Editor's Note:

There has been no "sell in May" effect for the stock market yet. Instead the S&P 500 is up three weeks in a row and hitting new record highs.

We want to exit our LL trade on Monday morning.

AMGN has been removed.
Both ULTA and VRTX were stopped out on Friday.


Current Portfolio:


CALL Play Updates

The Boeing Co. - BA - close: 94.24 change: -0.37

Stop Loss: 92.40
Target(s): 99.00
Current Option Gain/Loss: + 4.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/11/13: It would appear that the rally in BA has stalled a bit. The stock spent the entire week churning inside the $94-95 zone. Technical momentum oscillators are starting to look top heavy. More conservative traders may want to ratchet up their stop loss. I am not suggesting new positions at this time.

- Suggested Positions -

Long Jun $95 call (BA1322F95) entry $2.02

chart:

Entry on May 06 at $94.25
Average Daily Volume = 4.9 million
Listed on May 04 2013


HanesBrands Inc. - HBI - close: 50.53 change: +0.57

Stop Loss: 48.75
Target(s): 54.75
Current Option Gain/Loss: -17.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/11/13: As expected shares of HBI bounced from short-term support near $50.00 and its simple 10-dma. Readers can use Friday's bounce as a new bullish entry point to buy alls. More conservative traders could tighten their stop loss.

NOTE: HBI is scheduled to begin trading ex-dividend on May 16th. The quarterly cash dividend should be 20 cents.

- Suggested Positions -

Long Jun $50 call (HBI1322F50) entry $2.00

chart:

Entry on May 08 at $50.72
Average Daily Volume = 1.4 million
Listed on May 07 2013


Lumber Liquidators - LL - close: 88.96 change: +3.76

Stop Loss: 79.45
Target(s): 89.50
Current Option Gain/Loss: +56.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/11/13: LL came so close to hitting our target. Shares outperformed the market on Friday with a +4.4% gain. The intraday high was $89.34. Our bullish exit target has been $89.50. I am suggesting we go ahead and exit immediately on Monday morning at the opening bell.

Earlier Comments:
LLL had a lot of short interest prior to the company's earnings report and the good news sparked a short squeeze. The most recent data listed short interest at 27% of the small 26.2 million share float but that number may be out of date. If triggered our short-term target is $89.50. I would keep our position size small to limit our risk.

*Small Positions* - Suggested Positions -

Long Jun $85 call (LL1322F85) entry $4.10

05/11/13 prepare to exit on Monday morning (May 13th) to lock in gains
05/07/13 triggered on gap open higher

chart:

Entry on May 07 at $84.35
Average Daily Volume = 761 thousand
Listed on May 06 2013


L Brands, Inc. - LTD - close: 51.64 change: -0.44

Stop Loss: 50.40
Target(s): 54.50
Current Option Gain/Loss: + 8.4%
Time Frame: Exit PRIOR to earnings on May 22nd
New Positions: see below

Comments:
05/11/13: Profit taking in shares of LTD continued on Friday after the stock was downgraded Friday morning. Shares gapped open lower at $51.49 and slipped below short-term technical support at its 10-dma before paring its losses by the closing bell.

Aggressive traders could use Friday's intraday bounce as a new entry point to buy calls. More conservative traders may want to adjust their stop to Friday's low (50.82).

Keep in mind we that we want to exit prior to LTD's earnings report on May 22nd.

- Suggested Positions -

Long Jun $50 call (LTD1322F50) entry $2.26

05/11/13 we want to exit prior to earnings on May 22nd.
05/07/13 new stop loss $ 50.40

chart:

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


Ross Stores - ROST - close: 65.85 change: +0.12

Stop Loss: 64.95
Target(s): 69.00
Current Option Gain/Loss: - 6.4%
Time Frame: exit prior to earnings in late May
New Positions: see below

Comments:
05/11/13: ROST's performance these last few days has been disappointing. Some of the technical momentum indicators are starting to look bearish. Friday's low was $65.21. I am raising our stop loss to $64.95. More conservative traders may want to consider an early exit instead. I am not suggesting new positions.

- Suggested Positions -

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

05/11/13 new stop loss @ 64.95
05/09/13 new stop loss @ 64.70
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


WellPoint Inc. - WLP - close: 75.89 change: +0.50

Stop Loss: 73.35
Target(s): 79.75
Current Option Gain/Loss: +16.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/11/13: The healthcare sector continued to show relative strength on Friday and WLP was no exception. The stock is up four days in a row. Readers may want to wait for WLP to dip back toward $75.00 before considering new bullish positions.

