Editor's Note:

A rebound in commodities and some positive earnings fueled widespread gains on Wednesday. A number of our candidates appear to be offering a new bullish entry point.

-James

Current Portfolio:


CALL Play Updates

Apple Inc. - AAPL - close: 339.87 change: +3.73

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:
05/18 update: AAPL continues to bounce. After trading near $331 on Tuesday shares have bounced back toward new resistance at the $340 level. 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


Boeing Co - BA - close: 77.14 change: +0.46

Stop Loss: 73.60
Target(s): 79.75, 84.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Comments:
05/18 update: The market's bounce helped lift BA to a +0.59% gain. Shares should have new overhead resistance at broken support near $78.00. Currently our plan is to launch bullish positions on a dip at $75.00. If triggered our targets are $79.75 and $84.50. The Point & Figure chart for BA is bullish with an $87 target.

Trigger @ $75.00

- Suggested Positions -

Buy the June $80 call (BA1118F80) current ask $0.80

Entry on May xxth at $ xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on May 17th, 2011


Express Scripts - ESRX - close: 60.14 change: +0.00

Stop Loss: 56.75
Target(s): 64.00, 68.50
Current Option Gain/Loss: + 3.2% & + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/18 update: It's a little bit disappointing to see ESRX close unchanged on the day. The market saw a widespread bounce and healthcare stocks were outperformers with the HMO index up +2.3%. The trend for ESRX is still higher and I would consider new positions here but you might want to use a tighter stop loss. 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: 66.34 change: +0.60

Stop Loss: 64.75
Target(s): 69.50, 74.00
Current Option Gain/Loss: -46.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/18 update: FAST produced a +0.9% bounce but volume was light. The stock is due to split on Monday. I am suggesting we exit this position on Friday at the closing bell. 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

05/18 Plan on exiting Friday at the close.
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: 170.44 change: -0.06

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:
05/18 update: The trading in IBM today was a mystery. The market produced a widespread bounce but IBM did not participate. I remain bullish on the stock and would consider 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

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: 73.47 change: +0.81

Stop Loss: 69.90
Target(s): 79.50, 84.00
Current Option Gain/Loss: -45.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/18 update: ILMN spiked down to $71.80 this morning before bouncing. I would use this bounce as a new entry point to buy calls.

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: 56.69 change: +1.40

Stop Loss: 52.90
Target(s): 59.50
Current Option Gain/Loss: +82.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/18 update: A strong earnings report from ANF helped fuel gains in JOSB. Shares of JOSB have broken out to new all-time highs. I am raising our stop loss to $52.90. More conservative traders might want their stop closer to the $54.00 level.

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

05/18 new stop loss @ 52.90
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: 53.61 change: +1.33

Stop Loss: 51.75
Target(s): 58.00
Current Option Gain/Loss: -14.7%
Time Frame: about 3 weeks
New Positions: see below

Comments:
05/18 update: NTAP bounced from $52 to $54 putting the stock back above its 10 and 100-dma. Readers can use this bounce as a new entry point. I am raising our stop loss up to $51.75. 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

05/18 New stop loss @ 51.75

Entry on May 9th at $53.33
Earnings Date 05/25/11 (confirmed)
Average Daily Volume = 5.8 million
Listed on May 7th, 2011


O'Reilly Automotive - ORLY - close: 60.19 change: +0.68

Stop Loss: 57.75
Target(s): 62.75, 67.25
Current Option Gain/Loss: -61.9% & -15.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/18 update: ORLY rallied off its morning lows to close back above the $60.00 mark. I'm still not suggesting new positions at this time.

Please note that I am suggesting we exit our May calls tomorrow (Thursday) at the closing bell.

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

05/18 Prepare to exit May calls tomorrow
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: 86.04 change: +0.81

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:
05/18 update: SHW rallied off its morning lows near $86.00. Volume was light on the bounce, which is not very encouraging. SHW does look poised to rally higher. 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: 54.55 change: +0.92

Stop Loss: 52.75
Target(s): 59.00
Current Option Gain/Loss: -38.7% and -24.5%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/18 update: The market's bounce helped fuel a +1.7% gain in the SSO. This ETF is in the process of breaking out past its short-term trend of lower highs. I would be tempted to buy calls on this bounce today.

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: 102.03 change: +2.24

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -21.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/18 update: The market's widespread bounce and a rally in the transports has revived our UNP trade. Shares rallied off a test of its 40-dma near $99 this morning. The stock closed back above the $100 mark and its 10-dma. I would consider new bullish positions on this rebound.

- 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: 87.15 change: -0.19

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:
05/18 update: Hmm... should we be alarmed that UTX failed to participate in the market's widespread bounce on Wednesday? Shares gapped open lower and closed down -0.25. Volume was heavy on the session. Currently we have a trigger to buy calls on a dip at $86.50. That could get hit tomorrow if UTX continues to slip. More conservative traders could wait for a dip near $85 and its 50-dma instead. 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: 16.23 change: -1.32

Stop Loss: 15.45
Target(s): 24.00
Current Option Gain/Loss: -31.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/18 update: Our very speculative bet on the VIX could get stopped out tomorrow. I warned readers that yesterday was a pivotal spot for the market. Instead of a breakdown through support the market is bouncing. This is sending the VIX lower. If the market bounces higher tomorrow we'll exit Thursday at the closing bell, that's assuming we don't get stopped out first.

Earlier 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: 146.86 change: +4.01

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:
05/18 update: WYNN is seeing a nice bounce (+2.8%) and is trading back into the middle of its $140-151 range. Our plan is to buy calls on a breakout higher.

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: 91.83 change: +2.39

Stop Loss: 96.15
Target(s): 85.25
Current Option Gain/Loss: -16.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/18 update: A big bounce in crude oil fueled gains for the energy stocks. PXD has closed above short-term resistance at its 10-dma. Shares looked ready to challenge resistance near $95 soon. If they breakout past $95 then the recent lows will look like a bullish double bottom. No new positions right now. Let's wait and see if PXD reverses at $95 or breaks out.

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