Editor's Note:

The S&P 500 and the NASDAQ inched higher for the week but leadership is narrowing. Our new WFM trade has been opened. I removed MMM as a candidate. CAT and EMN were stopped out.

Current Portfolio:


CALL Play Updates

Alexion Pharma. - ALXN - close: 85.26 change: +0.72

Stop Loss: 82.75
Target(s): 89.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
03/03 update: Unfortunately our ALXN trade is still not open yet. The S&P 500 index opened flat and ALXN opened down, which negated our new entry point. Trades did buy the dip in ALXN again and shares outperformed the major indices with a +0.8% gain.

ALXN definitely looks poised to move higher. We will adjust our entry point strategy to use a trigger at $85.55 with a stop loss at $82.75. Our target is unchanged at $89.50.

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

Trigger - buy calls at $85.55

- Suggested (SMALL) Positions -

buy the Apr $85 call (ALXN1221D85)

- or -

buy the Apr $90 call (AXLN1221D90)

03/03/12 adjust entry strategy: buy calls at $85.55, stop loss @ 82.75
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

chart:

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: 82.24 change: -0.07

Stop Loss: 79.90
Target(s): 87.00
Current Option Gain/Loss: -25.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/03 update: ARG has spent the last couple of days quietly consolidating sideways. If the market cooperates we should see ARG rally off its 10-dma and rise to new highs. However, given that the market's advance looks a little tired I am not suggesting new positions at this time. We will raise our stop loss up to $79.90.

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

03/03/12 new stop loss @ 79.90
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.

chart:

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: 52.99 change: -0.58

Stop Loss: 51.40
Target(s): 57.50
Current Option Gain/Loss: -23.7%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
03/03 update: The rally in AXP lost a little steam this week. Shares have been consolidating sideways near $53.00 and the middle of its rising channel. If the market does see a decline we could see AXP dip toward $52.00 or its 30-dma. I am inching our stop loss up to $51.40. I'm not suggesting new positions at this time.

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

03/03/12 new stop loss @ 51.40
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.

chart:

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: 85.42 change: +1.23

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:
03/03 update: BWA displayed plenty of relative strength on Friday morning with a rally to new highs at $86.98. The stock pared its gains to close up above the $85 level with a +1.4% gain on the session.

I am raising our stop loss to $81.25. Our exit target remains $89.00.

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

03/03/12 new stop loss @ 81.25
02/25/12 new stop loss @ 79.25
02/17/12 trade opened on BWA's gap open higher at $82.49

chart:

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


Capital One Financial - COF - close: 49.89 change: -0.35

Stop Loss: 47.75
Target(s): 54.75
Current Option Gain/Loss: Mar$50c: -31.5% & Apr$50c: -14.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/03 update: Hmm... now it's time we get a little concerned about COF. Broken resistance near $50.00 should have been support. Friday's close under this level is a warning sign. The larger trend of higher lows is still bullish but I am not suggesting new positions at this time. I am inching our stop loss up to $47.95. More conservative traders may want to move their stop closer to the $49.00 level instead.

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

03/03/12 new stop loss at $47.95
02/28/12 triggered at $50.25

chart:

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: $76.49 change: -0.25

Stop Loss: 73.75
Target(s): 82.50
Current Option Gain/Loss: Mar$75c: -14.2% & Apr$77.50c: - 8.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/03 update: The threat of rising gasoline prices has not scared investors out of the retail stocks yet but it remains a risk. COH tagged a new record high at $77.30 before paring its gains. On a short-term basis, if the market is weak, look for a dip into the $75.50-75.00 zone.

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

chart:

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


Goldman Sachs - GS - close: 119.96 change: -1.17

Stop Loss: 116.40
Target(s): 125.00
Current Option Gain/Loss: +76.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/03 update: After Thursday's big gain GS hit some profit taking on Friday. The pullback wasn't that bad. Readers can look for a new dip and bounce in the $118.00-119.00 zone as a new entry point. Please note that I am raising our stop loss to $116.40.

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

03/03/12 new stop loss @ 116.40
02/28/12 GS disclosed it has received a Wells Notice from the SEC
02/28/12 triggered at $118.25

chart:

Entry on February 28 at $118.25
Earnings Date 04/19/12 (unconfirmed)
Average Daily Volume = 6.2 million
Listed on February 21, 2012


Chart Industries - GTLS - close: 67.96 change: -2.07

Stop Loss: 66.40
Target(s): 78.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
03/03 update: There was no follow through on Thursday's bounce and our new trade on GTLS did not open on Friday. The stock underperformed the major indices with a sharp -2.9% decline. Readers might want to consider buying calls on a dip near the $65-64 zone with a tight stop under $64.00. I am tweaking our entry point to a breakout trigger to buy calls at $70.75 and setting our target at $78.50.

FYI: The Point & Figure chart for GTLS is bullish with an $82 target.

Trigger to buy calls @ 70.75

- Suggested Positions -

Buy the Apr $75 call (GTLS1221D75)

03/02/12 trade did not open. Use a trigger at $70.75

chart:

Entry on March xx at $ xx.xx
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 665 thousand
Listed on March 01, 2012


Herbalife Ltd. - HLF - close: 67.46 change: -0.24

Stop Loss: 65.45
Target(s): 72.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
03/03 update: Our new trade on HLF is not open yet. Shares opened lower on Friday, which negated our entry point. The stock did try and breakout past $68.00 but failed given the market's sour nature on Friday. I am adjusting our entry strategy. We only want to buy calls (and small positions at that) if HLF can trade at $68.25. We will adjust our stop loss to $65.45.

