Editor's Note:

We saw two trades get triggered on Friday (BBBY, HAIN). Plus, we're planning an early exit for a few trades (VZ, FISV, SI).

Current Portfolio:


CALL Play Updates

Bed Bath & Beyond Inc. - BBBY - close: 72.40 change: -0.07

Stop Loss: 69.75
Target(s): 79.00
Current Option Gain/Loss: Jun75c: -18.4% & Jul75c: - 8.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: BBBY spiked higher on Friday and briefly traded above $73.00. Our trigger to buy calls was hit at $72.75. Our trade is open. Yet the stock's inability to close above resistance is a bit worrisome. I would not launch new positions again until BBBY traded above $73.10.

Our multi-week target is $79.00. FYI: The Point & Figure chart for BBBY is bullish with an $83 target.

Trigger @ 72.75

- Suggested Positions -

Long JUN $75 call (BBBY1216F75) Entry @ $1.03

- or -

Long JUL $75 call (BBBY1221G75) Entry $2.72

05/25/12 triggered at @72.75

chart:

Entry on May 25 at $72.75
Earnings Date 06/20/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on May 24, 2012


Cymer Inc. - CYMI - close: 53.30 change: -0.08

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: Jun55c: -11.1% & Aug55c: - 5.0%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
05/26 update: CYMI has been quietly churning sideways for three days in a row. The consolidation narrowed on Friday. The stock looks poised to break higher but it's not guaranteed. Nimble traders could buy dips near $52.00 while more cautious traders may want to wait for a new relative high over $53.70.

Our multi-week target is $57.00. FYI: The Point & Figure chart for CYMI is bullish with a long-term $80 target.

- Suggested Positions -

Long Jun $55 call (CYMI1216F55) Entry $0.90

- or -

Long Aug $55 call (CYMI1218H55) Entry $2.95

05/22/12 triggered at $52.60

chart:

Entry on May 22 at $52.60
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 476 thousand
Listed on May 21, 2012


Edwards Lifesciences - EW - close: 87.40 change: +0.07

Stop Loss: 83.75
Target(s): 89.50
Current Option Gain/Loss: Jun85c: +15.6% & Jun$90c: +21.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/26 update: EW rallied to $88.00 intraday but only ended the session with a minor gain. The afternoon slide lower pushed our option values lower as well. I am not suggesting new positions at current levels. Readers might want to already start adjusting their stop loss higher.

FYI: The Point & Figure chart for EW is bullish with a $126 target.

- Suggested Positions -

Long Jun $85 call (EW1216F85) Entry $3.20

- or -

Long Jun $90 call (EW1216F90) Entry $1.15

chart:

Entry on May 24 at $85.21
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 23, 2012


Sourcefire, Inc. - FIRE - close: 55.92 change: +0.98

Stop Loss: 52.75
Target(s): 59.35
Current Option Gain/Loss: Jun55c: +13.7% Jun60c: - 6.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: FIRE rallied back toward the $56.00 level on Friday with a +1.7% gain. The stock's outperformance is encouraging. I am not suggesting new positions at this time.

Earlier Comments:
FIRE could see some short covering. The most recent data listed short interest at 14% of the very small 28 million share float.

- Suggested Positions -

Long Jun $55 call (FIRE1216F55) Entry $2.90

- or -

Long Jun $60 call (FIRE1216F60) Entry $1.50

chart:

Entry on May 24 at $55.50
Earnings Date 08/01/12 (unconfirmed)
Average Daily Volume = 857 thousand
Listed on May 23, 2012


The Hain Celestial Group - HAIN - close: 55.95 change: +0.91

Stop Loss: 52.90
Target(s): 59.00
Current Option Gain/Loss: Jun55c: + 2.5% Jul60c: - 4.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: Bullish analyst comments on Friday helped push HAIN to a new intraday high and shares closed up +1.6%. The stock settled right under its prior high near $56.00. Shares actually gapped open higher at $55.37, which was above our entry trigger at $55.25. The play is open.

FYI: The Point & Figure chart for HAIN is bullish with a $59 target.

