Editor's Note:

High-flying NASDAQ tech stocks were big underperformers today. We saw ALXN and AMZN both hit our stop losses.

-James

Current Portfolio:


CALL Play Updates

Apple Inc. - AAPL - close: 333.30 change: -7.20

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:
05/16 update: Ouch! AAPL lost -2.1% on Monday putting its two-day decline at more than $13. The breakdown under the $340 level is bearish. The stock could have support near $330 but there is a chance AAPL might fall toward stronger support near $320 and its 200-dma. I would definitely consider buying calls on a dip near $320 and if AAPL can find support at $330 again we'll consider buying calls there too. In the meantime, we're in a wait-and-see mode. Our breakout trigger to buy calls at $352.50 won't get hit any time soon.

Buy-the-breakout Trigger @ $352.50

- Suggested Positions -

Buy the June $370 calls (AAPL1118F370)

- or -

Buy the July $380 calls (AAPL1116G380)

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


Express Scripts - ESRX - close: 59.59 change: -0.33

Stop Loss: 56.75
Target(s): 64.00, 68.50
Current Option Gain/Loss: - 7.1% & - 7.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/16 update: Investors favored defensive names on Monday. ESRX recovered from its morning spike lower and almost hit new relative highs before the intraday rebound faded. Given the market's weakness we should look for a dip toward the $58.00 or $57.00 levels. No new positions at this time. 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

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: 66.29 change: -0.32

Stop Loss: 63.75
Target(s): 69.50, 74.00
Current Option Gain/Loss: -36.3% & -40.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/16 update: FAST held up reasonably well considering the NASDAQ sell-off today. Shares may not hold up if the NASDAQ continues to sink. I am suggesting we exit our May calls immediately. I am not suggesting new positions at this time.

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 -

May $65.00 calls (FAST1121E65) Entry @ $2.20, Exit 1.40 (-36.3%)

- or -

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

05/16 Exit May $65 calls ASAP. Bid @ 1.40 (-36.3%)

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: 107.52 change: -1.98

Stop Loss: 105.85
Target(s): 114.75, 119.50
Current Option Gain/Loss: -75.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/16 update: Warning! FDS underperformed the market's major indices on Monday with a -1.8% decline. More conservative traders may want to exit early right now. Shares have closed under the 10-dma and the $108 level. The next stop looks like the $106 area. I am adjusting our stop loss to $105.85. I am not suggesting new bullish positions at this time.

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

05/16 New stop loss @ 105.85, More conservative traders may want to exit early now!

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: 168.86 change: -1.06

Stop Loss: 165.90
Target(s): 174.75, 179.50
Current Option Gain/Loss: + 6.9%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
05/16 update: IBM is slipping toward recent support near $168.00. If this level breaks the stock should find additional support near $166.00. I'm not suggesting new positions at this time. Let's wait and see where the market bounces first.

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

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: 74.88 change: -1.38

Stop Loss: 69.90
Target(s): 79.50, 84.00
Current Option Gain/Loss: - 9.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/16 update: There is no change from my prior comments on ILMN. The trend is up but shares look poised for some profit taking. Watch for support in the $73-72 zone. We'll wait for a dip or a bounce before considering new positions.

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

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: 54.80 change: -0.32

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

Comments:
05/16 update: JOSB gave up -0.5% on Monday. I don't se any changes from my weekend comments. A dip or bounce near the $53.00 area can be used 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 -

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

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: 53.10 change: -0.89

Stop Loss: 50.75
Target(s): 58.00
Current Option Gain/Loss: -23.6%
Time Frame: about 3 weeks
New Positions: see below

Comments:
05/16 update: Selling in tech stocks on Monday pulled NTAP to a -1.6% decline. Shares paused at technical support near the 10 and 100-dma. I've been suggesting readers look for a dip near $53 as a possible entry point. This could be it. Or you can wait for the bounce first. Our target to exit is the $58.00 mark.

NOTE: We do not want to hold over the May 25th earnings report.

- Suggested Positions -

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

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


O'Reilly Automotive - ORLY - close: 60.26 change: -0.64

Stop Loss: 57.75
Target(s): 62.75, 67.25
Current Option Gain/Loss: -42.8% & - 6.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/16 update: ORLY has pulled back toward support near $60 but I'm not expecting this level to hold if the major market indices continue to sink. ORLY appears to have additional support at $59 and $58 so we'll wait and see where it bounces.

I will repeat my comments from this weekend that 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!