- Suggested Positions -

Long Jun $75 call (WLP1322F75) entry $1.91

chart:

Entry on May 08 at $75.25
Average Daily Volume = 2.0 million
Listed on May 07 2013


PUT Play Updates

Allergan Inc. - AGN - close: 104.18 change: +1.03

Stop Loss: 105.30
Target(s): 98.50
Current Option Gain/Loss: -24.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/11/13: Positive analyst comments helped AGN rebound on Friday. Shares gained +0.99%. The $105 level remains overhead resistance. Readers could watch for another failed rally near $105 as a new bearish entry point to buy puts.

Earlier Comments:
There is potential support at $100.00, at the 200-dma near $97.85, and at the May 1st low of $96.77. I am suggesting we aim for $98.50.

- Suggested Positions -

Long Jun $100 PUT (AGN1322R100) entry $1.85

chart:

Entry on May 09 at $103.46
Average Daily Volume = 2.4 million
Listed on May 08 2013


Expedia Inc. - EXPE - close: 58.87 change: +2.90

Stop Loss: 60.25
Target(s): 1st target: 55.10, 2nd target 53.00
Current Option Gain/Loss: -20.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/11/13: Ouch! EXPE surged +5.1% and we can lay the blame on PCLN. Thursday night PCLN reported a strong earnings report but issued cautious guidance. Shares of PCLN were down -$20 after hours on Thursday night. The stock reversed sharply by Friday morning and surged +3.7% to a new 52-week high thanks to multiple analysts raising their price targets on PCLN. This strength in PCLN probably sparked some short covering in EXPE. Shares of EXPE are now testing technical resistance at the simple 200-dma near 59.35. Beyond that the $60.00 level should be resistance. I am not suggesting new positions at this time.

Earlier Comments:
Please note I am listing two targets. Our conservative target is $55.10 since the $55 level has been support in the past. Our more aggressive target is $53.00. You choose which target you want to exit at. FYI: The Point & Figure chart for EXPE is bearish with a $55 target.

- Suggested Positions -

Long Jun $55 PUT (EXPE1322R55) entry $1.50

chart:

Entry on May 07 at $58.48
Average Daily Volume = 2.9 million
Listed on May 06 2013



Longer-Term Play Updates



Chicago Bridge & Iron Co. - CBI - close: 57.15 change: -0.10

Stop Loss: 51.90
Target(s): 62.50
Current Option Gain/Loss: July's: +81.8% or Jan's: +44.8%
Time Frame: 3 to 4 months
New Positions: see below

Comments:
05/11/13: CBI saw a little bit of profit taking on Friday but overall it was a good week. Shares are up three weeks in a row and arguably short-term overbought. It might be time for a pullback soon. Broken resistance at the 50-dma and near $55 could offer new support.

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*

05/08/13 new stop loss @ 51.90
*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

Amgen Inc. - AMGN - close: 106.72 change: +2.16

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

Comments:
05/11/13: AMGN had been underperforming both the broader market and its peers in the biotech sector the last couple of weeks. Shares looked poised to break down further. That changed on Friday with a +2.0% gain and a bullish breakout over the trend of lower highs. Our trigger to buy puts was $103.65 but AMGN never hit it. I am removing AMGN as a bearish candidate.

Trade did not open.

05/11/13 removed from the newsletter

chart:

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


Ulta Salon - ULTA - close: 92.18 change: +2.79

Stop Loss: 92.05
Target(s): early target: $85.25, longer target: $81.00
Current Option Gain/Loss: -32.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/11/13: ULTA completely reversed Thursday's -2.09 decline with a +2.79 gain on Friday. There was no follow through lower as traders bought the dip in ULTA at its 10-dma. Shares managed to push through a crowd of potential resistance and trade above its 100-dma, 150-dma, 200-dma, 300-dma, and the $92.00 level. The stock hit our stop loss at $92.05.

- Suggested Positions -

Jun $85 PUT (ULTA1322R85) entry $2.80 exit $1.90 (-32.1%)

05/10/13 stopped out at $92.05

chart:

Entry on May 10 at $89.73
Average Daily Volume = 1.1 million
Listed on May 09 2013


Vertex Pharma. - VRTX - close: 80.43 change: +3.65

Stop Loss: 80.50
Target(s): 66.00
Current Option Gain/Loss: -43.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/11/13: Biotech stocks were a hot spot in the market on Friday with the BTK index gaining +3.3% and the IBB biotech ETF surging +2.9%. Both closed at new all-time highs. This didn't bode well for VRTX bears. Shares broke through the short-term bearish trend of lower highs. There was a late day acceleration higher. This looks like shorts racing to get out as the sector continued to climb. Our stop loss was hit at $80.50.

- Suggested Positions -

Jun $75 PUT (VRTX1322R75) entry $3.60 exit $2.05 (-43.0%)

05/10/13 stopped out

chart:

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