Editor's Note:

May options expire soon. We are planning to close a few positions on Monday. Please see the individual updates below for details.

Current Portfolio:


CALL Play Updates

Amgen Inc. - AMGN - close: 70.78 change: +0.69

Stop Loss: 68.95
Target(s): 74.90
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/12 update: AMGN was showing some relative strength on Friday with a +0.9% gain. Shares also managed to breakout above its simple 10-dma and its short-term trend of lower highs. This move is bullish and looks like a new entry point to buy calls yet the intraday high was only $71.13. We have a trigger to buy calls at $71.25. Our target is $74.90. More aggressive traders could aim higher.

Trigger @ $71.25 (small positions)

- Suggested Positions -

buy the Jun $70 call (AMGN1216F70)

chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 3.9 million
Listed on May 08, 2012


Airgas Inc. - ARG - close: 92.08 change: -0.41

Stop Loss: 89.65
Target(s): 97.50
Current Option Gain/Loss: May92.5c: -39.1% & Jun95c: -34.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/12 update: After hitting new highs on Thursday there wasn't any follow through on Friday. ARG quickly drifted lower toward its simple 10-dma. The larger trend is still up. I would still consider new positions here but nimble traders may want to wait and buy calls on a dip near the 20-dma near $91.00. Our multi-week target is $97.50. FYI: The Point & Figure chart for ARG is bullish with a $119 target.

NOTE: We want to keep our position size small. You could argue that ARG is forming a wedge pattern, which could be considered bearish.

(small positions) - Suggested Positions -

Long May $92.50 call (ARG1219E92.5) Entry $1.15

- or -

Long Jun $95.00 call (ARG1216F95) Entry $1.45

05/10/12 triggered @ 92.50

chart:

Entry on May 10 at $92.50
Earnings Date 05/03/12
Average Daily Volume = 476 thousand
Listed on May 05, 2012


United Natural Foods - UNFI - close: 51.07 change: +0.47

Stop Loss: 48.25
Target(s): 54.50
Current Option Gain/Loss: +15.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/12 update: UNFI displayed relative strength on Friday with a +0.9% gain. The stock closed at a new record high. Readers might want to consider raising their stop loss closer to the 20-dma (currently near 49.25). If both UNFI and the S&P 500 open positive on Monday we can use this as a new bullish entry point (although you'll probably want to buy June calls since Mays expire soon).

FYI: The Point & Figure chart for UNFI is bullish with a long-term $82 target.

- Suggested Positions -

Long May $50 call (UNFI1219E50) Entry $0.95

chart:

Entry on May 03 at $49.90
Earnings Date 05/31/12 (unconfirmed)
Average Daily Volume = 250 thousand
Listed on May 02, 2012


PUT Play Updates

Baidu, Inc. - BIDU - close: 122.23 change: -1.43

Stop Loss: 130.25
Target(s): 115.00
Current Option Gain/Loss: May125P: +92.8% & Jun120P: +62.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/12 update: News out late Thursday night that BIDU is planning to launch a new smartphone running its Baidu Cloud operating system did not have a positive impact on the stock Friday morning. Shares spiked down at the open, managed to bounce back intraday, and then roll over again.

This remains an aggressive, higher-risk trade. I am lowering our stop loss down to $130.25. I am not suggesting new positions at this time. FYI: The Point & Figure chart for BIDU is bearish with a $106 target.

NOTE: We have five days left on our May puts. The current bid on our May $125 puts is at $4.05 (+92.8%). I am suggesting we exit our May puts at the open on Monday. More aggressive traders could risk holding on for a few more days before they expire.

- Suggested Positions -

Long May $125 put (BIDU1219Q125) Entry $2.10

- or -

Long Jun $120 put (BIDU1216R120) Entry $2.95

05/12/12 new stop loss @ 130.25
Prepare to exit May $125 puts at the open on Monday, current bid $4.05
05/08/12 BIDU gapped open lower at $127.01

chart:

Entry on May 08 at $127.01
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 5.0 million
Listed on May 07, 2012


Rockwell Collins - COL - close: 51.99 change: -0.27

Stop Loss: 54.25
Target(s): 51.50
Current Option Gain/Loss: May $55p: +124.0% & Jun$55p: +72.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/12 update: COL is still sinking and shares hit new relative lows on Friday. Our exit target is at $51.50 but I am suggesting we go ahead and exit our May $55 puts at the open on Monday morning. We will lower our stop loss down to $54.25 for the June puts. I am not suggesting new positions at this time.

