Editor's Note:

The market's major indices shrugged off yesterday's ominous pullback. The fact that the transportation average did participate in the rally today is positive. Yet the small caps still look vulnerable here.

Our COH and NE trades were opened. PH has been stopped out.

Current Portfolio:


CALL Play Updates

Alexion Pharma. - ALXN - close: 84.54 change: +0.81

Stop Loss: 81.45
Target(s): 89.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
03/01 update: The market did not see any follow through on yesterday's decline. Traders continue to buy the dip and ALXN added +0.9%. We'll adjust our entry point strategy again. Buy calls tomorrow morning but only if both ALXN and the S&P 500 open positive.

We want to keep our position size small to limit our risk.

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

- Suggested (SMALL) Positions -

buy the Apr $85 call (ALXN1221D85)

- or -

buy the Apr $90 call (AXLN1221D90)

03/01/12 adjust entry strategy. buy calls if both ALXN and S&P 500 open positive tomorrow
02/29/12 trade not open yet. Adjust entry to use a buy the dip trigger at $82.50 with a stop loss at $81.45

Entry on February xx at $ xx.xx
Earnings Date 04/23/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on February 28, 2012


Airgas Inc. - ARG - close: 82.31 change: -0.02

Stop Loss: 78.90
Target(s): 87.00
Current Option Gain/Loss: -20.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: Hmm... ARG failed to rally with the market today. Shares merely churned sideways and closed almost unchanged on the session. Readers may want to wait for a rally past $82.75 before considering new positions.

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: 53.57 change: +0.68

Stop Loss: 51.25
Target(s): 57.50
Current Option Gain/Loss: - 6.6%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
03/01 update: AXP was an early leader this morning with a spike off its morning lows. Shares ended the session up +1.2%. If both AXP and the S&P 500 open positive tomorrow readers can use it as a new entry point.

The plan was to 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.

- Suggested Positions - (Small Positions)

Long Apr 52.50 call (AXP1221D52.5) Entry $2.40

02/29/12 AXP gapped down at $53.46
02/28/12 not open yet. buy calls at the open tomorrow.
02/27/12 not open yet, try again.

Entry on February 29 at $53.46
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on February 25, 2012


BorgWarner Inc. - BWA - close: 84.19 change: +1.35

Stop Loss: 79.25
Target(s): 89.00
Current Option Gain/Loss: -19.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/01 update: BWA rallied to new all-time highs and closed above the $84.00 level. More conservative traders may want to start raising their stop loss.

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: 113.39 change: -0.82

Stop Loss: 112.75
Target(s): 122.50
Current Option Gain/Loss: -74.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: Red alert! CAT did not participate in the market's widespread rally today. Shares broke down under $114.00 and dipped to $113.00 this afternoon. If there is any follow through lower tomorrow CAT will likely hit our stop loss at $112.75. I am not suggesting new positions at this time.

- Suggested Positions -

Long Mar $120 call (CAT1217C120) Entry $1.15

02/29/12 CAT produced a bearish engulfing candlestick pattern
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: 50.24 change: -0.36

Stop Loss: 47.75
Target(s): 54.75
Current Option Gain/Loss: Mar$50c: -14.6% & Apr$50c: - 5.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: It was a disappointing session for COF. After outperforming yesterday the stock underperformed today. Shares slipped back toward $50.00, which should be new support. I would use a bounce from current levels as a new bullish entry point.

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: $76.74 change: +1.90

Stop Loss: 73.75
Target(s): 82.50
Current Option Gain/Loss: Mar$75c: - 4.0% & Apr$77.50c: - 4.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/01 update: Retail and consumer discretionary stocks were showing progress today. COH outperformed the market with a +2.5% gain and an intraday breakout to new highs at $76.80. Our trigger to buy calls was hit at $76.75.

Earlier Comments:
Our target is $82.50 although don't be surprised if shares pause and pull back a bit when they initially test $80.00. FYI: The Point & Figure chart for COH is bullish with a long-term $109 target.

