Editor's Note:

Financial stocks were leading the way higher and the XLF has risen to the top of its three-week trading range. A breakout in the XLF would be another bullish market signal.

We did see three trades opened today (ARG, COF, and GS). I am suggesting caution on WTW, which is showing relative weakness.

Current Portfolio:


CALL Play Updates

Airgas Inc. - ARG - close: 82.49 change: +0.24

Stop Loss: 78.90
Target(s): 87.00
Current Option Gain/Loss: + 5.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/28 update: ARG opened at $82.21 and bounced quickly off its morning lows of $81.81. Shares spent most of the day consolidating sideways before closing up +0.2% at another new record (closing) high.

FYI: The Point & Figure chart for ARG is bullish with a $92 target.

- Suggested Positions -

Long Mar $82.50 call (ARG1217C82.5) Entry $1.00

02/28/12 trade opened @ 82.21
02/27/12 not open yet, buy calls at the open tomorrow
02/24/12 not open yet, try again.

Entry on February 28 at $82.21
Earnings Date 05/07/12 (unconfirmed)
Average Daily Volume = 528 thousand
Listed on February 23, 2012


American Express Co - AXP - close: 53.76 change: -0.42

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:
02/28 update: Our AXP trade is still not open yet. Both AXP and the S&P 500 opened slightly lower. I am adjusting our entry point strategy. We want to go ahead and buy AXP calls at the opening bell tomorrow. More conservative traders might want to consider a stop loss closer to the $52.00 level.

Keep our position size small.

Our multi-week target is $56.50. Keep in mind that AXP doesn't move super fast. FYI: The Point & Figure chart for AXP is bullish with a $75 target.

Buy calls at the open tomorrow.

- Suggested Positions - (Small Positions)

buy the Apr 52.50 call (AXP1221D52.5) current ask $2.46

02/28/12 not open yet. buy calls at the open tomorrow.
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: 83.26 change: +0.62

Stop Loss: 79.25
Target(s): 89.00
Current Option Gain/Loss: -35.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/28 update: BWA continues to drift higher. Shares are trading just under their all-time high set a couple of days ago. A rally past $83.50 could be used as a new entry point.

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: 115.76 change: +0.13

Stop Loss: 112.75
Target(s): 122.50
Current Option Gain/Loss: -38.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/28 update: Today was a non-event for CAT. Shares drifted sideways and underperformed the major indices. The stock remains under resistance at its highs near $116.50. 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: 50.37 change: +0.63

Stop Loss: 47.75
Target(s): 54.75
Current Option Gain/Loss: Mar$50c: +00.0% & Apr$50c: +00.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/28 update: Financials were showing strength again. COF outperformed most of its peers with a +1.2% gain. The stock also broke out past key resistance near $50.00. Our trigger to buy calls was hit at $50.25. I would still consider new positions now at current levels.

Earlier Comments:
We want to keep our position size small to limit our risk. Our multi-week exit target is $54.75.

(small positions)

- Suggested Positions -

Long Mar $50 call (COF1217C50) entry $1.30

- or -

Long Apr $50 call (COF1221D50) entry $2.30

02/28/12 triggered at $50.25

Entry on February 28 at $50.25
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 6.4 million
Listed on February 15, 2012


Coach, Inc. - COH - close: $75.25 change: -0.80

Stop Loss: 73.75
Target(s): 82.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
02/28 update: Hmm... COH's performance today was surprising. Shares underperformed both the major indices and the RLX retail index. The stock gapped open lower and churned sideways near the $75.00 level all day. My prior comments have not changed.

I am suggesting we launch new bullish positions when COH trades at $76.75 or higher. We'll use a stop loss at $73.75. Our target is $82.50 although don't be surprised if shares pause and pull back a bit when they initially test $80.00. You'll notice the chart below has a bull-flag consolidation pattern that COH is just now starting to breakout from. FYI: The Point & Figure chart for COH is bullish with a long-term $109 target.

Trigger @ $76.75

- Suggested Positions -

buy the Mar $75 call (COH1217c75)

- or -

buy the Apr $77.50 call (COH1221D77.5)

Entry on February xx at $ xx.xx
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on February 27, 2012


Eastman Chemical Co. - EMN - close: 54.96 change: +0.83

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:
02/28 update: We have been patiently waiting for EMN to breakout higher and shares were making progress today. The stock added +1.5% and closed just under resistance at the $55.00 level. We have a trigger to open bullish positions at $55.05. 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.

