Editor's Note:

The U.S. market erupted higher on Friday following a better than expected jobs report number.

LTD was triggered. SPY was stopped out.
We have removed HITT and VMW as candidates.


Current Portfolio:


CALL Play Updates

L Brands, Inc. - LTD - close: 51.17 change: +0.82

Stop Loss: 49.40
Target(s): 54.50
Current Option Gain/Loss: + 1.7%
Time Frame: Exit PRIOR to earnings in mid-May
New Positions: see below

Comments:
05/04/13: The stock market's rally on Friday pushed LTD past some short-term resistance. Shares gapped open higher at $50.73. Our trigger to buy calls was hit at $50.85 early Friday morning. If you missed the entry point I would still consider new positions now. Keep in mind we only have a couple of weeks, maybe less, before we need to exit prior to LTD's earnings report.

- Suggested Positions -

Long Jun $50 call (LTD1322F50) entry $2.26

chart:

Entry on May 03 at $50.85
Average Daily Volume = 2.7 million
Listed on April 27 2013


Ross Stores - ROST - close: 65.70 change: +1.04

Stop Loss: 64.15
Target(s): 69.00
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to earnings in late May
New Positions: see below

Comments:
05/04/13: ROST rebounded from a test of its 10-dma and is once again testing short-term resistance near $66.00. The low for the week was $64.24. I am inching our stop loss up to $64.15. I am not suggesting new positions.

- Suggested Positions -

Long Jun $67.50 call (ROST1322F67.5) entry $1.55

05/04/13 new stop loss @ 64.15
05/01/13 new stop loss @ 63.90

chart:

Entry on April 26 at $65.25
Average Daily Volume = 2.3 million
Listed on April 25 2013


PUT Play Updates

Agrium Inc. - AGU - close: 90.01 change: +0.46

Stop Loss: 92.05
Target(s): 85.25
Current Option Gain/Loss: -10.2%
Time Frame: Exit prior to earnings on May 9th
New Positions: see below

Comments:
05/04/13: We only have a couple of days left for our AGU trade. The company is scheduled to report earnings on May 9th. I am suggesting that we plan on closing positions on May 7th at the closing bell (Tuesday).

We wanted to keep our position size small to limit our risk.

Trigger @ 89.75 *Small Positions*

- Suggested Positions -

buy the May $90 PUT (AGU1318Q90) entry $2.45

05/04/13 prepare to exit on May 7th at the closing bell

chart:

Entry on May 01 at $89.75
Average Daily Volume = 1.5 million
Listed on April 23 2013


Amgen Inc. - AMGN - close: 106.48 change: +0.89

Stop Loss: 106.75
Target(s): 96.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
05/04/13: Biotech stocks continued to rally on Friday and that lifted shares of AMGN. The IBB biotech ETF hit new highs. Yet the rally in AMGN stalled at short-term resistance near its 10-dma and 20-dma. If the stock can build on this bounce then we'll likely drop it as a candidate. For now we're still waiting for a breakdown.

Tuesday's low was $103.85. More aggressive traders could buy puts now but I am suggesting a trigger to buy puts at $103.65. If triggered our target is $96.00. However, more conservative traders may want to exit near $100 since it's possible the $100 level could prove to be round-number support.

Trigger @ 103.65

- Suggested Positions -

buy the Jun $100 PUT (AMGN1322R100)

chart:

Entry on May -- at $---.--
Average Daily Volume = 1.4 million
Listed on April 30 2013


Domtar Corp. - UFS - close: 68.77 change: +1.29

Stop Loss: 70.05
Target(s): 62.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/04/13: UFS was not immune to the market's bullish sentiment on Friday. Shares rebounded with a +1.9% gain. We're not giving up yet. UFS still looks poised for another leg lower.

Shares found support this week near $67.00. I am suggesting a trigger to buy puts at $66.75. If triggered our target is $62.50.

