Editor's Note:

The profit taking continues for the second day in a row. We are seeing a lot of movement on our active trades list.

BPT, COO, WCC, ZMH, and ALXN have been stopped out.

We have removed AMCX and FDX. Neither trade had opened.

Both PNRA and VAR have been triggered.

SBAC was closed prior to earnings.


Current Portfolio:


CALL Play Updates

Cameron Intl. - CAM - close: 63.15 change: -1.13

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:
02/21/13: CAM has broken down from its $64-66 trading range. Yet traders bought the dip near $62 and its 30-dma. The $62 level was resistance back in early 2011 so it's not surprising to see this level act as support. Aggressive traders could use this midday bounce in CAM as a new bullish entry point and just put your stop loss under today's low. However, the newsletter is suggesting the readers wait and we'll re-evaluate tomorrow. Right now our suggested entry point is still at $66.25.

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: 51.01 change: -0.64

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:
02/21/13: CHKP has broken down below short-term support at the 10-dma. The stock looks headed for the $50.00 mark. If CHKP does decline much further we'll see it hit our stop loss at $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


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

Stop Loss: 89.25
Target(s): 94.75
Current Option Gain/Loss: Mar$90c: +22.3% & Apr95.5c: +27.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/21/13: KMB recovered from its morning lows and managed to show relative strength with a gain today. That may have been due to the company's press release out this morning. KMB's board of directors announced they were raising the dividend by +9.5% to 81 cents a share. The next quarterly dividend is payable on April 2nd, 2013 to shareholders of record on March 8th. According to KMB's press release, "This is the 41st consecutive year Kimberly-Clark has raised its dividend and the 79th straight year the company has paid dividends."

I am not suggesting new positions at this time.

- 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: 102.72 change: -0.43

Stop Loss: 101.85
Target(s): 104.85
Current Option Gain/Loss: +11.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/21/13: Uh-oh! Today's market wide decline has pulled MMM below its simple 10-dma for the first time in several weeks. This is technically a short-term bearish warning signal. 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: 15.22 change: +0.54

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:
02/21/13: The stock market's weakness helped push the VIX to 16.21 midday. The volatility index pared its gains by the close.

- 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


PUT Play Updates

Capital One Financial - COF - close: 52.21 change: -0.06

Stop Loss: 54.55
Target(s): 48.50
Current Option Gain/Loss: +12.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/21/13: Thursday turned out to be a quiet day for COF. Although it's a little bit concerning to see that COF did not participate with the market's decline today.

- 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: 53.87 change: +0.01

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:
02/21/13: The action in EVEP today is also a little bit worrisome. The stock spiked down at the open and hit $52.13 but quickly reversed. Shares closed almost unchanged on the session. The lack of participation in the market's decline is a bit troubling.

- 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


Panera Bread - PNRA - close: 155.15 change: +0.15

Stop Loss: 158.05
Target(s): 141.00
Current Option Gain/Loss: -15.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/21/13: Our new PNRA trade is not cooperating either. The stock tried to rally this morning but failed at technical resistance at its 200-dma. Then PNRA broke down to new lows and broke support, hitting our trigger to buy puts at $154.00. Yet by the closing bell PNRA had rebounded into positive territory.

I would wait for a new decline under $154.00 before launching new positions.

- Suggested Positions -

Long Mar $150 PUT (PNRA1316o150) entry $2.30

Entry on February 21 at $154.00
Average Daily Volume = 731 thousand
Listed on February 20, 2012


Varian Medical Sys. - VAR - close: 69.48 change: -0.42

Stop Loss: 71.00
Target(s): 66.00
Current Option Gain/Loss: -11.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/21/13: Our new trade on VAR has been triggered. Shares hit our entry point at $69.50. I would still consider new positions now at current levels. Our target is the $66.00 level. More aggressive traders could aim for $65.00 or maybe the 200-dma near $64.00.

- Suggested Positions -

Long Mar $70 PUT (VAR1316o70) entry $1.80

Entry on February 21 at $69.50
Average Daily Volume = 874 thousand
Listed on February 20, 2012


CLOSED BULLISH PLAYS

AMC Networks Inc. - AMCX - close: 58.97 change: -0.71

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

Comments:
02/21/13: AMCX is holding up relatively well. Shares are still trading inside the $58-60 trading range. Unfortunately we are running out of time. AMCX is due to report earnings on Feb. 26th. We don't like to hold over an earnings report so that doesn't give us much time left.

