Editor's Note:

The S&P 500 has extended its rally to six weeks in a row. Most of our bullish candidates are following the indices higher.


Current Portfolio:


CALL Play Updates

BP Prudhoe Bay Royalty Trust - BPT - close: 79.28 change: -0.52

Stop Loss: 78.25
Target(s): 87.50
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings in early March
New Positions: Yes, see below

Comments:
02/09/13: The price of oil ended lower on Friday and that could have slowed BPT's ascent. Shares of BPT flirted with a breakout past $80.00 but failed to hit our entry point.

I am suggesting a trigger to open small bullish positions at $80.25. If triggered our target is $87.50. FYI: The Point & Figure chart for BPT is bullish with a $110 target.

Trigger @ 80.25 *Small Positions*

- Suggested Positions -

buy the Mar $80 call (BPT1316c80) current ask $1.80

chart:

Entry on February -- at $---.--
Average Daily Volume = 131 thousand
Listed on February 07, 2012


Check Point Software Tech. - CHKP - close: 51.66 change: +0.87

Stop Loss: 49.40
Target(s): 54.50
Current Option Gain/Loss: +26.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/09/13: CHKP displayed some relative strength on Friday with a +1.7% gain. Yet the stock is still struggling with resistance at its simple 300-dma and the $52.00 level. I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/06/13 new stop loss @ 49.40

chart:

Entry on February 01 at $50.25
Average Daily Volume = 2.7 million
Listed on January 31, 2012


The Cooper Companies - COO - close: 104.26 change: +1.39

Stop Loss: 99.90
Target(s): 107.50
Current Option Gain/Loss: + 9.2%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/09/13: COO also displayed relative strength on Friday. The stock surged to $105.20 intraday but pared its gains by the closing bell. Honestly, I would not be surprised to see a pullback toward the $103 area again.

Earlier Comments:
Please note that we do want to keep our position size small because the option spreads are a little bit wide. COO is scheduled to report earnings on March 7th. We do not want to hold over the report. FYI: The Point & Figure chart for COO is bullish with a $125 target.

*Small Positions* - Suggested Positions -

Long Mar $105 call (COO1316c105) entry $2.70

chart:

Entry on February 06 at $102.60
Average Daily Volume = 303 thousand
Listed on February 02, 2012


3M Company - MMM - close: 102.66 change: +0.44

Stop Loss: 100.70
Target(s): 106.50
Current Option Gain/Loss: + 3.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/09/13: MMM saw a Friday morning spike to a new all-time high before paring its gains. The trend continues and more conservative traders might be able to get away with a stop loss closer to the simple 10-dma.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk.

- Suggested Positions -

long Mar $100 call (MMM1316c100) entry $2.95

chart:

Entry on February 06 at $102.25
Average Daily Volume = 3.0 million
Listed on February 05, 2012


Rock-Tenn Company - RKT - close: 82.14 change: +0.97

Stop Loss: 79.45
Target(s): 84.85
Current Option Gain/Loss: + 8.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/09/13: RKT displayed some relative strength on Friday with a +1.1% gain and a new all-time high. If there is a pullback we can watch for support near $80.00 or the simple 10-dma.

FYI: The Point & Figure chart for RKT is bullish with a long-term $117 target.

- Suggested Positions -

Long Mar $80 call (RKT1316c80) entry $3.05

chart:

Entry on February 06 at $81.05
Average Daily Volume = 743 thousand
Listed on February 02, 2012


Starbucks Corp. - SBUX - close: 56.37 change: +0.51

Stop Loss: 54.75
Target(s): 59.85
Current Option Gain/Loss: - 11.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/09/13: SBUX saw a spike down midweek but has started to bounce again after filling the gap from mid January. Friday's high was $56.65. I would be tempted to buy calls on a new rise past this level (56.65).

Earlier Comments:
Our target is $59.85. More aggressive traders could aim for the all-time highs in the $62 area set last year. FYI: The Point & Figure chart for SBUX is bullish with a long-term $67 target.

