Editor's Note:

Traders are still buying dips and the market's major indices bounced off their morning lows.

JLL hit our stop loss. I have adjusted our entry point for ARG.

Current Portfolio:


CALL Play Updates

Airgas Inc. - ARG - close: 82.25 change: +0.40

Stop Loss: 78.90
Target(s): 87.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27 update: ARG produced another gain and set a new record high but our trade is not open yet. Both ARG and the S&P 500 gapped open lower, negating our entry point strategy. I am suggesting we adjust our strategy to buy calls at the open tomorrow.

Over the weekend I suggested that more conservative traders buy a dip near $81 or $80. You got your dip to $81 this morning!

Please note that I am consolidating our targets to just one at $87.00. FYI: The Point & Figure chart for ARG is bullish with a $92 target.

- Suggested Positions -

buy the Mar $82.50 call (ARG1217C82.5)

02/27/12 not open yet, buy calls at the open tomorrow
02/24/12 not open yet, try again.

Entry on February xx at $ xx.xx
Earnings Date 05/07/12 (unconfirmed)
Average Daily Volume = 528 thousand
Listed on February 23, 2012


American Express Co - AXP - close: 54.18 change: +0.85

Stop Loss: 51.25
Target(s): 57.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
02/27 update: AXP outperformed the market on Monday with a +1.5% gain yet our trade is not open yet. Both AXP and the S&P 500 opened lower this morning, which negated our entry point. I am suggesting we try again. We open small bullish positions at the open but only if both AXP and the S&P 500 index open positive.

We'll use a stop loss at $51.25. Our multi-week target is $56.50. Keep in mind that AXP doesn't move super fast. Pick an option that gives you enough time. FYI: The Point & Figure chart for AXP is bullish with a $75 target.

Do not enter position unless AXP and the S&P 500 are both positive at the open

- Suggested Positions - (Small Positions)

buy the Apr 52.50 call (AXP1221D52.5)

02/27/12 not open yet, try again.

Entry on February xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on February 25, 2012


BorgWarner Inc. - BWA - close: 82.64 change: +0.21

Stop Loss: 79.25
Target(s): 89.00
Current Option Gain/Loss: -45.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/27 update: BWA gapped open lower and bounced like most of the market this morning. If both BWA and the S&P 500 open positive tomorrow we can use it as a new bullish entry point on BWA.

Earlier Comments:
A breakout would mean new record highs and could produce a some short covering in BWA. The most recent data listed short interest at 14% of the 108 million share float. FYI: The Point & Figure chart for BWA is bullish with a $108 target.

- Suggested Positions -

Long Mar $85 call (BWA1217C85) Entry $1.55

02/25/12 new stop loss @ 79.25
02/17/12 trade opened on BWA's gap open higher at $82.49

Entry on February 17 at $82.49
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on February 16, 2012


Caterpillar, Inc. - CAT - close: 115.63 change: -0.37

Stop Loss: 112.75
Target(s): 122.50
Current Option Gain/Loss: -29.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/27 update: CAT underperformed the market. Shares bounced off their morning lows but failed at resistance near $116.50 again. Readers may want to wait for a rally past $117.00 before initiating new bullish positions.

The Point & Figure chart for CAT is bullish with a $165 target.

- Suggested Positions -

Long Mar $120 call (CAT1217C120) Entry $1.15

02/25/12 adjusted exit target to $122.50
02/23/12 new stop loss @ 112.75

Entry on February 21 at $115.25
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 7.5 million
Listed on February 14, 2012


Capital One Financial - COF - close: 49.74 change: +0.45

Stop Loss: 47.75
Target(s): 54.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27 update: Financial stocks ended the day showing relative strength. COF rallied toward resistance near $50.00 but couldn't get past it. The stock closed up +0.9%. I am suggesting a trigger to buy calls at $50.25. We want to keep our position size small to limit our risk. Our multi-week exit target is $54.75.

Trigger @ $50.25 (small positions)

- Suggested Positions -

buy the Mar $50 call (COF1217C50)

- or -

buy the Apr $50 call (COF1221D50)

Entry on February xx at $ xx.xx
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 6.4 million
Listed on February 15, 2012


Eastman Chemical Co. - EMN - close: 54.13 change: +0.33

Stop Loss: 53.25
Target(s): 59.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27 update: EMN briefly traded to a new three-week low thanks to the market's widespread weakness this morning. The stock recovered but we're still waiting for a breakout higher. If we see shares of EMN close under $53.50 we will drop it as a bullish candidate.