Our trade has not opened yet so I am removing AMCX as a candidate. We may revisit the stock after its earnings report.

Trade did not open.

02/21/13 removed from the newsletter

chart:

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


BP Prudhoe Bay Royalty Trust - BPT - close: 79.12 change: -0.25

Stop Loss: 78.45
Target(s): 87.50
Current Option Gain/Loss: -62.5%
Time Frame: Exit prior to earnings in early March
New Positions: see below

Comments:
02/21/13: Oil prices continued to weaken on Thursday. While BPT did not see as big of a move down as oil did shares still hit our stop loss at $78.45 today.

Readers may want to keep BPT on their watch list for a new close above $81.00 as a potential bullish entry point.

*Small Positions* - Suggested Positions -

Mar $80 call (BPT1316c80) entry $2.00 exit $0.75 (-62.5%)

02/21/13 stopped out
02/20/13 new stop loss @ 78.45

chart:

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


The Cooper Companies - COO - close: 103.14 change: -1.52

Stop Loss: 101.75
Target(s): 107.50
Current Option Gain/Loss: -44.4%
Time Frame: Exit prior to earnings on Mar. 7th
New Positions: see below

Comments:
02/21/13: I have been warning readers that we might see COO dip back toward the $102.00-102.50 zone. Unfortunately shares overcorrected and hit $101.57 this morning before bouncing. Our stop loss was hit at $101.75.

*Small Positions* - Suggested Positions -

Mar $105 call (COO1316c105) entry $2.70 exit $1.50* (-44.4%)

02/21/13 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.
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


FedEx Corp. - FDX - close: 104.88 change: -0.81

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

Comments:
02/21/13: FDX has broken down under its recent sideways trading range. Our trade has not opened yet so I am removing the stock as an active candidate.

Trade did not open.

02/21/13 removed from the newsletter

chart:

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


WESCO Intl. Inc. - WCC - close: 72.15 change: -2.20

Stop Loss: 73.25
Target(s): 79.75
Current Option Gain/Loss: -58.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21/13: It was another down day for WCC. The correction has hit three days in a row. Shares fell -2.9% and hit our stop loss at $73.25 in the process.

- Suggested Positions -

Mar $75 call (WCC1316c75) entry $2.40 exit $1.00 (-58.3%)

02/21/13 stopped out at $73.25

chart:

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


Zimmer Holdings - ZMH - close: 73.87 change: -1.44

Stop Loss: 74.65
Target(s): 79.50
Current Option Gain/Loss: -46.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21/13: ZMH could not escape the market's widespread declines today. Shares opened lower at $75.15 and fell to a -1.9% decline. Our stop loss was hit at $74.65.

- Suggested Positions - *small positions*

Mar $75 call (ZMH1316c75) entry $1.60 exit $0.85 (-46.8%)

02/21/13 stopped out 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


CLOSED BEARISH PLAYS

Alexion Pharma. - ALXN - close: 87.28 change: +2.82

Stop Loss: 87.55
Target(s): 80.25 and 76.00
Current Option Gain/Loss: -73.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/21/13: ALXN displayed relative strength this morning and hit our stop loss at $87.55. I could not find any news or catalyst to explain the early morning rally in ALXN. It is notable that volume was almost double the norm.

- Suggested Positions -

Mar $80 PUT (ALXN1316o80) entry $1.90 exit $0.50 (-73.6%)

02/21/13 stopped out
02/19/13 trade opened on gap down at $82.77, trigger was $84.50

chart:

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


SBA Communications - SBAC - close: 67.75 change: +0.02

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:
02/21/13: Our plan was to close positions today at the closing bell to avoid holding over earnings. The company delivered what looks like a pretty bullish report. I would expect the stock to be up tomorrow.

- Suggested Positions -

Mar $65 PUT (SBAC1316o65) entry $0.60 exit 0.50 (-16.6%)

02/21/13 planned exit
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

chart:

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