Editor's Note:

Stocks continued to drop this morning but the market rebounded off its midday lows. The NASDAQ rebounded from its 100-dma. Unfortunately, FDS and our QQQ play were stopped out. TSCO has broken down under technical support so I am suggesting an early exit.

-James

Current Portfolio:


CALL Play Updates

Apple Inc. - AAPL - close: 336.14 change: +2.84

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:
05/17 update: We were looking for possible support near $330 in AAPL. It looks like the magic number was $331. Traders bought the dip there twice and AAPL eventually put together an afternoon bounce. The short-term trend is still down. Now the $340 and $345 levels are overhead resistance. I don't see any changes from my prior comments. I'd rather buy calls on a dip near $320 and the 200-dma. In the mean time our breakout trigger at $352.50 is ready should AAPL suddenly surge higher.

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: 60.14 change: +0.55

Stop Loss: 56.75
Target(s): 64.00, 68.50
Current Option Gain/Loss: + 7.8% & + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/17 update: ESRX continues to show strength. The stock managed to close above round-number resistance at the $60.00 level today. This move can be used as a new bullish entry point but I would keep positions sizes small. If the market accelerates lower ESRX may not be able to resist the downturn. 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: 65.74 change: -0.55

Stop Loss: 64.75
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:
05/17 update: FAST is sinking closer toward support near $65 and its 40 and 50-dma. I am suggesting we move our stop loss higher to $64.75. 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 -

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

05/17 New stop loss @ 64.75
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


International Business Machines - IBM - close: 170.50 change: +1.64

Stop Loss: 165.90
Target(s): 174.75, 179.50
Current Option Gain/Loss: + 42.3%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
05/17 update: Traders bought the dip in IBM near its 40-dma. The stock produced a bullish engulfing candlestick. Volume was above average on the bounce. This can be used as a new bullish entry point.

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: 72.66 change: -2.22

Stop Loss: 69.90
Target(s): 79.50, 84.00
Current Option Gain/Loss: -49.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/17 update: As expected ILMN has pulled back into the $73-72 zone. We can use this dip as an entry point or if you're feeling cautious just wait for a bounce. More conservative traders could wait for a dip near $71 instead.

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: 55.29 change: +0.49

Stop Loss: 51.75
Target(s): 59.50
Current Option Gain/Loss: +22.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/17 update: JOSB managed a bounce at the $54.00 level. The stock looks ready to hit new highs soon. Traders could use this bounce as an entry point and just tighten your stop loss closer to the $53 level instead.

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: 52.28 change: -0.82

Stop Loss: 50.75
Target(s): 58.00
Current Option Gain/Loss: -33.6%
Time Frame: about 3 weeks
New Positions: see below

Comments:
05/17 update: NTAP's close under its 100-dma is short-term bearish and the MACD on the daily chart has turned bearish. At this point I'd wait for a bounce before considering new positions. The 200-dma near $51.00 should offer additional support. 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: 59.51 change: -0.75

Stop Loss: 57.75
Target(s): 62.75, 67.25
Current Option Gain/Loss: -80.9% & -33.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/17 update: ORLY is down three days in a row. Shares are nearing what should be support at $59.00. I will point out that ORLY has now broken the four-week bullish trend of higher lows. A normal 38.2% retracement of its late April-May run up would mean a dip to $58.75. I'd wait to see where ORLY finds support before initiating new positions.

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


Sherwin-Williams Company - SHW - close: 85.60 change: -0.29

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:
05/17 update: SHW continues to churn sideways under resistance. 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: 53.63 change: +0.01

Stop Loss: 52.75
Target(s): 59.00
Current Option Gain/Loss: -51.2% and -35.5%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/17 update: The SSO traded under its 50-dma intraday but closed virtually unchanged on the session. We narrowly escaped getting stopped out. The low was $52.76. Traders may want to buy calls on this intraday bounce.

