Editor's Note:

The U.S. market's major stock indices rallied to new highs on Monday. Unfortunately it seems like leadership is narrowing.

We closed our LL trade today. I am suggesting we close our MHK trade tomorrow. ALXN was triggered this morning.


Current Portfolio:


CALL Play Updates

AMC Networks Inc. - AMCX - close: 58.99 change: -0.69

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:
02/19/13: AMCX dipped to its simple 10-dma and bounced. The stock remains below resistance at the $60.00 level. 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)

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


BP Prudhoe Bay Royalty Trust - BPT - close: 80.44 change: +0.87

Stop Loss: 78.25
Target(s): 87.50
Current Option Gain/Loss: -25.0%
Time Frame: Exit prior to earnings in early March
New Positions: see below

Comments:
02/19/13: Oil prices managed a bounce today and that helped shares of BPT produce a +1.0% gain. The stock is back above the $80.00 mark. Traders may want to wait for a rally past Friday's high at $80.75 before initiating new positions.

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

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


Cameron Intl. - CAM - close: 65.95 change: +1.37

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:
02/19/13: There was no follow through on last Friday's bearish reversal at the $66 level. Shares of CAM spiked higher at the open and rallied back toward the $66.00 mark. The intraday high was $66.13. 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)

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


Check Point Software Tech. - CHKP - close: 51.88 change: +0.52

Stop Loss: 49.90
Target(s): 54.50
Current Option Gain/Loss: +21.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/19/13: Traders bought the dip in CHKP this morning near its simple 10-dma. The stock bounced back toward recent resistance at the $52.00 level. The stock looks poised to breakout higher here. 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

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


The Cooper Companies - COO - close: 104.66 change: +0.65

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:
02/19/13: COO also saw a rebound off its rising 10-dma. Shares ended the session with a +0.6% gain. I am not suggesting new positions at this time.

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

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


The Home Depot - HD - close: 67.55 change: +0.03

Stop Loss: 66.40
Target(s): 69.90
Current Option Gain/Loss: -25.7%
Time Frame: Exit prior to earnings on Feb. 26th
New Positions: see below

Comments:
02/19/13: HD underperformed the market the first half of the session but shares produced a midday bounce at its converging 10-dma and 20-dma. The stock looks poised to breakout past the $68.00 level soon.

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

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


Kimberly-Clark Corp. - KMB - close: 92.21 change: +1.01

Stop Loss: 89.25
Target(s): 94.75
Current Option Gain/Loss: Mar$90c: +30.3% & Apr95.5c: +22.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/19/13: Our new play on KMB is off to a strong start. Shares opened at $91.33 and rallied to a +1.1% gain. This is a new all-time high for KMB.

The plan was to keep our position size small to limit our risk. Our target is $94.75. More aggressive traders could aim higher.

- Suggested Positions -

Long Mar $90 call (KMB1316c90) entry $1.88

- or -

Long Apr $92.50 call (KMB1320c92.5) entry $1.10

Entry on February 18 at $91.33
Average Daily Volume = 2.2 million
Listed on February 16, 2012


Mohawk Industries - MHK - close: 108.78 change: +0.98

Stop Loss: 105.85
Target(s): 109.75
Current Option Gain/Loss: +42.4%
Time Frame: Exit PRIOR to earnings on Feb. 21st
New Positions: see below

Comments:
02/19/13: MHK spiked to a new high this morning at $109.30 before profit taking pulled it down to $106.92 intraday. Shares recovered to close up +0.9%. We are almost out of time. MHK is due to report earnings on Feb. 21st.

If MHK does not hit our exit target at $109.75 tomorrow then I am suggesting we exit positions tomorrow at the closing bell. We will raise our stop loss to $105.85.

- Suggested Positions -

Long Mar $105 call (MHK1316c105) entry $3.65

02/19/13 new stop loss @ 105.85, prepare to exit tomorrow at the closing bell if MHK doesn't hit our exit target
02/16/13 new stop loss @ 104.75

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


3M Company - MMM - close: 104.18 change: +0.95

Stop Loss: 101.85
Target(s): 104.85
Current Option Gain/Loss: +52.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/19/13: Positive analyst comments helped MMM surge past the $104 level this morning. The stock has closed at a new all-time high. I am adjusting our exit target down to $104.85. MMM is up eight weeks in a row (so far) and hasn't had any sort of significant dip or pullback. The $105 level could be round-number resistance. I am also raising our stop loss to $101.85.

