Stop Loss: 69.90
Target(s): 79.50, 84.00
Current Option Gain/Loss: +20.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/14 update: ILMN displayed relative strength on Friday and hit a new all-time high as we expected. Shares do look a little bit overbought here. With the major market indices looking vulnerable we may want to wait on initiating new positions. ILMN should have some support in the $74.00-72.00 area.

Our targets are $79.50 and $84.00. The Point & Figure chart for ILMN is bullish with a $90 target.

FYI: The most recent data listed short interest in ILMN at 22% of the 121 million-share float.

- Suggested Positions -

Long the June $75 call (ILMN1118F75) Entry @ $2.75

chart:

Entry on May 11th at $74.50
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on May 10th, 2011


Jos. A Bank Clothiers - JOSB - close: 55.12 change: -0.39

Stop Loss: 51.75
Target(s): 59.50
Current Option Gain/Loss: + 28.5% and +40.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/14 update: It's time to take profits on our May options. JOSB looks pretty bullish here but I suspect the stock is ready for a pause. We want to go ahead and lock in a gain and exit the May calls. Look for a dip into the $54-53 zone. Readers can use dips near $53.00 as a new entry point.

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

- Suggested Positions -

May $55 calls (JOSB1121E55) entry @ $0.70, exit @ 0.90 (+28.5%)

- or -

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

05/14 Exit the May calls. May $55 call @ 0.90 (+28.5%)
05/12 New stop loss at $51.75

chart:

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


NetApp, Inc. - NTAP - close: 53.99 change: +0.00

Stop Loss: 50.75
Target(s): 58.00
Current Option Gain/Loss: - 1.0%
Time Frame: about 3 weeks
New Positions: see below

Comments:
05/14 update: Shares of NTAP were upgraded this morning but the news had little impact on the stock. Shares opened higher but quickly retreated and spent the whole day consolidating sideways near $54.00. This is the third day in a row NTAP has been hovering near $54. If you are looking for a new entry point I would wait for a dip near $53.00 and its 100-dma. Our target to exit is the $58.00 mark.

NOTE: We do not want to hold over the late May earnings report. The date is still unconfirmed. This gives is about two or three weeks as our time frame.

- Suggested Positions -

Long the June $55 calls (NTAP1118F55) Entry @ $1.90

chart:

Entry on May 9th at $ xx.xx
Earnings Date 05/25/11 (unconfirmed)
Average Daily Volume = 5.8 million
Listed on May 7th, 2011


O'Reilly Automotive - ORLY - close: 60.90 change: -0.27

Stop Loss: 57.75
Target(s): 62.75, 67.25
Current Option Gain/Loss: + 4.7% & +18.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/14 update: ORLY has been inching higher this past week. Yet in spite of the trend I am reluctant to chase it here. There is a very good chance that ORLY will retest the $60 level or the $59.00 level soon, especially if the market continues to sink. Readers may want to exit their May $60 calls immediately. The plan was to keep our position size small to limit our risk.

- Suggested (Small) Positions -

Long the May $60 calls (ORLY1121E60) Entry @ $1.05

- or -

Long the June $60 calls (ORLY1118F60) Entry @ $1.65

05/14 Consider exiting the May calls now!

chart:

Entry on May 4th at $60.15
Earnings Date 04/27/11
Average Daily Volume = 1.1 million
Listed on April 30th, 2011


Powershares QQQ ETF - QQQ - close: 58.41 change: -0.70

Stop Loss: 56.99
Target(s): 64.00
Current Option Gain/Loss: -33.8% & -25.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/14 update: After two weeks of consolidating sideways the short-term technical indicators for the NASDAQ-100 index and the QQQ have turned bearish. There is a growing chance that the QQQs will see a pull back toward their 50-dma near $57.00. I am not suggesting new positions at this time. Our upside target is $64.00. The Qs don't move very fast so we'll have to be patient.

- Suggested Positions -

Long the June $60 calls (QQQ1118F60) Entry @ 0.59

- or -

Long the July $60 calls (QQQ1116G60) Entry @ 1.00

05/12 New stop loss at $56.99

chart:

Entry on May 4th at $58.15
Earnings Date --/--/--
Average Daily Volume = 50 million
Listed on April 30th, 2011


ProShares Ultra(long) S&P 500 - SSO - close: 54.32 change: -0.86

Stop Loss: 52.75
Target(s): 59.00
Current Option Gain/Loss: -28.7% and -21.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/14 update: The S&P 500 and the SSO have not broken down yet but they certainly look vulnerable. Upward momentum has stalled and short-term technical oscillators are turning bearish. More conservative traders may want to lighten up on their positions and/or raise their stop loss. I am not suggesting new positions at this time.