I am suggesting a trigger to open small bullish positions at $55.05 with a stop loss at $53.25. Our target is $59.00. More conservative traders may want to wait for EMN to trade past its all-time high of $55.36 (set in 2011) before initiating positions. FYI: The Point & Figure chart for EMN is bullish with a long-term $91 target.

NOTE: I am adjusting the suggested call from a March $55 call to an April $55 call.

Trigger @ $55.05 (small positions)

- Suggested Positions -

buy the Apr $55 call (EMN1221D55)

02/27/12 adjusted suggested call from March to April.

Entry on February xx at $ xx.xx
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on February 18, 2012


Goldman Sachs - GS - close: 116.23 change: +0.36

Stop Loss: 114.75
Target(s): 125.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27 update: GS rallied off its morning lows like most of the market. Shares are still trading under resistance near $118.00. We can expect shares to gap down at the open tomorrow as GS begins trading ex-dividend. The current quarterly dividend is about 35 cents.

We have a trigger to buy calls at $118.25. GS can be a volatile stock at times so we want to keep our position size small. If triggered at $118.25 we will aim for $125.00.

Trigger @ $118.25 (small positions)

- Suggested Positions -

buy the Mar $120 call (GS1217C120)

Entry on February xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on February 21, 2012


3M Co. - MMM - close: 88.07 change: -0.13

Stop Loss: 86.75
Target(s): 94.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
02/27 update: MMM spiked down toward its 30-dma this morning before bouncing back to almost close unchanged on the session. The intraday high was $88.32. I am suggesting a trigger to buy calls at $88.75.

Earlier Comments:
The $90 level could be round-number resistance but we're setting our exit target at $94.00. FYI: The Point & Figure chart for MMM is bullish with a $109 target.

Breakout Trigger (buy calls) @ $88.75

- Suggested Positions -

buy the MAR $90 call (MMM1217C90)

- or -

buy the Apr $90 call (MMM1221D90)

02/25/12 adjusted trigger to $88.75 and stop to $86.75
Added the April $90 call
02/09/12 removed the February call.

Entry on February xx at $ xx.xx
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on February 07, 2012


Parker-Hannifin - PH - close: 90.24 change: +0.61

Stop Loss: 88.45
Target(s): 96.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27 update: PH gapped open lower and almost hit last week's lows before bouncing back. The stock outperformed the major indices with a +0.6% gain. I don't see any changes from my prior comments. We want to buy calls if PH hits $91.25 or higher. If triggered our target is $96.50. FYI: The Point & Figure chart for PH is bullish with a $111 target.

Trigger @ 91.25

- Suggested Positions -

buy the Mar $90 call (PH1217C90)

02/25/12 adjusted trigger to buy calls to $91.25

Entry on February xx at $ xx.xx
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on February 22, 2012


Rockwell Automation - ROK - close: 81.30 change: -1.37

Stop Loss: 79.90
Target(s): 89.50
Current Option Gain/Loss: -74.1%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27 update: ROK can't seem to make up its mind. Friday it was outperforming with a bounce. Today the stock is underperforming with a -1.6% drop on no news. The gap down this morning is a reflection of the market's widespread weakness but ROK's intraday bounce reversed. I am not suggesting new positions at this time.

FYI: The Point & Figure chart for ROK is bullish with a $98 target.

- Suggested Positions -

Long Mar $85 call (ROK1217C85) Entry $1.55

Entry on February 21 at $82.75
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on February 18, 2012


Sherwin-Williams - SHW - close: 103.33 change: +2.27

Stop Loss: 98.90
Target(s): 104.75
Current Option Gain/Loss: +80.9%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
02/27 update: SHW displayed some relative strength with a +2.2% gain and a rally to new record highs. Traders bought the dip this morning near $100. More conservative traders may want to go ahead and take profits now. Our exit target is $104.75.

- Suggested Positions -

Long Mar $100 call (SHW1217C100) Entry $2.10

02/27/12 readers may want to take profits now (@ +80.9%)
02/25/12 new stop loss @ 98.90
02/22/12 new stop loss @ 98.25

Entry on February 17 at $100.25
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on February 14, 2012


VMware, Inc. - VMW - close: 100.46 change: -0.06

Stop Loss: 97.25
Target(s): 108.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27 update: The gap down this morning in both VMW and the S&P 500 negated our entry point. VMW did bounce back to close virtually unchanged on the session. I am suggesting we try again.

