Editor's Note:

The S&P 500 just delivered its worst day of 2013 with a -1.2% decline. The stock market's widespread decline looks ugly but one day does not make a trend.

We did see three stocks, HD, MHK, and RKT, hit our stop loss.
We want to exit our SBAC trade tomorrow at the close.


Current Portfolio:


CALL Play Updates

AMC Networks Inc. - AMCX - close: 59.68 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:
02/20/13: AMCX displayed relative strength today. Shares ignored the market's widespread decline and posted a +1.1% gain. Yet the stock remains under 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: 79.37 change: -1.07

Stop Loss: 78.45
Target(s): 87.50
Current Option Gain/Loss: -42.5%
Time Frame: Exit prior to earnings in early March
New Positions: see below

Comments:
02/20/13: Oil prices were not spared from the market's sell-off today. A rally in the U.S. dollar pushed oil prices lower and BPT followed suit. Shares of BPT slipped -1.3% and look poised to test or break down below short-term support at $79.00.

I am inching our stop loss up to $78.45. More conservative traders may want to tighten yours closer to $79.00.

*Small Positions* - Suggested Positions -

Long Mar $80 call (BPT1316c80) entry $2.00

02/20/13 new stop loss @ 78.45

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


Cameron Intl. - CAM - close: 64.28 change: -1.67

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:
02/20/13: CAM has retreated from resistance near $66.00 and shares are nearing what should be support at the bottom of its recent trading range near $64.00.

We are still on the sidelines. 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: 51.65 change: -0.23

Stop Loss: 50.75
Target(s): 54.50
Current Option Gain/Loss: +10.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/20/13: This morning saw shares of CHKP spiked past resistance at $52.00. Unfortunately the rally didn't last and shares lost -0.4% by the closing bell.

I am concerned this could be a failed rally/bearish reversal sort of move. CHKP has short-term support at $51.00 so we're raising the stop loss to $50.75. I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/20/13 new stop loss @ 50.75
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: 103.14 change: -1.52

Stop Loss: 101.75
Target(s): 107.50
Current Option Gain/Loss: -22.2%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/20/13: I have recently warned readers that COO would likely dip toward the $102.00-102.50 zone. With today's decline (-1.4%) it's getting close to what should be new support near $102. If the $102 level fails then the next support level is the $100.00 mark. Currently our stop is at $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

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


FedEx Corp. - FDX - close: 105.69 change: -1.64

Stop Loss: 105.75
Target(s): 112.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/20/13: There was no follow through on yesterday's rally in FDX. Today's market wide decline did see the transportation sector participate. Shares of FDX (-1.5%) essentially kept pace with the pullback in the transportation average (-1.6%).

Technically today's pullback has created a bearish engulfing candlestick pattern. If we see FDX close under 105.50 we'll likely drop it as a candidate. Currently, I am suggesting we open small bullish positions if FDX can trade at $107.75 or higher. If triggered our target is $112.50 but there is a possibility that the $110 level will be resistance.

Trigger @ 107.75

- Suggested Positions -

buy the Mar $110 call (FDX1316c110)

Entry on February -- at $---.--
Average Daily Volume = 2.2 million
Listed on February 19, 2012


Kimberly-Clark Corp. - KMB - close: 91.74 change: -0.47

Stop Loss: 89.25
Target(s): 94.75
Current Option Gain/Loss: Mar$90c: +14.3% & Apr95.5c: +13.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/20/13: KMB was not immune to the market's decline. Yet shares only gave back about half of yesterday's gains. Look for short-term support at the 10-dma and again near the $90.00 level.

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


3M Company - MMM - close: 103.15 change: -1.03

Stop Loss: 101.85
Target(s): 104.85
Current Option Gain/Loss: +23.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/20/13: It was the worst trading day of 2013 for the S&P 500. Naturally, MMM, which hit new highs yesterday, saw some profit taking. The trend is still up. Shares should find support at the rising 10-dma. I am not suggesting new positions.

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


CBOE Volatility Index - VIX - close: 14.68 change: +2.37

Stop Loss: 11.45
Target(s): 22.00-25.00 range
Current Option Gain/Loss: -15.7%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/20/13: The stock market is finally starting to see a little profit taking. Traders may have panicked a little bit to lock in gains or protect themselves and buy puts. The VIX surged +19.2% to close on its 50-dma.

- Suggested Positions -

Long Apr $16 call (VIX1317D16) entry $1.90

Entry on February 10 at $13.37
Average Daily Volume = n/a
Listed on February 09, 2012


WESCO Intl. Inc. - WCC - close: 74.35 change: -1.22

Stop Loss: 73.25
Target(s): 79.75
Current Option Gain/Loss: -35.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/20/13: Profit taking has pulled WCC back toward short-term support. A bounce from the current level could be used as a new bullish entry point.