- Suggested Positions -

Long Mar $75 call (COH1217c75) entry $2.45

- or -

Long Apr $77.50 call (COH1221D77.5) entry $2.40

03/01/12 COH hit our trigger at $76.75

Entry on March 01 at $76.75
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on February 27, 2012


Eastman Chemical Co. - EMN - close: 53.79 change: -0.34

Stop Loss: 53.25
Target(s): 59.00
Current Option Gain/Loss: -22.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: Warning! After yesterday's bull-trap pattern today's relative weakness is definitely a warning signal. Shares hit a low of $53.44 intraday. Our stop is at $53.25. I am not suggesting new positions at this time.

(small positions) - Suggested Positions -

Long Apr $55 call (EMN1221D55) Entry $1.75

02/29/12 triggered at $55.05
02/27/12 adjusted suggested call from March to April.

Entry on February 29 at $55.05
Earnings Date 04/30/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on February 18, 2012


Goldman Sachs - GS - close: 121.13 change: +5.99

Stop Loss: 114.75
Target(s): 125.00
Current Option Gain/Loss: +76.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: GS made headlines today when it announced plans to buy Ariel Re's insurance and reinsurance business. I doubt this news was behind the relative strength in GS today. The stock shot higher at the open and broke out past resistance near $118.00. What a difference a day can make!

At this point readers may want to wait for a dip near $119 if you're looking for a new entry point. Our exit target is $125.00 but more aggressive traders may want to aim for the $127.50-130.00 zone instead.

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: 87.49 change: -0.11

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:
03/01 update: I am giving up on MMM. The stock refuses to participate in the market's widespread rally. If we don't see MMM close over $88.50 tomorrow I am dropping it as a bullish candidate in the weekend newsletter.

Currently I am suggesting a trigger to buy calls at $88.75. If our trade does open we want to keep our position size small!

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)

03/01/12 about to drop MMM for lack of movement.
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


Noble Corp. - NE - close: 40.90 change: +0.72

Stop Loss: 38.45
Target(s): 44.75
Current Option Gain/Loss: +18.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/01 update: Our new trade on NE is open. Shares of NE opened higher at $40.24 and outperformed the market with a +1.79% gain. I don't see any changes from my prior comments.

Earlier Comments:
Our multi-week target is $44.75. FYI: The Point & Figure chart for NE is bullish with a long-term $61 target.

- Suggested Positions -

Long Apr $40 call (NE1221D40) Entry $1.89

Entry on March 01 at $40.24
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on February 29, 2012


Sherwin-Williams - SHW - close: 103.56 change: +0.41

Stop Loss: 99.40
Target(s): 104.75
Current Option Gain/Loss: +80.9%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
03/01 update: SHW is still drifting higher and added another +0.3%. I am not suggesting new positions at this time. Readers may want to start taking profits now.

- 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


Weight Waters Intl. - WTW - close: 78.85 change: +0.87

Stop Loss: 77.45
Target(s): 86.50
Current Option Gain/Loss: -71.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: WTW is still trying to bounce and managed to outperform the major indices today with a +1.1% gain. I remain cautious on this stock. 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: 39.17 change: +0.54

Stop Loss: 36.90
Target(s): 43.00
Current Option Gain/Loss:(Feb37c: -48.1%) & Mar36c: +18.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/01 update: Crude oil futures continued to bounce and the XES followed the commodity higher. You could argue the recent pullback in the XES almost looks like a bull-flag pattern. 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: 60.35 change: +1.03

Stop Loss: 57.45
Target(s): 63.00
Current Option Gain/Loss: Mar$60c: - 8.8% & Jun$60c: + 3.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/01 update: XOP also enjoyed a bounce thanks to strength in oil and the broader market. While the XOP is back above $60.00 it is not back above its simple 10-dma. Today's session is essentially an inside day (inside yesterday's trading range. 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

02/29/12 adjusting stop loss to $57.45
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

Parker-Hannifin - PH - close: 89.34 change: -0.47

Stop Loss: 88.45
Target(s): 96.50
Current Option Gain/Loss: -50.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/01 update: PH did not want to cooperate. Shares hit our trigger on an intraday spike higher that reversed lower on us. Today the stock underperformed the market and spiked lower to hit our stop at $88.45.

- Suggested Positions -

Mar $90 call (PH1217C90) Entry $2.65 exit $1.30 (-50.9%)

03/01/12 stopped out at $88.45
02/29/12 triggered at $91.25
02/25/12 adjusted trigger to buy calls to $91.25

chart:

Entry on February 29 at $91.25
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on February 22, 2012