Editor's Note:

The U.S. markets snapped back off their morning spike lower but the major indices struggled to stay in positive territory.

Our active bullish trades are doing well but our active bearish trades are not cooperating.

Current Portfolio:


CALL Play Updates

Alliance Data Sys. - ADS - close: 129.67 change: +0.62

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:
05/02 update: ADS continues to bounce around the $128.00-130.00 zone. We are waiting for a move higher. 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: 56.08 change: +0.06

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:
05/02 update: Traders bought the dip in COF at $55.22 this morning. The stock managed to close in positive territory, outperforming the major indices. 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: 89.52 change: -0.08

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:
05/02 update: Shares of MMM continue to churn sideways under resistance at the $90.00 level. 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: 60.16 change: +0.20

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:
05/02 update: NTES has now spent five days consolidating sideways on either side of the $60.00 level. I'm still expecting a breakout higher. 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: 83.38 change: +1.90

Stop Loss: 77.65
Target(s): 84.75
Current Option Gain/Loss: +21.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/02 update: PSMT displayed some relative strength today. Traders bought the dip near $80 support and the stock outperformed the market with a +2.3% gain. PSMT looks poised to rally past the $84.00 level soon. 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


Praxair Inc. - PX - close: 116.44 change: +0.25

Stop Loss: 113.90
Target(s): 124.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/02 update: It was a quiet day for PX with the stock bouncing around the $115-117 range.

I am suggesting a trigger to buy calls at $117.25. We'll start this trade with a stop loss at $113.90 although more conservative traders may want to use a stop closer to $115.00 instead. The $120 level is potential round-number resistance but we are aiming for $124.50. FYI: The Point & Figure chart is bullish with a $145 target.

Trigger @ $117.25

- Suggested Positions -

buy the May $115 call (PX1219E115)

- or -

buy the Jun $120 call (PX1216F120)

Entry on May xx at $ xx.xx
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 01, 2012


Ross Stores Inc. - ROST - close: 63.85 change: +1.39

Stop Loss: 59.45
Target(s): 64.50
Current Option Gain/Loss: +118.1%
Time Frame: exit prior to the mid May earnings report
New Positions: , see below

Comments:
05/02 update: ROST was showing relative strength again. The stock shot higher at the open and closed the session up +2.2%. More conservative traders may want to exit tomorrow, before the monthly same-store sales data for the retail sector is released on Thursday. Currently our exit target is $64.50. I am not suggesting new positions at this time.

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

05/02/12 readers might want to exit tomorrow at the close to lock in gains early. Our exit target remains $64.50. current option bid is $2.40 (+118.1%)

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: 55.05 change: -0.53

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:
05/02 update: COL underperformed the market today with a -0.9% decline. Shares flirted with a breakdown under support near $55.00. The intraday low was $54.83. I am suggesting we buy puts if COL hits $54.75 or lower.

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: 48.73 change: +0.69

Stop Loss: 50.25
Target(s): 45.25
Current Option Gain/Loss: May50p: -40.0% or May$45p: -76.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/02 update: Hmm... JOSB is not cooperating with us. The stock is inching higher and nearing resistance at the $49.00 level. I am not suggesting new positions at this time.

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

FYI: The retail sector will digest the monthly same-store sales data released by several major brands on Thursday morning this week. This data should move the industry one way or the other.

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: 70.60 change: -0.05

Stop Loss: 72.25
Target(s): 65.25
Current Option Gain/Loss: - 24.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/02 update: Our aggressive trade on JOY is open. The stock gapped open lower, under support at $70.00, and quickly hit our trigger to buy puts at $69.75. Unfortunately the sell-off didn't stick and JOY bounced back from its intraday low of $68.75 to close almost unchanged on the session. This could be a bear-trap, false breakdown pattern. I am not suggesting new positions with JOY above $70.00.

Earlier Comments:
The plan was to limit our risk by keeping our position size small. 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.

(small positions)- Suggested Positions -

Long May $70 PUT (JOY1219Q70) Entry $2.50

05/02/12 triggered at $69.75

Entry on May 02 at $69.75
Earnings Date 05/31/12 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on April 25, 2012


Ulta Salon - ULTA - close: 91.33 change: +2.25

Stop Loss: 92.15
Target(s): 82.50
Current Option Gain/Loss: -44.4%
Time Frame: up to May option expiration
New Positions: see below

Comments:
05/02 update: Readers may want to exit early immediately. ULTA is not cooperating. There has been no follow through on the bearish reversal pattern. The action over the last couple of weeks still looks bearish but shares could easily bounce back toward the $92-93-94 area before rolling over again. On a short-term basis ULTA's close over its 50-dma today is bullish. Yet shares failed to breakout past resistance near $91.50.

I am increasing our risk just a bit by raising our stop loss to $92.15 from $91.65. I am not suggesting new positions at this time.

- Suggested Positions -

Long May $85 PUT (ULTA1219Q85) Entry $1.35

05/02/12 Readers may want to exit early right now. ULTA is not cooperating. I am adjusting our stop loss to $92.15.

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