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: 75.31 change: -0.80

Stop Loss: 74.65
Target(s): 79.50
Current Option Gain/Loss: - 9.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/20/13: ZMH looks vulnerable here. Yesterday's low was $74.82. I am raising our stop loss to $74.65. If the stock breaks down below $75.00 I would expect ZMH to hit our new stop.

- Suggested Positions - *small positions*

Long Mar $75 call (ZMH1316c75) entry $1.60

02/20/13 new stop loss @ 74.65
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: 84.46 change: +1.07

Stop Loss: 87.55
Target(s): 80.25 and 76.00
Current Option Gain/Loss: -50.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/20/13: See our put play ALXN bounce on the worst day of 2013 is not what we want to see. Fortunately, we can explain the rebound in ALXN on an upgrade this morning. Shares struggled with round-number resistance at the $85.00 level.

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


Capital One Financial - COF - close: 52.27 change: -0.85

Stop Loss: 54.55
Target(s): 48.50
Current Option Gain/Loss: +10.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/20/13: COF continues to fall. Shares gapped open lower at $52.25 this morning. That did affect our entry point.

Earlier Comments:
Shares are arguably short-term oversold already but the trend is definitely down. I am suggesting small bearish put positions. Our target is $48.50 but watch out for potential round-number support at the $50.00 mark.

- Suggested Positions - *Small Positions*

Long Mar $52.50 PUT (COF1316o52.5) entry $1.23

Entry on February 20 at $52.25
Average Daily Volume = 5.9 million
Listed on February 19, 2012


EV Energy Partners - EVEP - close: 53.86 change: -0.18

Stop Loss: 57.25
Target(s): 50.50
Current Option Gain/Loss: - 1.3%
Time Frame: exit prior to earnings on Feb. 27
New Positions: see below

Comments:
02/20/13: EVEP gapped open higher this morning as the market reacted to positive analyst comments on EVEP. Fortunately shares reversed at new short-term resistance at the $55.00 level, not once but twice today.

- 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: 67.73 change: -0.17

Stop Loss: 69.05
Target(s): 63.50
Current Option Gain/Loss: -16.6%
Time Frame: Exit prior to earnings on Feb. 21
New Positions: see below

Comments:
02/20/13: Unfortunately SBAC did not participate in the market's sell-off today. Plus, we're almost out of time. The plan is to exit positions tomorrow at the closing bell to avoid holding over earnings tomorrow night.

Adjust the stop loss to $69.05.

- Suggested Positions -

Long Mar $65 PUT (SBAC1316o65) entry $0.60

02/20/13 new stop loss @ 69.05, prepare to exit tomorrow at the close
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

The Home Depot - HD - close: 66.44 change: -1.11

Stop Loss: 66.40
Target(s): 69.90
Current Option Gain/Loss: -56.0%
Time Frame: Exit prior to earnings on Feb. 26th
New Positions: see below

Comments:
02/20/13: The stock market's broad based decline today hit shares of HD with a -1.6% decline. The stock has broken down below short-term support at its simple 20-dma. The stock also hit our stop loss at $66.40.

- Suggested Positions -

Mar $70 call (HD1316c70) entry $0.66 exit $0.29 (-56.0%)

02/20/13 stopped out
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


Mohawk Industries - MHK - close: 103.50 change: -5.28

Stop Loss: 105.85
Target(s): 109.75
Current Option Gain/Loss: + 5.4%
Time Frame: Exit PRIOR to earnings on Feb. 21st
New Positions: see below

Comments:
02/20/13: Ouch! MHK just collapsed today. The stock has been so close to hitting our exit target the last couple of days. We were planning to exit positions today at the closing bell to avoid holding over tomorrow's earnings report. Just in case we raised our stop loss to $105.85 yesterday. Thank goodness we did raise the stop.

I couldn't find any specific news behind MHK's relative weakness although it was probably related to worries in the housing sector today. MHK underperformed the market with a -4.8% plunge.

- Suggested Positions -

Mar $105 call (MHK1316c105) entry $3.65 exit $3.85* (+5.4%)

02/20/13 stopped out at $105.85
*option exit price is an estimate since the option did not trade at the time our play was closed.
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

chart:

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


Rock-Tenn Company - RKT - close: 79.56 change: -3.12

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:
02/20/13: After showing relative strength most of the month shares of RKT suddenly broke down when the market looked weak today. It was probably a rush of traders trying to lock in profits. When RKT broke down under short-term technical support at the 10-dma it accelerated lower and fell past the $80.00 mark. Our stop loss was hit at $80.75 along the way.

- Suggested Positions -

Mar $80 call (RKT1316c80) entry $3.05 exit $1.90 (-37.7%)

02/20/13 stopped out
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