- Suggested Positions -

Long Mar $55 call (SBUX1316c55) entry $2.51

chart:

Entry on February 01 at $56.57
Average Daily Volume = 6.8 million
Listed on January 30, 2012


SPX Corp. - SPW - close: 75.80 change: +0.72

Stop Loss: 73.95
Target(s): 78.00
Current Option Gain/Loss: +61.5%
Time Frame: Exit prior to earnings on Feb. 14th
New Positions: see below

Comments:
02/09/13: After more than a week of consolidating sideways on either side of the $75.00 level shares of SPW finally appear to be breaking out to new highs. We only have a few days left on this trade. SPW is scheduled to report earnings on Feb. 14th. If shares do not hit our exit target at $78.00 then we will plan on closing positions on Feb. 13th at the closing bell.

- Suggested Positions -

Long Feb $75 call (SPW1316B75) entry $1.30

02/06/13 new stop loss @ 73.95
01/30/13 new stop loss @ 73.75
01/29/13 new stop loss @ 71.95, adjust exit to $78.00
readers may want to just take profits right now
01/28/13 new stop loss @ 71.40

chart:

Entry on January 23 at $72.42
Average Daily Volume = 832 thousand
Listed on January 22, 2012


Zimmer Holdings - ZMH - close: 75.85 change: +0.79

Stop Loss: 73.40
Target(s): 79.50
Current Option Gain/Loss: +21.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/09/13: The bounce continues in shares of ZMH. The stock is now at an important test of resistance at the $76.00 level near its January high. A reversal here and it will start to look like a bearish double top pattern. A breakout could fuel some short covering. I am not suggesting new positions at this moment. Please note our new stop loss at $73.40.

Earlier Comments:
I am suggesting we keep our position size small to limit our risk. FYI: The Point & Figure chart for ZMH is bullish with a long-term $89 target.

- Suggested Positions - *small positions*

Long Mar $75 call (ZMH1316c75) entry $1.60

02/09/13 new stop loss @ 73.40

chart:

Entry on February 07 at $75.24
Average Daily Volume = 1.2 million
Listed on February 06, 2012


PUT Play Updates

SourceFire, Inc. - FIRE - close: 40.47 change: +0.48

Stop Loss: 41.55
Target(s): 35.25
Current Option Gain/Loss: Unopened
Time Frame: exit prior to earnings on Feb. 21
New Positions: Yes, see below

Comments:
02/09/13: Shares of FIRE managed an oversold bounce on Friday but the overall trend is still very bearish. We are waiting on a breakdown to new relative lows. The low today on Friday was $39.50. We have a trigger to buy puts at $39.40. We want to keep our position size small to limit our risk. We do not want to hold over the earnings report on Feb. 21st.

Trigger @ 39.40 *Small Positions*

- Suggested Positions -

buy the Mar $35 PUT (FIRE1316o35)

chart:

Entry on February -- at $---.--
Average Daily Volume = 890 thousand
Listed on February 05, 2012


Blue Nile Inc. - NILE - close: 31.57 change: +0.05

Stop Loss: 33.25
Target(s): 26.25
Current Option Gain/Loss: -10.8%
Time Frame: To be determined (see below)
New Positions: see below

Comments:
02/09/13: Our aggressive play on NILE isn't moving very fast, at least not yet. The stock did breakdown to new multi-month lows this past week. Shares certainly look weak and poised to continue the move lower. Our challenge is earnings. Normally we do not hold over a company's earnings report because there are so many variables that could send the stock gapping the opposite direction. NILE is scheduled to report earnings on Feb. 12th, after the closing bell. At the moment I am tempted to hold over the report. We have two more trading days to make that decision.

Earlier Comments:
We want to keep our position size small to limit our risk. I am concerned that the $30.00 level might be potential round-number support.

*Small Positions* - Suggested Positions -

Long Mar $30 PUT (NILE1316o30) entry $1.85

chart:

Entry on February 07 at $31.45
Average Daily Volume = 319 thousand
Listed on February 06, 2012