- Suggested Positions -

Long JUN $55 call (HAIN1216F55) Entry $2.00

- or -

Long JUL $60 call (HAIN1221G60) Entry $1.15*

*entry price is an estimate. looks like a possible bad tick at $5.00 on the morning of 05/25/12
05/25/12 trade opened on gap higher at $55.37, trigger was 55.25

chart:

Entry on May 25 at $55.37
Earnings Date 08/23/12 (unconfirmed)
Average Daily Volume = 742 thousand
Listed on May 24, 2012


Medivation, Inc. - MDVN - close: 87.38 change: -1.54

Stop Loss: 84.90
Target(s): 99.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/26 update: The rally in MDVN lost steam on Friday. Shares reversed course under resistance and underperformed with a -1.7% decline. The stock continues to trade with a bullish consolidation pattern. We are waiting for a breakout higher.

The option spreads are a little wide in MDVN so I am suggesting smaller positions to limit our risk. We will use a trigger at $90.25 to open positions with a stop loss at $84.90 to start. Our target is $99.00. FYI: The Point & Figure chart for MDVN is bullish with a $101 target.

Trigger @ 90.25 (small positions)

- Suggested Positions -

buy the JUN $95 call (MDVN1216F95)

- or -

buy the JUL $100 call (MDVN1221G100)

chart:

Entry on May xx at $ xx.xx
Earnings Date 08/09/12 (unconfirmed)
Average Daily Volume = 755 thousand
Listed on May 24, 2012


Verizon Communication - VZ - close: 41.45 change: +0.06

Stop Loss: 39.95
Target(s): 45.75
Current Option Gain/Loss: Jun$42c: -46.6% & Jul$43c: -54.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/26 update: We have run out of patience with shares of VZ. The stock is just not moving fast enough. I am suggesting an early exit on Monday morning at the open.

- Suggested Positions -

Long Jun $42 call (VZ1216F42) Entry $0.60

- or -

Long Jul $43 call (VZ1221G43) Entry $0.66

05/26/12 prepare to exit on Monday at the open.
05/18/12 triggered on gap higher at $41.61 (trigger was 41.55)

chart:

Entry on May 18 at $41.61
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 13.8 million
Listed on May 17, 2012


PUT Play Updates

ITT Educational Services - ESI - close: 57.90 change: +1.52

Stop Loss: 59.25
Target(s): 51.50
Current Option Gain/Loss: -16.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/26 update: I could not find any news to explain the big bounce in ESI. It's probably just an oversold bounce on the way down. However, just to be cautious here we are lowering our stop loss down to $59.25. More aggressive traders will want to keep their stop above $60.00 since the $60.00 level is the nearest resistance.

- Suggested Positions -

Long Jun $55 PUT (ESI1216R55) Entry $2.55

05/26/12 new stop loss @ 59.25
05/24/12 new stop loss @ 60.55

chart:

Entry on May 23 at $57.71
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 410 thousand
Listed on May 22, 2012


Fiserv, Inc. - FISV - close: 67.17 change: +0.21

Stop Loss: 68.55
Target(s): 63.50
Current Option Gain/Loss:(May$70p: +12.5%) & Jun65P: - 44.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/26 update: FISV continues to bounce and closed above its 20-dma on Friday. We are losing patience here. I am suggesting we exit positions at the open on Monday morning. More aggressive traders will want to keep the play open and keep their stop loss just above resistance at the $68.0 level or above the simple 50-dma instead.

- Suggested Positions -

- previously closed position -
May $70 put (FISV1219Q70) Entry $3.02 exit $3.40 (+12.5%)

- or -

Long Jun $65 put (FISV1216R65) Entry $0.90

05/26/12 prepare to exit on Monday morning.
05/23/12 Raising our RISK - new stop loss @ 68.55, above the 50-dma
More conservative traders will want to exit now instead.
05/19/12 new stop loss @ 67.25
05/17/12 new stop loss @ 68.25
05/15/12 closed May $70 puts at the open: bid @ 3.40 (+12.5%)
05/14/12 prepare to exit the May $70 puts at the open tomorrow
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: 63.58 change: +0.24

Stop Loss: 66.25
Target(s): 61.50
Current Option Gain/Loss: +36.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: GD displayed some volatility at the open on Friday with a surge toward $64.00 but the rally slowly faded. The stock pared its gains down to +0.3%. More conservative traders may want to adjust their stop loss closer to $65 or the 10-dma. I am not suggesting new positions.

