Editor's Note:

Stocks delivered a relatively quiet session on Monday with most of the market drifting sideways.

Our EVEP trade has been triggered.


Current Portfolio:


CALL Play Updates

BP Prudhoe Bay Royalty Trust - BPT - close: 79.14 change: -0.14

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:
02/11/13: BPT spent another day churning sideways beneath resistance at the $80.00 level. There is no change from my prior comments.

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)

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


Check Point Software Tech. - CHKP - close: 51.07 change: -0.59

Stop Loss: 49.40
Target(s): 54.50
Current Option Gain/Loss: + 5.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/11/13: Monday was a quiet session for CHKP. The stock drifted lower inside the $51-52 zone. 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

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


The Cooper Companies - COO - close: 104.05 change: -0.21

Stop Loss: 99.90
Target(s): 107.50
Current Option Gain/Loss: + 1.8%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/11/13: COO spent Monday's session hugging the $104.00 level. If the market pulls lower we could see COO retesting the $103 or $102 levels.

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

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


Dresser-Rand Group - DRC - close: 60.55 change: -0.42

Stop Loss: 59.75
Target(s): 64.90
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings on Feb. 28
New Positions: Yes, see below

Comments:
02/11/13: DRC spent today churning sideways under short-term resistance at the $61.00 level.

I am suggesting a trigger to buy calls at $61.25. If triggered we will aim for $64.90 but we'll plan on exiting prior to the late February (still unconfirmed) earnings report.

Trigger @ 61.25

- Suggested Positions -

buy the Mar $65 call (DRC1316c65)

Entry on February -- at $---.--
Average Daily Volume = 450 thousand
Listed on February 09, 2012


3M Company - MMM - close: 102.62 change: -0.04

Stop Loss: 100.70
Target(s): 106.50
Current Option Gain/Loss: + 1.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/11/13: Traders bought the dip in MMM this morning near $102.00. The stock bounced back to close almost unchanged on the session.

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

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: - 1.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/11/13: RKT also saw an early morning dip but shares recovered. The stock spent the rest of the day hovering just below the $82.00 level.

Earlier Comments:
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

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


Starbucks Corp. - SBUX - close: 56.14 change: -0.23

Stop Loss: 54.75
Target(s): 59.85
Current Option Gain/Loss: - 20.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/11/13: SBUX underperformed on Monday with a -0.4% decline versus a -0.06% drop on the S&P 500 and a -0.05% slip in the NASDAQ. I would still wait for a new rise past $56.65 before considering new positions .

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

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


SPX Corp. - SPW - close: 75.84 change: +0.04

Stop Loss: 73.95
Target(s): 78.00
Current Option Gain/Loss: +65.3%
Time Frame: Exit prior to earnings on Feb. 14th
New Positions: see below

Comments:
02/11/13: Today's afternoon rebound kept the rally alive in shares of SPW. Our trade is almost over. We're planning to exit on Wednesday, Feb. 13th at the closing bell if SPW doesn't hit our exit target first. More conservative traders may want to take profits now.

- 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

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


CBOE Volatility Index - VIX - close: 12.94 change: -0.08

Stop Loss: 11.45
Target(s): 22.00-25.00 range
Current Option Gain/Loss: -10.5%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/11/13: The VIX gapped open higher at the open thanks to weakness in equities. The gains faded and shares dipped back toward the 13.00 level. I would still consider new positions now at current levels.

- Suggested Positions -

Long Apr $16 call (VIX1317D16) entry $1.90

Entry on February -- at $---.--
Average Daily Volume = n/a
Listed on February 09, 2012


Zimmer Holdings - ZMH - close: 75.65 change: -0.20

Stop Loss: 73.40
Target(s): 79.50
Current Option Gain/Loss: + 9.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/11/13: ZMH turned in a quiet session with a minor 20-cent pullback. There is no change from my weekend comments.

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

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


PUT Play Updates

EV Energy Partners - EVEP - close: 54.84 change: -1.28

Stop Loss: 57.25
Target(s): 50.50
Current Option Gain/Loss: - 9.5%
Time Frame: exit prior to earnings on Feb. 27
New Positions: see below

Comments:
02/11/13: Our brand new trade on EVEP has been triggered. The weakness continued and shares broke down to a new relative low. The stock also broke down through support at the $55.00 level. Our trigger to buy puts was hit at $54.75.

- Suggested Positions -

Long Mar $55 put (EVEP1316o55) entry $3.65

Entry on February 11 at $54.75
Average Daily Volume = 300 thousand
Listed on February 09, 2012


SourceFire, Inc. - FIRE - close: 40.11 change: -0.36

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:
02/11/13: FIRE drifted lower on Monday and underperformed the market with a -0.88% decline. Yet we're still waiting for a breakdown below support.

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)

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


Blue Nile Inc. - NILE - close: 31.13 change: -0.44

Stop Loss: 33.05
Target(s): 27.00
Current Option Gain/Loss: + 2.7%
Time Frame: To be determined (see below)
New Positions: see below

Comments:
02/11/13: This is it. It's decision time for our NILE trade. The company is scheduled to report earnings tomorrow, Feb. 12th, after the closing bell. Analysts are expecting a profit of 47 cents a share. Do we hold over the earnings announcement or not.

Normally the newsletter does not hold over a report because there are too many variables that could send the stock spiking the opposite direction. More conservative traders will want to seriously consider an early exit tomorrow morning or tomorrow at the closing bell.

We are going to take a risk and hold over the announcement. However, I am also adjusting our stop loss down to $33.05 and adjusting our exit target up to $27.00.

Earlier Comments:
We want to keep our position size small to limit our risk.

*Small Positions* - Suggested Positions -

Long Mar $30 PUT (NILE1316o30) entry $1.85

02/11/13 more conservative traders will want to exit prior to the earnings announcement tomorrow after the closing bell. We have decided to hold the position over the report. Please note our new stop loss at $33.05 and our target at $27.00.

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