Editor's Note:

The stock market's upward momentum seems to be slowing down yet the S&P 500 posted its seventh weekly gain in a row.

We are growing more cautious on the market and have adjusted several stop losses tonight.

I am suggesting we exit our LL trade at the open on Tuesday morning.
Our NILE trade was stopped out on Friday.


Current Portfolio:


CALL Play Updates

AMC Networks Inc. - AMCX - close: 59.68 change: +0.24

Stop Loss: 57.90
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: Exit prior to earnings on Feb. 26th
New Positions: Yes, see below

Comments:
02/16/13: AMCX spent Friday's session consolidating sideways below resistance at the $60.00 level. We are still waiting for a bullish breakout higher. I am suggesting a trigger to buy calls at $60.25. More conservative traders may want to wait for a rally past $61.00 before initiating positions because twice in January AMCX found resistance near the $61.00 level.

Please note this is a short-term trade. We do not want to hold over the company's earnings report on Feb. 26th. FYI: The Point & Figure chart for AMCX is bullish with an $86 target.

Trigger @ 60.25

- Suggested Positions -

buy the Mar $60 call (AMCX1316c60)

chart:

Entry on February -- at $---.--
Average Daily Volume = 486 thousand
Listed on February 13, 2012


BP Prudhoe Bay Royalty Trust - BPT - close: 79.57 change: -1.11

Stop Loss: 78.25
Target(s): 87.50
Current Option Gain/Loss: -30.0%
Time Frame: Exit prior to earnings in early March
New Positions: see below

Comments:
02/16/13: Shares of BPT saw some profit taking on Friday, likely due to the weakness in crude oil prices Friday morning. The lack of follow through on BPT's recent breakout above resistance at $80.00 is a potential warning sign for traders. I am not suggesting new positions at this time. Friday's low was $78.96. More conservative investors might want to tighten their stop loss.

FYI: The Point & Figure chart for BPT is bullish with a $110 target.

*Small Positions* - Suggested Positions -

Long Mar $80 call (BPT1316c80) entry $2.00

chart:

Entry on February 13 at $80.25
Average Daily Volume = 131 thousand
Listed on February 07, 2012


Cameron Intl. - CAM - close: 64.58 change: -0.91

Stop Loss: 64.75
Target(s): 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/16/13: CAM reversed on Friday. Shares pulled back from resistance at $66.00 but the stock remains inside its recent sideways trading range. We're not giving up yet. I am suggesting a trigger to buy calls at $66.25. If triggered our short-term target is $69.75. More aggressive traders could definitely aim higher.

Trigger @ 66.25

- Suggested Positions -

buy the MAR $65 call (CAM1316c65)

chart:

Entry on February -- at $---.--
Average Daily Volume = 3.0 million
Listed on February 14, 2012


Check Point Software Tech. - CHKP - close: 51.36 change: +0.09

Stop Loss: 49.90
Target(s): 54.50
Current Option Gain/Loss: + 5.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/16/13: I am suggesting caution here. The rally in CHKP stalled at resistance near $52.00. The stock is currently sitting on short-term technical support at the 10-dma. Yet I suspect this level will fail and we will see CHKP dip back toward the next level of support near $50.00. More conservative traders may want to abandon ship now and consider launching new positions on the next bounce off the $50.00 mark. I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/16/13 CHKP looks poised to dip back toward support at $50.00
02/13/13 new stop loss @ 49.90
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: 104.01 change: +0.22

Stop Loss: 101.75
Target(s): 107.50
Current Option Gain/Loss: - 3.7%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/16/13: Aside from the spike higher on Wednesday morning shares of COO spent most of the week inside the $103.50-104.50 zone. I suspect we could see COO dip back toward the $102.50-102.00 zone. I am raising our stop loss up to $101.75.