- Suggested Positions -

Long Jun $65 PUT (GD1216R65) Entry $1.50

05/23/12 tweaking our stop to $66.25
05/19/12 new stop loss @ 66.05
05/17/12 new stop loss @ 66.55
05/15/12 triggered @ 65.75

chart:

Entry on May 15 at $65.75
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on May 09, 2012


Informatica - INFA - close: 45.72 change: +0.52

Stop Loss: 45.25
Target(s): 40.25
Current Option Gain/Loss: +33.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: The trend for INFA still looks down especially after Thursday's failed rally under $44.00. More conservative traders may want to lower their stop closer to the $44 level.

- Suggested Positions -

Long Jun $45 PUT (INFA1216R45) Entry $2.40

05/19/12 readers may want to take profits now
05/16/12 new stop loss @ 45.25
05/14/12 triggered at $44.50

chart:

Entry on May 14 at $44.50
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on May 10, 2012


iShares Russell 2000 ETF - IWM - close: 76.59 change: -0.05

Stop Loss: 77.35
Target(s): 72.00-70.00 zone
Current Option Gain/Loss: -12.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/26 update: If you look at the consolidation inside the IWM over the past week there is a bullish trend of higher lows. You might be able to interpret this as a growing bear-flag pattern. Or you could argue that the small cap ETF has found new support and is coiling for a bigger bounce.

I still see the $78.00 level as the key resistance line but we're going to try and reduce our risk by moving the stop loss down to $77.35. More aggressive traders will want to keep their stop above $78.00 instead.

- Suggested Positions -

Long Jul $75 PUT (IWM1221S75) Entry $3.20

05/26/12 new stop loss @ 77.35
05/22/12 triggered at $76.75
05/19/12 adjusted strategy: buy puts on a bounce at $76.75, stop 78.75
05/17/12 temporarily wait on buying puts. We will re-evaluate tomorrow.

chart:

Entry on May 22 at $76.75
Earnings Date --/--/--
Average Daily Volume = 53 million
Listed on May 12, 2012


L-3 Communications - LLL - close: 67.19 change: -0.49

Stop Loss: 68.75
Target(s): 62.75
Current Option Gain/Loss: -18.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: LLL was showing weakness on Friday. The last few days traders were buying dips below the $67.50 level but buying interest ran out of steam on Friday. Shares look poised to break down further. You could launch positions now or wait for a new drop under $66.40 as an entry point for puts.

- Suggested Positions -

Long Jul $65 PUT (LLL1221S65) Entry $1.85

05/23/12 triggered at $66.75

chart:

Entry on May 23 at $66.75
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 856 thousand
Listed on May 19, 2012


Reliance Steel - RS - close: 48.00 change: -0.06

Stop Loss: 50.55
Target(s): 42.50
Current Option Gain/Loss: -24.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: Friday was a very quiet day for RS with shares drifting sideways in a narrow range. Last week's sideways consolidation almost looks like a bear-flag pattern. Readers can use a drop under $47.00 as a new bearish entry point.

FYI: The Point & Figure chart for RS is bearish with a $38 target.

- Suggested Positions -

Long JUN $48 PUT (RS1216R48) Entry $2.45

chart:

Entry on May 23 at $47.79
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 534 thousand
Listed on May 22, 2012


Siemens AG - SI - close: 85.51 change: +1.17

Stop Loss: 87.75
Target(s): 80.25
Current Option Gain/Loss: -51.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/26 update: There is not much reason for European stocks to be bouncing given the situation in Europe but SI rallied on Friday. This move higher was probably due to a German bank (DB) upgrading the stock. The trend is still down but SI could see a bigger bounce. We are going to go ahead and exit early at the open on Monday.

- Suggested (SMALL) Positions -

Long Jun $80 PUT (SI1216R80) Entry $1.35

05/26/12 upgraded by DB on Friday. We want to exit early on Monday morning
05/16/12 SI gapped open higher at $84.94

chart:

Entry on May 16 at $84.94
Earnings Date --/--/--
Average Daily Volume = 832 thousand
Listed on May 15, 2012