Editor's Note:

The buy-the-dip rebound continues with stocks up in another widespread bounce on Wednesday.

Our CP and FFIV trades have been triggered. We are adjusting the trade on the IYT. TWC has been removed.


Current Portfolio:


CALL Play Updates

Check Point Software Tech. - CHKP - close: 52.72 change: +0.68

Stop Loss: 50.75
Target(s): 54.50
Current Option Gain/Loss: +52.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/27/13: The stock market's widespread rally on Wednesday helped lift CHKP to a new multi-month high. Readers may want to start inching up their stop loss again. I am not suggesting new positions at this time.

*Small Positions* - Suggested Positions -

Long Mar $50 call (CHKP1316c50) entry $1.90

02/25/13 market looks weak, readers may want to exit now
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


Canadian Pacific Railway - CP - close: 121.70 change: +3.95

Stop Loss: 116.60
Target(s): 124.75
Current Option Gain/Loss: +12.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/27/13: The transportation sector rallied sharply today and CP helped lead the charge with a +3.3% gain and a bullish breakout to new highs past resistance near $120.00. Our trigger to buy calls was hit at $120.25.

Earlier Comments:
FYI: On Friday, Feb. 22nd, CP announced a quarterly dividend of 35 cents (Canadian$) payable on April 29, 2013 to shareholders of record on March 28th.

- Suggested Positions -

Long Mar $120 call (MAR1316c120) entry $2.75

Entry on February 27 at $120.25
Average Daily Volume = 795 thousand
Listed on February 23, 2012


McDonald's - MCD - close: 95.73 change: +0.28

Stop Loss: 93.25
Target(s): 99.75
Current Option Gain/Loss: +40.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/27/13: Shares of MCD began trading ex-dividend this morning for its quarterly dividend (of 77 cents). The stock slowly rallied higher off its morning lows.

FYI: The Point & Figure chart for MCD is bullish with a $115 target.

- Suggested *Small* Positions -

Long Apr $95 call (MCD1320d95) entry $1.66

Entry on February 25 at $95.38
Average Daily Volume = 4.9 million
Listed on February 23, 2012


CBOE Volatility Index - VIX - close: 14.73 change: -2.14

Stop Loss: 11.45
Target(s): 19.90
Current Option Gain/Loss: - 7.8%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
02/27/13: The VIX is down over two points for the second day in a row and it still hasn't not erased Monday's gain. If the stock market continues to climb we could definitely see the VIX retreat toward its recent lows. I am not suggesting new positions at this time.

- Suggested Positions -

Long Apr $16 call (VIX1317D16) entry $1.90

02/25/13 adjust exit target to 19.90

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: 51.59 change: +0.12

Stop Loss: 54.55
Target(s): 48.50
Current Option Gain/Loss: +28.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/27/13: COF did produce a bounce today but shares definitely underperformed the broader market and the financial sector. Look for short-term resistance at the descending 10-dma (currently 52.85). That's if COF can break out past what should be resistance at $52.00 now. I am not suggesting new positions at this time.

- Suggested Positions - *Small Positions*

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

02/23/13 be careful here. COF is holding support at the $52 level. Shares could be poised to bounce.

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


F5 Networks - FFIV - close: 93.04 change: -1.60

Stop Loss: 96.75
Target(s): 86.50
Current Option Gain/Loss: + 5.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/27/13: Our new trade on FFIV has been triggered. The stock underperformed the market with a -1.69% decline and a new relative low. Our trigger to buy puts was hit at $93.50.

Earlier Comments:
It's possible the $90.00 level could act as round-number, psychological support but we are going to aim for the $86.50 level.

- Suggested Positions -

Long Mar $95 PUT (FFIV1316o95) entry $2.10

Entry on February 27 at $93.50
Average Daily Volume = 1.4 million
Listed on February 26, 2012


Fossil, Inc. - FOSL - close: 101.99 change: +1.68

Stop Loss: 103.30
Target(s): 93.25
Current Option Gain/Loss: -53.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/27/13: Our FOSL put play is not looking so great. Shares have bounced two days in a row. Today FOSL's rally stalled right at the $103.00 level where the 10-dma and 40-dma are converging. If there is any follow through higher we'll likely see FOSL hit our stop loss at $103.30. I am not suggesting new positions at this moment.

- Suggested Positions -

Long Mar $95 PUT (FOSL1316o95) entry $1.60

Entry on February 26 at $ 99.21
Average Daily Volume = 1.1 million
Listed on February 25, 2012


iShares Dow Jones Transports - IYT - close: 103.59 change: +0.20

Stop Loss: 108.25
Target(s): 100.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27/13: Wow! You have to give the bulls credit for an impressive display in the transports today. The Dow Jones Transportation Average surged +2.9% and came close to hitting its recent all-time high set last week. In spite of this strength there is still a decent chance that the sector corrects lower.

We are modifying our entry point strategy and taking a much more aggressive trade. I am suggesting small bearish put positions now at the open tomorrow. The all-time intraday high on the IYT is 107.16. More conservative traders may want to put their stop loss about $107.25. I am suggesting a stop loss at $108.25. That's about 1% above the all-time high. We'll adjust our exit target to $100.25. I am also adjusting our strike price to the April $105 puts.

Launch Small Positions Now!

- Suggested Positions -

buy the Apr $105 PUT (IYT1320p105) current ask $2.20

Annotated Chart:

Entry on February -- at $---.--
Average Daily Volume = 610 thousand
Listed on February 26, 2012


Monsanto Company - MON - close: 100.40 change: +1.20

Stop Loss: 100.65
Target(s): 92.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
02/27/13: MON continued to bounce for the second day in a row. Yet the stock still seems to be struggling with resistance at its 40-dma. There is no change from my prior comments.

Last week's low was $97.90. I am suggesting a trigger to buy puts at $97.80. If triggered our target is $92.50.

Trigger @ 97.80

- Suggested Positions -

buy the Mar $95 PUT (MON1316o95)

Entry on February -- at $---.--
Average Daily Volume = 2.5 million
Listed on February 25, 2012


CLOSED BEARISH PLAYS

Time Warner Cable Inc. - TWC - close: 88.02 change: +1.56

Stop Loss: 86.30
Target(s): 80.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/27/13: TWC is not cooperating. Shares are breaking out past the bearish trend of lower highs. Our trade has not opened yet so we're dropping TWC as an active candidate.

Trade did not open.

02/27/13 removed from the newsletter

chart:

Entry on February -- at $---.--
Average Daily Volume = 3.6 million
Listed on February 21, 2012