Trigger @ 66.75

- Suggested Positions -

buy the Jun $65 PUT (UFS1322R65)

chart:

Entry on May -- at $---.--
Average Daily Volume = 448 thousand
Listed on May 02 2013


Vertex Pharma. - VRTX - close: 75.99 change: -1.73

Stop Loss: 80.50
Target(s): 66.00
Current Option Gain/Loss: +27.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/04/13: Friday produced a volatile morning for VRTX. The stock initially gapped down but there was no follow through. Shares immediately spiked higher but the rally reversed at resistance near the 10-dma (near 79.40). The stock spent the rest of the day slowly fading lower. VRTX underperformed the market with a -2.2% decline.

Earlier Comments:
The old 2012 highs were near $65.00. This could be new support. We will aim for $66.00.

- Suggested Positions -

Long Jun $75 PUT (VRTX1322R75) entry $3.60

chart:

Entry on May 02 at $76.30
Average Daily Volume = 3.8 million
Listed on May 01 2013



Longer-Term Play Updates



Chicago Bridge & Iron Co. - CBI - close: 55.22 change: +1.59

Stop Loss: 49.25
Target(s): 62.50
Current Option Gain/Loss: July's: +31.8% or Jan's: +17.2%
Time Frame: 3 to 4 months
New Positions: see below

Comments:
05/04/13: The combination of CBI's better than expected earnings results, a bullish market, and some positive analyst comments helped shares outperform with a +2.9% gain. The stock broke through resistance near $54.00. Shares briefly traded above resistance near $56 and its 50-dma but pared its gains by the closing bell.

I am not suggesting new positions at this time.

Please review our original play description on this page here.

- Suggested Positions -

Long 2013 Jul $55 call (CBI1320G55) Entry $2.20*

- or -

Long 2014 Jan $60 call (CBI1418A60) Entry $2.90*

*option entry price is an estimate since the option did not trade at the time our play opened.

chart:

Entry on April 22 at $51.53
Average Daily Volume = 2.5 million
Listed on April 20 2013


CLOSED BEARISH PLAYS

Hittite Microwave Corp. - HITT - close: 56.63 change: +1.76

Stop Loss: 55.75
Target(s): 50.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/04/13: The stock market's surge on Friday produced a big bounce in shares of HITT. Shares outperformed with a +3.2% gain. It's unlikely that HITT is going to tag our entry trigger at $54.00 soon so we're dropping HITT as a bearish candidate.

Trade did not open.

05/04/13 removed from the newsletter

chart:

Entry on May -- at $---.--
Average Daily Volume = 164 thousand
Listed on May 01 2013


S&P500 ETF - SPY - close: 161.37 change: +1.62

Stop Loss: 160.50
Target(s): 150.25
Current Option Gain/Loss: -42.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/04/13: Market reaction to the jobs report on Friday was decisive. The SPY gapped open higher at $161.14. That was above our stop loss at $160.50 and immediately closed our trade. The breakout past $160.00 is bullish.

- Suggested Positions -

Jun $155 PUT (SPY1322R155) entry $2.15 exit $1.24 (-42.3%)

05/03/13 stopped out on gap open at $161.14
05/01/13 trigger @ 158.50
04/30/13 adjust entry trigger to $158.50
replaced the May put with a June put as the suggested option.
04/29/13 adjust entry trigger to $157.50
04/23/13 adjust strategy: new trigger @ $157.00,
new stop loss @ 160.50, new target @ 150.25
adjust option strike to 2013 May $155 put

chart:

Entry on May 01 at $158.50
Average Daily Volume = 130 million
Listed on April 18 2013


VMware, Inc. - VMW - close: 74.50 change: +3.10

Stop Loss: 72.85
Target(s): 62.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/04/13: It looks like some shorts panicked on Friday because shares of VMW surged +4.3%. There is still likely resistance near the $75.00 mark but we're removing VMW as a candidate. Our entry trigger was $69.75 but our trade has not opened yet.

Trade did not open.

05/04/13 removed from the newsletter

chart:

Entry on April -- at $---.--
Average Daily Volume = 2.5 million
Listed on April 27 2013