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

02/16/13 new stop loss @ 101.75

chart:

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


The Home Depot - HD - close: 67.52 change: +0.18

Stop Loss: 66.40
Target(s): 69.90
Current Option Gain/Loss: -16.6%
Time Frame: Exit prior to earnings on Feb. 26th
New Positions: see below

Comments:
02/16/13: Shares of HD saw a little bit of volatility on Friday. The stock was challenging resistance at the $68.00 level then around 2:00 p.m. HD spiked sharply lower. Traders did buy the dip near technical support at its 10 and 20-dma but I couldn't find any news to explain the sudden weakness.

I am raising our stop loss up to $66.40.

Earlier Comments:
We plan to exit prior to the company's earnings report on Feb. 26th.

- Suggested Positions -

Long Mar $70 call (HD1316c70) entry $0.66

02/16/13 new stop loss @ 66.40

chart:

Entry on February 13 at $67.52
Average Daily Volume = 5.9 million
Listed on February 12, 2012


Lumber Liquidators - LL - close: 62.19 change: -1.77

Stop Loss: 59.45
Target(s): 64.85
Current Option Gain/Loss: - 3.2%
Time Frame: Exit PRIOR to earnings on Feb. 20th
New Positions: see below

Comments:
02/16/13: Ouch! LL erased about two days of gains with Friday's -2.7% reversal lower. We set our target at $64.85 because I expected potential resistance at $65.00. Friday's high was $64.64 and the move does look like a bearish reversal under the $65.00 level. Furthermore Friday's session has also created a bearish engulfing candlestick reversal pattern. We only have two days left on this trade.

If we had more time I would leave the stop loss below the $60.00 level, which should be support. Unfortunately we want to exit prior to the company's earnings report on Feb. 20th. Therefore, I am suggesting we exit immediately on Tuesday morning (the market is closed on Monday). More nimble traders could try and ride out Tuesday's session instead. Currently the bid on our option is at $1.50.

- Suggested Positions -

Long Mar $65 call (LL1316c65) entry $1.55

02/16/13 prepare to exit on Tuesday morning
02/14/13 adjust exit down to $64.85
02/13/13 new stop loss @ 59.45

chart:

Entry on February 12 at $61.36
Average Daily Volume = 568 thousand
Listed on February 11, 2012


Mohawk Industries - MHK - close: 107.80 change: +0.75

Stop Loss: 104.75
Target(s): 109.75
Current Option Gain/Loss: +28.7%
Time Frame: Exit PRIOR to earnings on Feb. 21st
New Positions: see below

Comments:
02/16/13: MHK continues to show relative strength. Keep in mind that we only have a few days left for this trade. MHK reports earnings on the 21st and we do not want to hold over the announcement. I am raising our stop loss to $104.75.

- Suggested Positions -

Long Mar $105 call (MHK1316c105) entry $3.65

02/16/13 new stop loss @ 104.75

chart:

Entry on February 12 at $105.35
Average Daily Volume = 588 thousand
Listed on February 11, 2012


3M Company - MMM - close: 103.23 change: +0.45

Stop Loss: 101.30
Target(s): 106.50
Current Option Gain/Loss: +23.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/16/13: MMM continues to rally, now up seven weeks in a row. Traders bought the dip at technical support on its 10-dma Thursday. I am inching up our stop loss to $101.30 so it's just below the simple 20-dma. I am not suggesting new positions at this time.

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

02/16/13 new stop loss @ 101.30

chart:

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


Rock-Tenn Company - RKT - close: 83.69 change: +0.75

Stop Loss: 80.75
Target(s): 84.75
Current Option Gain/Loss: +37.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/16/13: The rally in RKT continues with another gain and another new all-time high on Friday. I am adjusting our exit target down just a bit to $84.75. We will raise our stop loss to $80.75.

