Editor's Note:

The U.S. markets delivered a very widespread rebound similar to the short squeeze we saw last Thursday. Today's move was enough to hit our stop loss on DIA and FDX.

Current Portfolio:


CALL Play Updates

Cigna Corp. - CI - close: 47.68 change: -0.63

Stop Loss: 46.95
Target(s): 52.25
Current Option Gain/Loss: Unopened
Time Frame: up to the May 3rd earnings report.
New Positions: Yes, see below

Comments:
04/17 update: The action in CI today was a little bit disappointing. Shares rallied +1.1% versus a +1.5% gain in the S&P 500. The stock has yet to breakout to new relative highs. We are still waiting for CI to hit our entry point.

I am suggesting a trigger at $48.75 as our entry. We'll start with a stop at $46.95. The $50.00 level is short-term resistance but we're aiming for $52.50. FYI: The Point & Figure chart for CI is bullish with a $60 target.

Trigger @ $48.75

- Suggested Positions -

buy the May $50 call (CI1219E50)

Entry on April xx at $ xx.xx
Earnings Date 05/03/12 (confirmed)
Average Daily Volume = 3.0 million
Listed on April 12, 2012


Family Dollar Stores - FDO - close: 64.70 change: +0.07

Stop Loss: 62.90
Target(s): 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
04/17 update: Trading in FDO was also disappointing. The stock churned sideways in a narrow range. The intraday high was only $65.20.

I am suggesting a trigger to buy calls at $65.35 with a stop loss at $62.90. Our multi-week target is $69.75. FYI: The Point & Figure chart for FDO is bullish with an $88 target.

Trigger @ $65.35

- Suggested Positions -

buy the May $65 call (FDO1219E65)

Entry on April xx at $ xx.xx
Earnings Date 06/27/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on April 16, 2012


NetEase.com - NTES - close: 57.84 change: +1.89

Stop Loss: 55.80
Target(s): see play details
Current Option Gain/Loss: Apr55c: + 1.7% & Apr60c: - 85.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/17 update: The trading gods were kind to us with a +3.3% rally in NTES today. We only have three days left on our April calls. Please note I am suggesting we exit the rest of our April $55 calls when NTES hits $59.00. We'll exit the rest of our April $60 calls when NTES hits $59.50. I am not suggesting new positions at this time. I am raising the stop loss to $55.80.

FYI: I'd keep an eye on NTES. A breakout past $60.00 could be a new entry point (for May calls).

- Suggested (Small) Positions -

Long Apr $55 call (NTES1221D55) Entry $2.80

- or -

Long Apr $60 call (NTES1221D60) Entry $0.70

04/17/12 new stop loss @ 55.80
04/14/12 new stop loss @ 54.90
03/26/12 sold half at the open.
exit bid on Apr. $55 call @ $0.00 (+67.8%)
exit bid on Apr. $60 call @ $1.95 (+178.5%)
03/24/12 new stop loss @ 54.45.
03/24/12 Prepare to sell half of our positions on Monday to lock in a gain.
Apr $55 call bid currently @ $5.20 (+85.7%)
Apr $60 call bid currently @ $1.95 (+178.5%)
03/22/12 readers may want to go ahead and take profits now
Apr $55 call (+50%), Apr $60 call (+100%)

Entry on March 20 at $56.11
Earnings Date 05/16/12 (unconfirmed)
Average Daily Volume = 584 thousand
Listed on March 19, 2012


O'Reilly Automotive - ORLY - close: 94.76 change: +0.41

Stop Loss: 91.95
Target(s): 98.50
Current Option Gain/Loss: (Apr90c: +76.0%) & May$90c: +67.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
04/17 update: ORLY hit a new record high but today's +0.8% gain underperformed the broader market's bounce. Our April position is closed. All we have left are May $90 calls. I am raising our stop loss to $91.95.

I am not suggesting new positions at current levels.