Trigger @ $55.05 (small positions)

- Suggested Positions -

buy the Apr $55 call (EMN1221D55) current ask $2.00

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: 117.11 change: +1.23

Stop Loss: 114.75
Target(s): 125.00
Current Option Gain/Loss: -20.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/28 update: Murphy's Law is a terrible trading partner. We could see it's effects tomorrow. The financial sector was showing strength today and GS broke out past resistance near $118.00 midday. Shares hit $118.66 before paring its gains to +1.0%, which outperformed many of its peers. Our trigger to buy calls was hit at $118.25.

Unfortunately after the closing bell it was disclosed that GS had received a "Wells Notice" from the SEC. The Securities and Exchange Commission said they might choose to file a civil lawsuit against GS relating to $1.3 billion in subprime mortgage securities written in 2006. Wells Fargo (WFC) has also received a "Wells Notice" at the same time. It is possible that shares of GS could spike lower tomorrow morning as traders react to this news, which would make the timing of our entry point very unfortunate. Although at the moment GS isn't showing that much after hours weakness.

I am not suggesting new bullish positions at this time. We will leave our stop loss at $114.75 for now.

Earlier Comments:
GS can be a volatile stock at times so we want to keep our position size small.

(small positions) - Suggested Positions -

Long Mar $120 call (GS1217C120) Entry $2.10

02/28/12 GS disclosed it has received a Wells Notice from the SEC
02/28/12 triggered at $118.25

Entry on February 28 at $118.25
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:
02/28 update: I am about ready to give up on MMM. The Dow Jones Industrial Average, which MMM is a component, just broke out past the 13,000 level. The S&P 500 is hitting new relative highs too. Yet MMM refuses to breakout from this trading range. I don't know what investors are waiting for. We'll give MMM a couple of more days or we'll drop it. If our trade does open we want to keep our position size small! 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 (small positions)

- 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: +0.00

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:
02/28 update: PH failed to follow the major indices higher. The stock closed unchanged on the session. 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: 80.86 change: -0.44

Stop Loss: 79.90
Target(s): 89.50
Current Option Gain/Loss: -77.4%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/28 update: Today looked a lot like yesterday for ROK with the late morning bounce failing and shares fading lower. The stock underperformed again today. Readers may want to consider an early exit. I'm still betting that the $80.00 level will hold as support with our stop loss at $79.90. I am not suggesting new positions at this time.

- 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: 102.37 change: -0.96

Stop Loss: 99.40
Target(s): 104.75
Current Option Gain/Loss: +42.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
02/28 update: After surging to new record highs yesterday, SHW hit some profit taking today (-0.9%). I am raising our stop loss to $99.40. 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

02/28/12 new stop loss @ 99.40
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: 100.19 change: -0.27

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:
02/28 update: Our VMW trade is not open yet. Both the stock and the S&P 500 opened lower. I am suggesting we try again. Buy calls if both VMW and the S&P 500 index open higher tomorrow morning. More aggressive traders may want to disregard these conditions and just buy calls at the open.

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)

02/28/12 not open yet. try again.
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: 77.88 change: -1.60

Stop Loss: 77.45
Target(s): 86.50
Current Option Gain/Loss: -85.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/28 update: I could not find any news to account for the relative weakness in WTW today. Shares opened higher this morning but reversed at $80.36 and then plunged to a -2.0% decline. The close under $78.00 is bearish and WTW could easily hit our stop loss at $77.45 tomorrow. I am not suggesting new positions at this time.

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: 39.25 change: -0.24

Stop Loss: 36.90
Target(s): 43.00
Current Option Gain/Loss:(Feb37c: -48.1%) & Mar36c: +20.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/28 update: Crude oil continued to see profit taking today and that fueled some weakness in the energy sector. The XES lost -0.6% but bounced at the $39.00 level intraday. 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: 60.45 change: -0.72

Stop Loss: 57.85
Target(s): 63.00
Current Option Gain/Loss: Mar$60c: + 4.1% & Jun$60c: + 6.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/28 update: The weakness in oil also fueled profit taking in the XOP. We previously cautioned readers to expect a dip toward $60 and its 10-dma, which happened today. 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.