Editor's Note:

Better than expected ISM data this morning helped spark a widespread rally. Unfortunately stocks gave back a good chunk of their gains by the closing bell.

Our SINA trade was stopped out.

Current Portfolio:


CALL Play Updates

Alliance Data Sys. - ADS - close: 129.05 change: +0.56

Stop Loss: 126.75
Target(s): 137.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
05/01 update: ADS produced a big bounce off its morning lows but the rally stalled at round-number resistance near $130.00. Currently we have a trigger to buy calls at $130.75. A breakout could spark some short covering. The most recent data listed short interest at 18% of the small 48.7 million share float.

Trigger @ $130.75

- Suggested Positions -

buy the May $130 call (ADS1219E130)

- or -

buy the Jun $135 call (ADS1216F135)

Entry on April xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 700 thousand
Listed on April 28, 2012


Capital One Financial - COF - close: 56.02 change: +0.54

Stop Loss: 53.45
Target(s): 59.00
Current Option Gain/Loss: May55c: +25.0% & Jun57.5c: +27.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/01 update: Financial stocks were some of the market's best performers on Tuesday. COF rallied toward $57.00 intraday before paring its gains. If you're looking for a new entry point consider buying calls on a dip near $55.50. FYI: The Point & Figure chart for COF is bullish with a $62 target.

- Suggested Positions -

Long May $55 call (COF1219E55) Entry $1.40

- or -

Long Jun $57.50 call (COF1216F57.5) Entry $1.07

04/26/12 triggered at $55.25

Entry on April 26 at $55.25
Earnings Date 07/11/12 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on April 25, 2012


3M Co. - MMM - close: 89.60 change: +0.24

Stop Loss: 88.45
Target(s): 94.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/01 update: The market's widespread rally helped lift MMM toward resistance near $90.00 but shares failed to breakout. I am suggesting a trigger to buy calls at $90.25 with a stop at $88.45. Our multi-week target is $94.50.

Trigger @ 90.25

- Suggested Positions -

buy the May $90 call (MMM1219E90)

- or -

buy the Jun $90 call (MMM1216F90)

Entry on April xx at $ xx.xx
Earnings Date 07/24/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on April 26, 2012


NetEase, Inc. - NTES - close: 59.96 change: -0.36

Stop Loss: 57.95
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the mid May earnings report
New Positions: Yes, see below

Comments:
05/01 update: Tuesday proved to be a quiet session for NTES. The stock churned sideways on either side of the $60.00 level. The intraday high was $60.42. I am suggesting we use a trigger to buy calls on a rise at $60.75. We'll use a stop loss at $57.95 to start. Our exit target is $64.75. We do not want to hold over the mid May earnings report. FYI: The Point & Figure chart for NTES is bullish with a $68 target.

Trigger @ $60.75

- Suggested Positions -

buy the May $60 call (NTES1219E60)

- or -

buy the May $65 call (NTES1219E65)

Entry on April xx at $ xx.xx
Earnings Date 05/16/12 (unconfirmed)
Average Daily Volume = 588 thousand
Listed on April 28, 2012


PriceSmart Inc. - PSMT - close: 81.48 change: -1.06

Stop Loss: 77.65
Target(s): 84.75
Current Option Gain/Loss: +18.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/01 update: PSMT is down for a second day in a row after Friday's big surge higher. I am still expecting short-term support near $80.00. Readers could use a dip or a bounce near $80 as a new entry point. Our exit target is $84.75 but more aggressive traders may want to aim higher.

Earlier Comments:
The daily chart has an inverse head-and-shoulders pattern that is forecasting an $88 target. Our exit target is $84.75. More conservative traders may want to consider a tighter stop loss. FYI: The Point & Figure chart for PSMT is bullish with a $95 target.

- Suggested Positions -

Long May $80 call (PSMT1219E80) Entry $3.30

04/28/12 new stop loss @ 77.65
04/24/12 PSMT is underperforming with a -4.3% reversal lower.
04/23/12 triggered at $80.75

Entry on April 23 at $80.75
Earnings Date 07/05/12 (unconfirmed)
Average Daily Volume = 313 thousand
Listed on April 21, 2012


Ross Stores Inc. - ROST - close: 61.50 change: -0.72

Stop Loss: 59.45
Target(s): 64.50
Current Option Gain/Loss: +22.7%
Time Frame: exit prior to the mid May earnings report
New Positions: , see below

Comments:
05/01 update: Our new trade on ROST is off to a good start. Shares opened at $61.58 and rallied to a new high just over $63.00 before paring its gains a bit.