- Suggested Positions -

Apr $90 call (ORLY1221D90) Entry $2.50 exit $4.40 (+76.0%)

- or -

Long May $90 call (ORLY1219E95) Entry $3.95

04/17/12 new stop loss @ 91.95
04/16/12 planned exit for Apr $90 call at the open.
option bid was $4.40 (+76.0%)
04/14/12 plan to exit our April calls at the open on Monday
04/14/12 new stop loss @ 89.90
04/07/12 moved exit target to $98.50
04/03/12 new stop loss @ 89.45
03/26/12 triggered at $91.25

Entry on March 26 at $91.25
Earnings Date 04/25/12 (confirmed)
Average Daily Volume = 887 thousand
Listed on March 24, 2012


Ulta Salon, Cosmetics - ULTA - close: 94.46 change: +1.31

Stop Loss: 91.49
Target(s): 98.50
Current Option Gain/Loss: -60.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/17 update: Thankfully there was no follow through on yesterday's bearish reversal candlestick in ULTA. The stock remains in a sideways trading range and we're running out of time. We're going to need ULTA to rally into the $96.50 area if we want to breakeven on this trade and we've only got three days left.

I am not suggesting new positions at this time.

- Suggested Positions -

Long Apr $95 call (ULTA1221D95) Entry $1.65

04/03/12 adjusted target to $98.50
03/28/12 new stop loss @ 89.95
03/26/12 new stop loss @ 89.45
03/24/12 adjusted exit target to $97.50
03/21/12 ULTA hit our trigger at $91.25

Entry on March 21 at $91.25
Earnings Date 06/07/12 (unconfirmed)
Average Daily Volume = 759 thousand
Listed on March 20, 2012


PUT Play Updates

BorgWarner - BWA - close: 83.59 change: +0.99

Stop Loss: 84.55
Target(s): 75.50
Current Option Gain/Loss: -92.0%
Time Frame: up to the April 26th earnings report
New Positions: see below

Comments:
04/17 update: BWA is definitely not cooperating. Shares flirted with a breakout past resistance near $84.00 today. The intraday high was $84.40. If BWA continues to climb tomorrow the stock will likely hit our stop loss at $84.55. We only have three days left on our April options. I am not suggesting new positions at this time.

Earlier Comments:
We do want to keep our position size small. The most recent data listed short interest at 16% of the 107 million-share float. That does raise the risk of a short squeeze.

- Suggested (small) Positions -

Long Apr $80 PUT (BWA1221P80) Entry $1.25

04/14/12 Friday's reversal looks like a new entry point
04/10/12 triggered at $81.25

Entry on April 10 at $81.25
Earnings Date 04/26/12 (confirmed)
Average Daily Volume = 1.1 million
Listed on April 09, 2012


Dollar Thrifty Automotive - DTG - close: 79.55 change: +1.63

Stop Loss: 80.55
Target(s): 72.50
Current Option Gain/Loss: Unopened
Time Frame: up to its early May earnings report
New Positions: see below

Comments:
04/17 update: Our new DTG put play is not off to a very good start. A widespread market bounce pushed DTG to a +2.0% gain and a reversal of yesterday's declines. The stock did stall at resistance near $80.00.

I am increasing our risk by moving our stop loss to $80.55. I want to give DTG just a little more room to maneuver. We'd hate to see a little spike to $80.10, hit our stop, and then see shares reverse lower. I'm not suggesting new positions at this time.

- Suggested Positions -

Long May $75 PUT (DTG1219Q75) Entry $1.75

04/17/12 new stop loss @ 80.55
04/17/12 DTG gapped open at $78.36

Entry on April 17 at $78.36
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 247 thousand
Listed on April 16, 2012


EQT Corp. - EQT - close: 46.37 change: +1.04

Stop Loss: 48.25
Target(s): 42.00-40.00
Current Option Gain/Loss: Apr$45P: -80.7% & May45P: -21.8%
Time Frame: up to its April 26th earnings report
New Positions: see below

Comments:
04/17 update: After hitting new relative lows yesterday the market's widespread bounce today helped fuel a +2.2% bounce in EQT. Shares could see an oversold rebound to their 10-dma. I am not suggesting new positions at this time.

Note: we need to exit our April puts before they expire this weekend.

We want to exit all positions prior to the April 26th earnings report.

- Suggested Positions -

Long Apr $45 PUT (EQT1221P45) Entry $0.52

- or -

Long May $45 PUT (EQT1219P45) Entry $1.60

04/16/12 triggered at $45.70

Entry on April 16 at $45.70
Earnings Date 04/26/12 (confirmed)
Average Daily Volume = 1.4 million
Listed on April 11, 2012


Ryder System, Inc. - R - close: 50.27 change: +0.33

Stop Loss: 52.05
Target(s): 45.50
Current Option Gain/Loss: Apr50p: -75.0% & May$50p: - 8.0%
Time Frame: exit before April option expiration
New Positions: see below

Comments:
04/17 update: Thankfully shares of R did not see much of a bounce and the path of least resistance still appears to be down. There is resistance near its 200-dma and near the $51.50 area.