Our target is $72.50. FYI: The Point & Figure chart for HLF is bullish with a long-term $100 target.

NOTE: HLF is due to trade ex-dividend on March 5th. We should expect shares to gap down at the open by 40 cents as a result.

Trigger to buy calls @ $68.25 (small positions)

- Suggested Positions -

buy the Mar $70 call (HLF1217C70)

- or -

buy the Apr $70 call (HLF1221D70)

03/02/12 trade did not open. Adjust strategy to buy calls at $68.25 with a stop at $65.45.

chart:

Entry on March xx at $ xx.xx
Earnings Date 05/02/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on March 01, 2012


Noble Corp. - NE - close: 40.29 change: -0.61

Stop Loss: 38.45
Target(s): 44.75
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/03 update: NE opened higher on Friday but quickly reversed. Shares gave up -1.5% but still managed to close above the $40.00 level. If the stock market declines again we might see NE test its 10-dma again. Readers may want to wait for another bounce near the 10-dma before considering new positions.

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

chart:

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: 102.44 change: -1.12

Stop Loss: 99.40
Target(s): 104.75
Current Option Gain/Loss: +38.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
03/03 update: SHW hit some profit taking on Friday. This left shares essentially chopping sideways the last four sessions. SHW should find support near $100 but readers may want to go ahead and take profits early. I am not suggesting new positions at this time.

- 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

chart:

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


Whole Foods Market - WFM - close: 82.81 change: +0.64

Stop Loss: 79.95
Target(s): 87.50
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/03 update: WFM displayed relative strength on Friday with a breakout from its three-week trading range and a rally to new highs. Shares hit our trigger to buy calls at $82.55. Our target is $87.50. FYI: The Point & Figure chart for WFM is bullish with a $103 target.

- Suggested Positions -

Long Apr $85 call (WFM1221D85) Entry $1.88

chart:

Entry on March 02 at $82.55
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on March 01, 2012


Weight Waters Intl. - WTW - close: 78.03 change: -0.82

Stop Loss: 77.45
Target(s): 86.50
Current Option Gain/Loss: -82.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/03 update: WTW erased most of Thursday's bounce with a -1.0% decline on Friday. Shares hit an intraday low of $77.62 and our stop loss is at $77.45. If the market declines again on Monday, WTW could hit our stop loss. More conservative traders may want to exit at the opening bell. 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.

- 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.

chart:

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: 38.60 change: -0.57

Stop Loss: 36.90
Target(s): 43.00
Current Option Gain/Loss:(Feb37c: -48.1%) & Mar36c: - 2.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/03 update: Crude oil hit some profit taking on Friday thanks to another bounce in the U.S. dollar. This helped fuel declines in the oil and energy stocks. The XES lost -1.4%. This ETF should have some support near the $38.50-38.25 area and the $37.25 area. 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.

chart:

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: 59.05 change: -1.30

Stop Loss: 57.45
Target(s): 63.00
Current Option Gain/Loss: Mar$60c: -46.4% & Jun$60c: -13.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/03 update: The pullback in oil and energy stocks also hit shares of the XOP, which fell -2.1%. Look for support in the $58.00-57.50 zone. After Thursday's "inside day" the action on Friday is bearish. 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

chart:

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

Caterpillar, Inc. - CAT - close: 112.49 change: -0.90

Stop Loss: 112.75
Target(s): 122.50
Current Option Gain/Loss: -79.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/03 update: CAT has been underperforming the last couple of days. We were concerned that if the market was weak that CAT would hit our stop loss on Friday. Sure enough CAT continued to underperform and hit our stop at $112.75. After failing to breakout past its 2011 highs for almost a week the stock could be headed for a significant correction. I would not be surprised to see CAT drop back into the $106-100 zone.

- Suggested Positions -

Mar $120 call (CAT1217C120) Entry $1.15 exit $0.24 (-79.1%)

03/02/12 stopped out at $112.75
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

chart:

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


Eastman Chemical Co. - EMN - close: 53.55 change: -0.24

Stop Loss: 53.25
Target(s): 59.00
Current Option Gain/Loss: -31.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/03 update: EMN tagged our stop loss at $53.25 on Friday afternoon. Shares had been struggling. The intraday spike above resistance that hit our trigger to buy calls in the first place wasn't that convincing. Now after four weeks of failing to breakout past resistance near $55.00 EMN looks poised to correct lower.

(small positions) - Suggested Positions -

Apr $55 call (EMN1221D55) Entry $1.75 exit $1.20 (-31.4%)*

03/02/12 stopped out at $53.25
*exit price is an estimate since the option did not trade at the time our stop was hit.
02/29/12 triggered at $55.05
02/27/12 adjusted suggested call from March to April.

chart:

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


3M Co. - MMM - close: 87.52 change: +0.03

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:
03/03 update: We have been patiently waiting for MMM to breakout higher for a while now. While the major indices hit new highs MMM has been unable to breakout of its trading range. On Thursday I suggested we would drop MMM as a candidate if shares didn't improve. Our trade never opened. Readers may want to keep MMM on their watch list. After more than a month of churning sideways if the stock does manage a breakout it could see a strong move.

Breakout Trigger (buy calls) @ $88.75 (small positions)

Trade never opened.

03/03/12 removed MMM from the newsletter for lack of movement.
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.

chart:

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