- Suggested Positions -

Long May $55 PUT (COL1219Q55) Entry $1.25

- or -

Long Jun $55 PUT (COL1216R55) Entry $1.85

05/12/12 new stop loss @ 54.25
prepare to exit May $55 puts at open on Monday, current bid $2.80
05/05/12 new stop loss @ 55.25
05/03/12 triggered at $54.75

chart:

Entry on May 03 at $54.75
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on April 25, 2012


Fiserv, Inc. - FISV - close: 66.56 change: +0.09

Stop Loss: 70.05
Target(s): 63.50
Current Option Gain/Loss: May$70p: + 5.9% & Jun65P: + 5.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/12 update: FISV is still trying to bounce after testing its 100-dma on Wednesday. The stock hit $67.33 intraday on Friday. I have been suggesting that shares should find resistance near $68.00 so the bounce may not be over yet. I would use a bounce into the $67.75-68.25 area as a new bearish entry point to buy puts (but I'd only buy Junes at this point, May options expire soon).

- Suggested Positions -

Long May $70 put (FISV1219Q70) Entry $3.02

- or -

Long Jun $65 put (FISV1216R65) Entry $0.90

05/07/12 triggered on gap down at $67.26 (our trigger was 67.40)

chart:

Entry on May 07 at $67.26
Earnings Date 05/01/12
Average Daily Volume = 693 thousand
Listed on May 05, 2012


General Dynamic - GD - close: 66.53 change: -0.01

Stop Loss: 68.25
Target(s): 61.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/12 update: GD just reaffirmed its bearish trend of lower highs. The stock bounced on Friday but the rebound reversed at technical resistance at the simple 10-dma. Shares are sitting near support at $66 and its 200-dma. I am suggesting we buy puts if GD trades at $65.75 or lower. More conservative traders may want to wait for a drop under $65.00 instead. Our target is $61.50. FYI: The Point & Figure chart for GD is bearish with a $60 target.

Trigger @ 65.75

- Suggested Positions -

buy the Jun $65 PUT (GD1216R65)

chart:

Entry on May xx at $ xx.xx
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on May 09, 2012


Helmerich & Payne Inc. - HP - close: 45.94 change: -0.37

Stop Loss: 50.55
Target(s): 45.25
Current Option Gain/Loss: May50p: +60.0% & Jun45p: +58.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/12 update: HP bounced off its Friday morning lows but the rebound failed by midday and HP closed off -0.8%. Our target is $45.25. However, more conservative traders may want to take profits now, especially if you are holding the May options, which expire in five days.

I am not suggesting new positions at this time.

- Suggested Positions -

Long May $50 PUT (HP1219Q50) Entry $2.50

- or -

Long Jun $45 PUT (HP1216R45) Entry $1.20

05/12/12 readers may want to take profits now, especially if you're holding the May options, which expire soon.
05/10/12 there has been no follow through on the bounce.
05/08/12 warning! HP has produced a big intraday bounce. This might be a short-term bullish reversal.
05/05/12 new stop loss @ 50.55
05/04/12 HP gapped down at $48.57

chart:

Entry on May 04 at $48.57
Earnings Date 07/27/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on May 03, 2012


Humana Inc. - HUM - close: 78.32 change: -1.08

Stop Loss: 82.25
Target(s): 71.50
Current Option Gain/Loss: Jun80p: +16.6% Jun75P: +17.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/12 update: Healthcare stocks were underperforming as a group on Friday and HUM was underperforming its peers with a -1.3% drop to new relative lows. I would still consider new position snow at current levels. Our exit target is $71.50 but do not be surprised if HUM finds some support and bounces in the $76-75 area. FYI: The Point & Figure chart for HUM is bearish with a $69 target.

- Suggested Positions -

Long Jun $80 put (HUM1216R80) Entry $3.00

- or -

Long Jun $75 put (HUM1216R75) Entry $1.15

chart:

Entry on May 10 at $79.56
Earnings Date 07/30/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on May 09, 2012


Informatica - INFA - close: 45.26 change: -0.13

Stop Loss: 46.25
Target(s): 40.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/12 update: The intraday bounce in INFA on Friday has failed and shares were rolling over into the weekend. The stock looks poised to breakdown under recent lows.

I am suggesting a trigger to buy puts at $44.50. Our target is $40.25. We'll use a stop loss at 46.25. FYI: The Point & Figure chart for INFA is bearish with a $39 target.

Trigger @ 44.50

- Suggested Positions -

buy the Jun $45 PUT (INFA1216R45)

chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on May 10, 2012


Jos. A Bank Clothiers - JOSB - close: 46.64 change: -0.37

Stop Loss: 49.25
Target(s): 45.25
Current Option Gain/Loss: May50p: + 6.6% or May$45p: -61.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/12 update: JOSB is hovering between support near $46.00 and short-term technical resistance at its 10-dma. The current trend is down but we're running out of time. May options expire soon. More conservative traders may want to just abandon ship right now. I am not suggesting new positions and we will lower our stop loss down to $48.15.

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

05/12/12 new stop loss @ 48.15
05/05/12 new stop loss @ 49.25

chart:

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