Note: we did launch new May $50 put positions at the open this morning.

We do not want to hold over the late April earnings report.

Don't forget that April options expire in four trading days.

- Suggested Positions -

Long Apr $50 PUT (R1221P50) Entry $1.00

- or -

Long May $50 PUT (R1218Q50) Entry $1.80

04/17/12 opened the May $50 put position
04/13/12 triggered at $49.75

Entry on April 13 at $49.75
Earnings Date 04/24/12 (unconfirmed)
Average Daily Volume = 567 thousand
Listed on April 10, 2012


Timken Co. - TKR - close: 50.65 change: +0.80

Stop Loss: 51.55
Target(s): 45.50
Current Option Gain/Loss: -78.9%
Time Frame: exit before the April 25th earnings report
New Positions: see below

Comments:
04/17 update: TKR's bounce ran out of steam midday and shares pared their gains to just +1.6%. The stock did manage to close over the $50.00 mark. I am not suggesting new positions at this time. Don't forget that April puts expire in three trading days.

- Suggested (small) Positions -

Long Apr $50 PUT (TKR1221P50) Entry $1.90

04/10/12 triggered at $48.90

Entry on April 10 at $48.90
Earnings Date 04/26/12 (unconfirmed)
Average Daily Volume = 846 thousand
Listed on April 09, 2012


Weight Watchers Intl. - WTW - close: 73.56 change: +0.50

Stop Loss: 77.25
Target(s): 70.50
Current Option Gain/Loss: - 7.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
04/17 update: WTW produced a meager 50-cent bounce that stalled twice in the $74.30 area. I'm not suggesting new positions. We only have three days left on April options.

Earlier Comments:
The plan was to keep our position size small to limit our risk. I want to warn you that WTW could be prone to short squeezes with short interest at 18.5% of the small 35 million-share float.

- Suggested (small) Positions -

Long Apr $75 PUT (WTW1221P75) Entry $2.05

04/14/12 new stop loss @ 77.25
04/10/12 new stop loss @ 78.25.
04/09/12 WTW gapped open lower at $73.99

Entry on April 09 at $73.99
Earnings Date 05/03/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on April 07, 2012


CLOSED BEARISH PLAYS

Dow Jones Industrial ETF - DIA - close: 130.94 change: +1.87

Stop Loss: 130.65
Target(s): 125.00 and 122.00
Current Option Gain/Loss: May127p: -23.7% & May124p: -19.8%
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
04/17 update: Hmm... was our stop loss too close? Possibly but today's move is definitely a short-term bullish breakout past several layers of resistance in the $130.00 area. The DIA is now above all of its significant moving averages. Our stop loss was hit at $130.65.

It is worth noting that the DIA will likely trade lower tomorrow morning in reaction to post-earnings declines for some of the DJIA's components tonight (namely IBM and INTC).

- Suggested Positions -

May $127 PUT (DIA1219Q127) Entry $1.77 exit $1.35 (-23.7%)

- or -

May $124 PUT (DIA1219A124) Entry $1.06 exit $0.85 (-19.8%)

04/17/12 stopped out at $130.65

chart:

Entry on April 16 at $129.23
Earnings Date --/--/--
Average Daily Volume = 6.3 million
Listed on April 14, 2012


FedEx Corp. - FDX - close: 90.46 change: +2.28

Stop Loss: 90.55
Target(s): 85.05
Current Option Gain/Loss: -45.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
04/17 update: The market seemed to experience another short squeeze just like the one we saw last Thursday. FDX reacted in a similar fashion and the stock saw a +2.5% bounce. It was enough to push shares back above resistance near $90.00. The stock hit our stop loss at $90.55.

I'd keep a wary eye on FDX. I'm not convinced the correction lower is over.

- Suggested Positions -

Long May $85 PUT (FDX1219Q85) Entry $1.51 exit $0.83 (-45.0%)

chart:

Entry on April 16 at $88.57
Earnings Date 06/19/12 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on April 14, 2012