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

- Suggested Positions - *Small Positions*

long Mar $100 call (MMM1316c100) entry $2.95

02/19/13 new stop loss @ 101.85, adjust exit target to $104.85
02/16/13 new stop loss @ 101.30

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


Rock-Tenn Company - RKT - close: 82.68 change: -1.01

Stop Loss: 80.75
Target(s): 84.75
Current Option Gain/Loss: +11.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/19/13: RKT hit some profit taking today with a -1.2% pullback. Look for short-term support near the 10-dma at $82.00. I am not suggesting new positions at this time.

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.

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


CBOE Volatility Index - VIX - close: 12.31 change: -0.15

Stop Loss: 11.45
Target(s): 22.00-25.00 range
Current Option Gain/Loss: -39.4%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/19/13: Another gain for the S&P 500 has pushed the VIX to another low. Shares hit new multi-year lows this afternoon near the 12.00 mark. This extreme bullishness (or lack of fear) in the market should be a significant caution signal for the market.

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

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


WESCO Intl. Inc. - WCC - close: 75.57 change: -0.59

Stop Loss: 73.25
Target(s): 79.75
Current Option Gain/Loss: -14.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/19/13: WCC ran into some profit taking today after a multi-day rally last week. Shares did rebound off their simple 10-dma but closed with a -0.7% decline. I am not suggesting new positions at this time.

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

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


Zimmer Holdings - ZMH - close: 76.11 change: +0.21

Stop Loss: 74.40
Target(s): 79.50
Current Option Gain/Loss: +21.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/19/13: Most of the medical device stocks were weak this morning. I couldn't find any headlines to explain the spike down in ZMH. Traders did buy the dip near its rising 20-dma, which was support a couple of weeks ago. ZMH ended the session with a gain. More conservative traders could adjust their stops toward today's low (74.82).

- 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

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


PUT Play Updates

Alexion Pharma. - ALXN - close: 83.39 change: -2.62

Stop Loss: 87.55
Target(s): 80.25 and 76.00
Current Option Gain/Loss: -28.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/19/13: While the trend in ALXN is down we were not expecting shares to gap open lower this morning. The stock opened at $82.77. That was below our suggested entry point at $84.50. The trade is opened. Nimble traders got a chance to buy a failed rally near the $85.00 level when ALXN produced an intraday bounce.

The Mar $80 put option opened at $1.90 and is currently trading with a bid/ask spread at $1.35/1.45.

Earlier Comments:
I am setting two targets. Our first target is $80.25. Our second, more aggressive target is $76.00.

- Suggested Positions -

Long Mar $80 PUT (ALXN1316o80) entry $1.90

02/19/13 trade opened on gap down at $82.77, trigger was $84.50

Entry on February 19 at $82.77
Average Daily Volume = 2.2 million
Listed on February 16, 2012


EV Energy Partners - EVEP - close: 54.04 change: -0.13

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:
02/19/13: EVEP dipped to new relative lows before paring its losses. Shares still underperformed the market with a -0.2% decline.

- 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


SBA Communications - SBAC - close: 67.90 change: -0.79

Stop Loss: 70.05
Target(s): 63.50
Current Option Gain/Loss: - 8.3%
Time Frame: Exit prior to earnings on Feb. 21
New Positions: see below

Comments:
02/19/13: Bingo! SBAC failed right where it was supposed on short-term technical resistance at its 10-dma. The stock underperformed the market with a -1.1% decline. Unfortunately we are almost out of time.

We will plan on closing positions on Feb. 21st at the closing bell to avoid holding over the earnings report.

- Suggested Positions -

Long Mar $65 PUT (SBAC1316o65) entry $0.60

02/19/13 prepare to exit on Feb. 21st at the closing bell

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


CLOSED BULLISH PLAYS

Lumber Liquidators - LL - close: 62.43 change: +0.24

Stop Loss: 59.45
Target(s): 64.85
Current Option Gain/Loss: -0.0%
Time Frame: Exit PRIOR to earnings on Feb. 20th
New Positions: see below

Comments:
02/19/13: LL is due to report earnings tomorrow. Our plan was to exit positions at the opening bell this morning. LL opened at $62.47 before dipping to $60.35 intraday. Thankfully the option opened a little bit higher this morning.

- Suggested Positions -

Long Mar $65 call (LL1316c65) entry $1.55 exit $1.55 (+00.0%, zero)

02/19/13 closed at the open this morning
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