We want to open small bullish positions at the open tomorrow morning but only if both VMW and the S&P 500 index both open positive. We'll use a stop loss at $97.25, which is just under Thursday's low. Our target is $108.50. FYI: The Point & Figure chart for VMW is bullish with a $117 target.

Do not enter position unless VMW and the S&P 500 are both positive at the open

- Suggested Positions - (Small Positions)

buy the Mar $105 call (VMW1217C105)

- or -

buy the Apr $105 call (VMW1221D105)

02/27/12 not open yet. try again.

Entry on February xx at $ xx.xx
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on February 25, 2012


Weight Waters Intl. - WTW - close: 79.48 change: -0.13

Stop Loss: 77.45
Target(s): 86.50
Current Option Gain/Loss: -32.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/27 update: The market's major indices spiked lower this morning. The good news here is that WTW did not follow the market lower at the open. Unfortunately the bad news is that WTW did not follow the market's bounce higher either. Shares of WTW churned sideways in a very narrow range. I don't see any changes from my prior comments.

I would wait for WTW to trade over $80.75 before considering new bullish positions. More nimble traders could try and buy a dip near the rising 10-dma approaching $78.00 instead.

Earlier Comments:
WTW could see a potential short squeeze. The most recent data listed short interest at 24.6% of the relatively small 35.1 million-share float. The stock has rallied to significant resistance near $80.00. A breakout could spark some short covering. FYI: The Point & Figure chart for WTW is bullish with a $106 target.

- Suggested Positions -

Long Mar $80 call (WTW1217C80) Entry $1.40

02/24/12 WTW gapped open higher at $80.26, which was above our trigger at $80.25.

Entry on February 24 at $80.26
Earnings Date 05/07/12 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on February 23, 2012


S&P Oil ETF - XES - close: 39.49 change: -0.40

Stop Loss: 36.90
Target(s): 43.00
Current Option Gain/Loss:(Feb37c: -48.1%) & Mar36c: +34.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/27 update: Crude oil hit some profit taking as the U.S. dollar bounced. This fueled some profit taking in the energy sector. The XES spiked down toward $39.00 before paring its losses. I am not suggesting new positions at this time.

Earlier Comments:
The option spreads on the XES a bit wide, which makes this a higher-risk trade. I am suggesting we keep our position size small to limit our risk. Our multi-week exit target is $43.00.

(small positions) - Suggested Positions -

Long Mar $36 call (XES1217C36) Entry $2.45

02/18/12 new stop loss @ $36.90
02/14/12 exited Feb. calls at the close: bid @ $0.70 (-48.1%)
02/13/12 prepare to exit our Feb. $37 calls at the closing bell tomorrow.

Entry on February 06 at $37.75
Earnings Date --/--/--
Average Daily Volume = 177 thousand
Listed on February 04, 2012


Oil & Gas Exploration ETF - XOP - close: 61.17 change: -0.17

Stop Loss: 57.85
Target(s): 63.00
Current Option Gain/Loss: Mar$60c: +34.1% & Jun$60c: +17.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/27 update: Profit taking in crude oil sparked some weakness in the energy sector. Yet losses in the XOP were pretty mild. I would still expect a dip toward $60.00 or the 10-dma. I am not suggesting new positions at this time. FYI: The Point & Figure chart for XOP is bullish with a $74 target.

- Suggested Positions -

Long Mar $60 call (XOP1217C60) Entry $1.70

- or -

Long Jun $60 call (XOP1216F60) Entry $4.10

02/23/12 new stop loss @ 57.85

Entry on February 14 at $58.75
Earnings Date --/--/--
Average Daily Volume = 3.8 million
Listed on February 13, 2012


PUT Play Updates

Currently we do not have any active put trades.


CLOSED BULLISH PLAYS

Jones Lang LaSalle - JLL - close: 80.71 change: -0.60

Stop Loss: 79.95
Target(s): 89.50
Current Option Gain/Loss: -75.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/27 update: The stock market's gap down and spike lower on Monday morning was enough to push JLL down to $79.29 before the stock bounced. Our stop loss was hit at $79.95.

- Suggested Positions -

Mar $85 call (JLL1217C85) Entry $2.40 exit $0.60*(-75.0%)

02/27/12 stopped out at $79.95
*exit price is an estimate. The option did not trade at the time JLL hit our stop loss.

chart:

Entry on February 17 at $83.75
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 518 thousand
Listed on February 16, 2012