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

02/16/13 new stop loss @ 80.75, adjust target to $84.75.

chart:

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


CBOE Volatility Index - VIX - close: 12.46 change: -0.20

Stop Loss: 11.45
Target(s): 22.00-25.00 range
Current Option Gain/Loss: -21.0%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/16/13: The stock market's slow melt up higher is still pushing the volatility index lower. Any veteran trader will tell you that the market will correct eventually. It's only a matter of time. Right now bullish sentiment and complacency are reaching extremes, hence the multi-year low on the VIX.

I would still buy calls on the VIX now at current levels or you could choose a different entry point like waiting for the S&P 500 to close under its simple 10-dma as your signal.

- Suggested Positions -

Long Apr $16 call (VIX1317D16) entry $1.90

chart:

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


WESCO Intl. Inc. - WCC - close: 76.16 change: +0.24

Stop Loss: 73.25
Target(s): 79.75
Current Option Gain/Loss: + 6.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/16/13: WCC pushed to a new multi-year high on Friday. The trend is up and shares could see a short squeeze. The next level of resistance should be the $80 mark.

Earlier Comments:
The breakout past resistance could also spark some short covering. The most recent data listed short interest at 20% of the 41 million-share float.

- Suggested Positions -

Long Mar $75 call (WCC1316c75) entry $2.40

chart:

Entry on February 14 at $75.06
Average Daily Volume = 918 thousand
Listed on February 13, 2012


Zimmer Holdings - ZMH - close: 75.90 change: -0.44

Stop Loss: 74.40
Target(s): 79.50
Current Option Gain/Loss: + 9.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/16/13: This past week saw ZMH breakout past resistance at $76.00 and hit new multi-year highs. Yet profit taking on Friday morning pulled the stock back to $75.35 before paring its losses. I am not suggesting new positions. We will raise our stop loss to $74.40.

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

02/16/13 new stop loss @ 74.40
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

EV Energy Partners - EVEP - close: 54.17 change: -1.01

Stop Loss: 57.25
Target(s): 50.50
Current Option Gain/Loss: - 4.1%
Time Frame: exit prior to earnings on Feb. 27
New Positions: see below

Comments:
02/16/13: The relative weakness in EVEP continues. The stock underperformed the market on Friday with a -1.8% decline and fell to a new multi-month low. Readers could use Friday's move as a new bearish entry point.

- Suggested Positions -

Long Mar $55 put (EVEP1316o55) entry $3.65

chart:

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


SBA Communications - SBAC - close: 68.69 change: +0.58

Stop Loss: 70.05
Target(s): 63.50
Current Option Gain/Loss: -41.6%
Time Frame: Exit prior to earnings on Feb. 21
New Positions: see below

Comments:
02/16/13: The oversold bounce in SBAC continued on Friday with a second day of gains. Yet the rebound stalled right where it should have at technical resistance on the simple 10-dma. More conservative traders may want to lower their stops toward Friday's high (69.21). I would still consider new bearish positions right here at current levels. Keep in mind we only have a few days left.

Earlier Comments:
Our target is $63.50 although more conservative traders may want to exit near $65.00. Bear in mind that we will exit before the company's earnings report on Feb. 21st if SBAC has not hit our exit by then.

- Suggested Positions -

Long Mar $65 PUT (SBAC1316o65) entry $0.60

chart:

Entry on February 13 at $68.21
Average Daily Volume = 131 thousand
Listed on February 12, 2012


CLOSED BEARISH PLAYS

Blue Nile Inc. - NILE - close: 31.94 change: +0.63

Stop Loss: 32.15
Target(s): 27.00
Current Option Gain/Loss: -72.9%
Time Frame: To be determined (see below)
New Positions: see below

Comments:
02/16/13: The oversold bounce, post-earnings rebound in shares of NILE continued on Friday. The stock broke through what should have been resistance in the $32.00 area and hit our stop loss at $32.15.

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

*Small Positions* - Suggested Positions -

Mar $30 PUT (NILE1316o30) entry $1.85 exit $0.50 (-72.9%)

02/15/13 stopped out
02/13/13 new stop loss @ 32.15
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.

chart:

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