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: 57.40 change: -1.01

Stop Loss: 56.99
Target(s): 64.00
Current Option Gain/Loss: -69.4% & -51.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/16 update: We need to be careful here. Over the weekend I discussed that the QQQs looked like they might see a dip toward the 50-dma, which is what occurred today. A bounce from here could be used as a new entry point. Any further declines will probably hit our stop loss at $56.99. 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

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


Sherwin-Williams Company - SHW - close: 85.89 change: -0.31

Stop Loss: 83.95
Target(s): 92.25, 98.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see Trigger

Comments:
05/16 update: Traders bought the early morning dip in SHW. The stock bounced back toward last week's highs. Currently our plan is to launch bullish positions on a breakout at $87.00. If triggered our first target is $92.25. Our second, much more aggressive target is $98.50. I would not be surprised to see some resistance near the $90 and $95 levels. The Point & Figure chart for SHW is bullish with a $99 target. If the stock can rally past $87 it will produce yet another buy signal.

Trigger @ $87.00

- Suggested Positions -

buy the June $90 call (SHW1118F90) current ask $0.65

- or -

buy the Sept. $90 call (SHW1117I90) current ask $2.50

Entry on May xxth at $ xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 14th, 2011


ProShares Ultra(long) S&P 500 - SSO - close: 53.62 change: -0.70

Stop Loss: 52.75
Target(s): 59.00
Current Option Gain/Loss: -46.2% and -30.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/16 update: The SSO has fallen toward its early May lows and looks like it will test the 50-dma near $53.00 soon. Wait for a bounce from the 50-dma before considering new bullish positions.

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

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: 60.41 change: -1.48

Stop Loss: 56.99
Target(s): 69.00
Current Option Gain/Loss: -40.0% & -12.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/16 update: I cautioned readers to look for another dip near $60.00 before initiating new positions. TSCO is getting close to this level. More conservative traders could wait for a dip near the 50-dma instead (currently $59.15).

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

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: 101.00 change: +0.54

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -31.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/16 update: UNP saw a bounce from the $100 level this morning but the rally attempt failed at $102.00. The stock remains in jeopardy of breaking down under the $100 level. More conservative traders might want to wait for a close over $102.00 again 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

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: 88.88 change: -0.10

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:
05/16 update: UTX bounced from its morning lows near support at $88 and its 20-dma. I don't see any changes 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)

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: 140.54 change: -5.73

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:
05/16 update: WYNN has fallen toward the bottom of its recent trading range near support at $140. Odds are WYNN won't hit our breakout trigger to buy calls at $152.00 any time soon. We may want to start looking for some sort of buy the dip entry. The $130 level should offer some support. If WYNN bounces there it could be an entry point. We'll reconsider adjusting our entry strategy later this week.

Prior Comments:
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

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


PUT Play Updates

Pioneer Natural Resources - PXD - close: 89.95 change: -2.20

Stop Loss: 96.15
Target(s): 85.25
Current Option Gain/Loss: + 9.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/16 update: Oil stocks continued to sink and PXD failed at its 10-dma again. Shares lost -2.3%. We want to keep our position size small to limit our risk because oil and oil stocks have been increasingly volatile lately. Our target is $85.25. More aggressive traders could aim for the rising 200-dma instead. FYI: The Point & Figure chart for PXD is bullish with a $72 target.

-Small Bearish-

Long the June $90 PUT (PXD1118R90) Entry @ $3.30

Entry on May 16th at $91.64
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on May 14th, 2011


CLOSED BULLISH PLAYS

Alexion Pharma. - ALXN - close: 96.32 change: -3.21

Stop Loss: 95.75
Target(s): 104.85, 109.00
Current Option Gain/Loss: -82.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/16 update: Monday was a rough day for shares of ALXN with a -3.2% decline. Not only did today's drop breakdown below several key moving averages but the intraday low hit $95.61. Our stop loss was hit at $95.75 .

- Suggested Positions -

June $105 call (ALXN1118F105) Entry @ $2.35, Exit 0.40 (-82.9%)

05/16 Stopped out @ 95.75, Option @ -82.9%

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: 192.51 change: -10.05

Stop Loss: 198.00
Target(s): 213.50, 219.75
Current Option Gain/Loss: -67.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/16 update: AMZN was crushed today. There was a Bloomberg story that Amazon's cloud computing services were involved in Sony's massive security breach. Now add a sell-off across the technology space and AMZN was a big underperformer today, down -4.9%. Shares gapped open lower at $200.54 and quickly hit our stop loss at $198.00. We knew this was an aggressive trade and clearly labeled it a higher-risk play but today's weakness is still surprising.

- Suggested (SMALL) Positions -

June $215 call (AMZN1118F215) Entry @ $3.65, Exit $1.20 (-67.1%)

05/16 Stopped out @ 198.00, Option @ -67.1%

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