Earlier Comments:
We'll set our exit target at $64.50 but if shares don't hit our exit in time we'll close this trade prior to the mid May earnings report.

(small positions) - Suggested Positions -

Long May $62.50 call (ROST1219E62.5) Entry $1.10

Entry on May 01 at $61.58
Earnings Date 05/17/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on April 30, 2012


PUT Play Updates

Rockwell Collins - COL - close: 55.58 change: -0.31

Stop Loss: 56.15
Target(s): 51.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/01 update: COL tried to bounce but shares reversed at $56.00. I suspect we'll see COL test support near $55.00 soon. I am suggesting we buy puts if COL hits $54.75 or lower. However, if COL continues to bounce we'll probably drop it soon as a bearish candidate.

Trigger @ 54.75

- Suggested Positions -

buy the May $55 PUT (COL1219Q55)

- or -

buy the Jun $55 PUT (COL1216R55)

Entry on April xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on April 25, 2012


Jos. A Bank Clothiers - JOSB - close: 48.04 change: +0.49

Stop Loss: 50.25
Target(s): 45.25
Current Option Gain/Loss: May50p: -21.6% or May$45p: -61.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/01 update: The stock market's widespread rally this morning helped lift JOSB to $48.98. The stock reversed lower before hitting its 20-dma. I don't see any changes from my prior comments.

I am leaving our stop loss at $50.25 tonight but more conservative traders may want to lower theirs toward the 20-dma near $49.40 or closer to the $49.00 level instead.

Earlier Comments:
We want to limit our position size because JOSB has an elevated amount of short interest. The most recent data listed short interest at 18.7% of the very small 27.5 million share float and this raises the risk for a short squeeze. Our short-term target is $45.25. More aggressive traders may want to aim for the $42-41 area instead.

(small positions)

Long May $50 PUT (JOSB1219Q50) Entry $3.00

- or -

Long May $45 PUT (JOSB1219Q45) Entry $0.65

Entry on April 23 at $47.50
Earnings Date 05/30/12 (unconfirmed)
Average Daily Volume = 596 thousand
Listed on April 21, 2012


Joy Global, Inc. - JOY - close: 70.65 change: -0.12

Stop Loss: 72.25
Target(s): 65.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
05/01 update: JOY dipped toward support near $70.00 this morning but shares managed to rebound intraday. There is no change from my prior comments. We're still waiting for a breakdown under support near $70.00.

I am suggesting we launch small bearish positions if shares hit $69.75. We'll try and limit our risk with a stop loss at $72.25 but I have to warn you that JOY can be a volatile stock. Adding to the volatility has been the occasional rumor that JOY might be a takeover target.

If triggered at $69.75 we will target a drop to $65.25. More aggressive traders could aim for the $62-60 zone.

Trigger @ 69.75 (small positions)

- Suggested Positions -

buy the May $70 PUT (JOY1219Q70)

Entry on April xx at $ xx.xx
Earnings Date 05/31/12 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on April 25, 2012


Ulta Salon - ULTA - close: 89.08 change: +0.90

Stop Loss: 91.65
Target(s): 82.50
Current Option Gain/Loss: -44.4%
Time Frame: up to May option expiration
New Positions: see below

Comments:
05/01 update: ULTA followed the market higher and then followed it lower when stocks began to retreat this afternoon. This looks like a failed rally near its 50-dma. Readers can use today's move as a new bearish entry point to buy puts.

- Suggested Positions -

Long May $85 PUT (ULTA1219Q85) Entry $1.35

Entry on May 01 at $87.95
Earnings Date 06/07/12 (unconfirmed)
Average Daily Volume = 651 thousand
Listed on April 30, 2012


CLOSED BEARISH PLAYS

SINA Corp. - SINA - close: 59.80 change: +1.29

Stop Loss: 61.15
Target(s): 51.00
Current Option Gain/Loss: -52.0%
Time Frame: exit prior to the mid May earnings report
New Positions: see below

Comments:
05/01 update: SINA rallied almost 5% in the first hour of trading. I couldn't find any news behind the move other than the market's widespread gains. SINA's move was enough to rally past resistance near $60.00 and hit our stop loss at $61.15 before fading back under the $60.00 level again.

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

(small positions) - Suggested Positions -

May $55 PUT (SINA1219Q55) Entry $2.50 exit $1.20 (-52.0%)

05/01/12 stopped out at $61.15
04/26/12 new stop loss @ 61.15
04/25/12 new stop loss @ 61.65
04/18/12 triggered at $59.40

chart:

Entry on April 18 at $59.40
Earnings Date 05/09/12 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on April 17, 2012