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


Union Pacific - UNP - close: 99.79 change: -1.21

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -48.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/17 update: UNP underperformed the transports and the rails today. Shares came within two cents of hitting our stop loss before paring its losses. The close under $100.00 is also short-term bearish. Readers will want to strongly consider an early exit right now to limit any losses. I am not suggesting new positions at this time.

- 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: 87.82 change: -1.06

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:
05/17 update: UTX is starting to correct. Shares hit their 30-dma before trying to bounce. I am removing the breakout trigger. We'll focus on our buy-the-dip trigger at $86.50.

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

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


Volatility Index - VIX - close: 17.55 change: -0.69

Stop Loss: 15.45
Target(s): 24.00
Current Option Gain/Loss: -14.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/17 update: The VIX saw a spike toward 19.00 near its early May highs before reversing lower. If the market bounces from today's lows then the VIX could see a plunge back toward 15.00, which would stop us out. This is a pivotal spot for some of the market averages testing support. A breakdown should send the VIX soaring while a bounce in stocks will see the VIX contract. I don't see any changes from my prior comments. This is an aggressive, higher-risk trade since the stock market's longer-term trend is still higher. I would only trade very small positions. NOTE: VIX June options expire on June 15th.

Small Bullish

Long the June 20.00 call (VIX1115F20) Entry @ $1.75

Entry on May 17th at $18.54
Earnings Date --/--/--
Average Daily Volume = xxx
Listed on May 16th, 2011


Wynn Resorts Ltd. - WYNN - close: 142.85 change: +2.31

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:
05/17 update: WYNN is seeing an oversold bounce near the $140 level. I wouldn't buy it here. You could but I'd use a tight stop near $140.00. We'll wait for a breakout past its highs.

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: 89.44 change: -0.51

Stop Loss: 96.15
Target(s): 85.25
Current Option Gain/Loss: +21.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/17 update: PXD dipped toward its early May lows and bounced. There is a good chance PXD will bounce back toward its 10-dma before rolling over again. Wait for the new lower high to launch positions.

Earlier Comments:
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 bearish 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

FactSet Research Systems - FDS - close: 106.73 change: -0.79

Stop Loss: 105.85
Target(s): 114.75, 119.50
Current Option Gain/Loss: -78.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/17 update: The profit taking in FD continued for a third day in a row. The stock hit $105.56 intraday. That was enough to close our play with a stop loss at $105.85.

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

June $115 call (FDS1118F115) Entry @ $2.05, Exit 0.45 (-78.0%)

05/17 Stopped out @ 105.85, Option @ -78.0%
05/16 New stop loss @ 105.85, More conservative traders may want to exit early now!

chart:

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


Powershares QQQ ETF - QQQ - close: 57.56 change: +0.16

Stop Loss: 56.99
Target(s): 64.00
Current Option Gain/Loss: -79.6% & -60.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/17 update: The QQQ fell to its rising 100-dma near $57.01. Then midday there was a brief trade to $56.98. That was just enough to hit our stop loss (56.99) and close this trade before the QQQs bounced.

- Suggested Positions -

June $60 calls (QQQ1118F60) Entry @ 0.59, Exit 0.12 (-79.6%)

- or -

July $60 calls (QQQ1116G60) Entry @ 1.00, Exit 0.40 (-60%)

05/17 Stopped out @ 56.99, Options @ -79.6% & -60%
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


Tractor Supply Co. - TSCO - close: 58.78 change: -1.63

Stop Loss: 56.99
Target(s): 69.00
Current Option Gain/Loss: -70.0% & -45.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/17 update: Warning! We need to exit our TSCO play immediately. Shares just closed underneath their simple 50-dma for the first time in several months. I couldn't find any specific news to account for today's relative weakness (-2.6%). Aggressive traders could let it ride with a stop under the May low near $57.00. I am suggesting an exit now.

- Suggested Positions -

June $65 call (TSCO1118F65) Entry @ $1.00, Exit 0.30 (-70%)

- or -

July $65 call (TSCO1116G65) Entry @ $1.20, Exit 0.65 (-45.8%)

05/17 Exit Early. Options @ -70% & -45.8%

chart:

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