The SSO is twice as volatile as the market so we want to keep our position size small. Our multi-week target is the $59.00 level.

Small Positions Only - Suggested Positions -

Long the June $56 call (SSO1118F56) Entry @ $1.60

- or -

Long the September $60 call (SSO1117I60) Entry @ $2.00

chart:

Entry on May 5th at $54.39
Earnings Date --/--/--
Average Daily Volume = 11.3 million
Listed on May 4th, 2011


Tractor Supply Co. - TSCO - close: 61.89 change: -1.02

Stop Loss: 56.99
Target(s): 69.00
Current Option Gain/Loss: + 0.0% & +25.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/14 update: TSCO gave up -1.6% on Friday. Overall nothing has changed. I'm still bullish on TSCO but we will want to wait for dips near $60.00 again before launching new positions.

There is resistance at $65.00 but I'm setting our profit target at $69.00. More conservative traders may want to take profits at $64.80 and then sell the rest at $69.00.

- Suggested Positions -

Long the June $65 call (TSCO1118F65) Entry @ $1.00

- or -

Long the July $65 call (TSCO1116G65) Entry @ $1.20

chart:

Entry on May 11th at $61.62
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 958 thousand
Listed on May 10th, 2011


Union Pacific - UNP - close: 100.46 change: -1.97

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -34.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/14 update: Railroad stocks were hit hard on Friday. UNP lost -1.9%. Shares are now testing round-number support at the $100 level. This should be a new bullish entry point. Unfortunately most of the technical indicators on the daily chart have turned bearish. Readers will want to wait for a bounce from current levels before considering new positions. Our targets are $109.00 and $114.00. FYI: The Point & Figure chart for UNP is bullish with a $116 target.

- Suggested Positions -

Long the June $105 call (UNP1118F105) Entry @ $1.62

chart:

Entry on May 9th at $102.19
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on May 7th, 2011


United Technologies Corp. - UTX - close: 88.98 change: -0.59

Stop Loss: 83.49
Target(s): 89.50, 94.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/14 update: Surprise, surprise, nothing has changed with UTX. In spite of a little volatility on Friday morning the stock is still consolidating sideways inside the $88-90 zone. There is no change from my prior comments.

We have two different triggers to open positions here. One is a buy-the-dip entry point at $86.50 with a stop loss at $84.75. Another one is a breakout entry point at $90.75 but with very small positions and a stop loss at $87.75.

If UTX hits $86.50 first then our targets are $89.50 and $94.75. If UTX hits $90.75 first then our targets are $94.75 and $98.50.

Buy-the-dip Trigger @ $86.50
-OR-
breakout @ $90.75 and use small positions to limit our risk!

- Suggested Positions -

Buy the June $90 calls (UTX1118F90)

chart:

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


Wynn Resorts Ltd. - WYNN - close: 146.27 change: -0.56

Stop Loss: 146.40
Target(s): 159.75, 169.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Comments:
05/14 update: The last couple of days have been quiet ones for WYNN. The stock is churning inside the $145-150 zone. I don't see any changes from my prior comments. If WYNN can breakout to a new multiyear high it could spark some short covering and a run at its all-time highs.

This stock can be somewhat volatile so I am suggesting we keep our position sizes small to limit our risk. We'll use a trigger to buy calls at $152.00. If triggered at $152.00 our targets are $159.75 and $169.00. The $160 and $170 levels look like potential resistance.

Trigger @ $152.00

- Suggested Positions -

Buy the June $160 calls (WYNN1118F160) current ask $2.15

chart:

Entry on May xxth at $ xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on May 11th, 2011


CLOSED BULLISH PLAYS

Google Inc. - GOOG - close: 529.55 change: -5.50

Stop Loss: 529.00
Target(s): 549.00, 558.00
Current Option Gain/Loss: -90.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
05/14 update: I'm throwing in the towel for this GOOG trade. What was supposed to be a quick bounce higher stalled at resistance. GOOG spent two weeks going sideways. Now shares are flirting with a breakdown under the $530 level. The low today almost hit our stop loss. I am suggesting an early exit now before these out of the money May options vanish altogether. Of course most of the damage has been done. More aggressive traders could let it ride. At this point odds are these options will expire worthless.

Prior Comments:
Keep positions small. This is a very aggressive, higher-risk trade. May options expire after the 20th.

(Very Small Positions) Suggested Positions:

May $550 call (GOOG1121E550) Entry @ $3.00, Exit @ 0.30 (-90%)

05/14 Exit early. GOOG @ 529.55. Option @ -90%
05/09 New stop loss @ 529.00
04/30 Adjusted exit strategy. First target at $549.00. Final target at $558.00.

chart:

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