Editor's Note:

Shares of Chicago Bridge & Iron (CBI) surged on news that Berkshire Hathaway initiated a position in the first quarter. We are adjusting our exit strategy on CBI.

Our MLM trade was triggered today.


Current Portfolio:


CALL Play Updates

The Boeing Co. - BA - close: 97.95 change: -0.25

Stop Loss: 93.40
Target(s): 99.00
Current Option Gain/Loss: +58.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/16/13: Shares of BA held up reasonably well. They traded sideways most of the session before slipping late in the day to a -0.4% decline. Upon further review today we've decided to adjust our stop loss down to $93.40. More conservative traders may want to keep their stop loss closer to $95.00 or its simple 10-dma instead. I am not suggesting new positions.

- Suggested Positions -

Long Jun $95 call (BA1322F95) entry $2.02

05/16/13 re-adjust stop loss back down to $93.40
05/15/13 new stop loss @ 94.40
05/14/13 new stop loss @ 93.75

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


HanesBrands Inc. - HBI - close: 50.98 change: -0.20

Stop Loss: 49.40
Target(s): 54.75
Current Option Gain/Loss: - 2.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/16/13: Thursday was also a relatively quiet day for HBI. Look for short-term support near $50.00 or its 10-dma.

- Suggested Positions -

Long Jun $50 call (HBI1322F50) entry $2.00

05/14/13 new stop loss @ 49.40

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


Michael Kors - KORS - close: 59.27 change: -1.23

Stop Loss: 57.65
Target(s): 64.75
Current Option Gain/Loss: -35.2%
Time Frame: exit PRIOR to earnings on May 29th
New Positions: see below

Comments:
05/16/13: Wal-Mart (WMT) was a major story today and a drag on the retail sector. WMT's earnings report this morning was not very encouraging. It is worth noting that WMT and KORS focus on very different markets. This drop in KORS just looks like some profit taking but the close below its 10-dma is short-term bearish. More conservative traders may want to tighten their stops.

- Suggested Positions -

Long Jun $62.50 call (KORS1322F62.5) entry $3.40

05/13/13 trade triggered on gap open higher at $61.55
trigger was $60.65

Entry on May 13 at $61.55
Average Daily Volume = 3.5 million
Listed on May 11 2013


Lockheed Martin - LMT - close: 104.00 change: -0.05

Stop Loss: 101.45
Target(s): 109.00
Current Option Gain/Loss: + 5.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/16/13: The market's weakness today kept a lid on LMT's gains. The stock tried to rally but gave back all of its advances. If shares of LMT dip further we can look for potential support near $102.50.

- Suggested Positions -

Long Jun $105 call (LMT1322F105) Entry $0.85

Entry on May 15 at $103.05
Average Daily Volume = 1.7 million
Listed on May 14 2013


MEDNAX, Inc. - MD - close: 92.70 change: +0.73

Stop Loss: 88.90
Target(s): 98.50
Current Option Gain/Loss: +27.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/16/13: The relative strength in shares of MD continues with a +0.79% gain. More conservative traders might want to start thinking about inching up their stop loss. I would expect broken resistance at $90.00 to offer new support.

Earlier Comments:
If triggered our target is $98.50. However, I am suggesting we keep our position size small. MD doesn't trade a lot of volume and the options do not see a lot of volume either.

*Small Positions* - Suggested Positions -

Long Jun $95 call (MD1322F95) entry $0.90

Entry on May 14 at $91.15
Average Daily Volume = 242 thousand
Listed on May 11 2013


Martin Marietta Materials - MLM - close: 109.92 change: +0.43

Stop Loss: 107.45
Target(s): 118.50
Current Option Gain/Loss: - 9.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/16/13: MLM managed to buck the market's pullback and post another gain. Shares of MLM briefly traded above resistance at $110.00 and the stock did hit our trigger at $110.25 before pulling back. I would wait for a new rise past $110.25 or today's high at $110.37 before initiating new positions.

Earlier Comments:
MLM is currently hovering below short-term resistance at $110. A breakout here could spark more short covering. The most recent data listed short interest at 11% of the rather small 45.9 million share float.

- Suggested Positions -

Long Jun $110 call (MLM1322F110) entry $3.10

Entry on May 16 at $110.25
Average Daily Volume = 378 thousand
Listed on May 15 2013


O'Reilly Auto. - ORLY - close: 110.71 change: -1.25

Stop Loss: 109.75
Target(s): 119.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
05/16/13: BA followed the market lower today. The stock actually underperformed the market with a -1.1% decline. Shares are testing what should be short-term support near their 10-dma and the $110 level. Currently we're still on the sidelines. I am suggesting a trigger to buy calls at $112.25. If triggered our target is $119.00. The Point & Figure chart for ORLY is bullish with a $137 target.

Trigger @ 112.25

- Suggested Positions -

buy the Jun $115 call (ORLY1322F115)

Entry on May -- at $---.--
Average Daily Volume = 813 thousand
Listed on May 15 2013


Occidental Petroleum - OXY - close: 90.93 change: -0.10

Stop Loss: 87.75
Target(s): 98.50
Current Option Gain/Loss: -19.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/16/13: Hmm... OXY managed to eke out a small gain yet the rally intraday failed at resistance near $92.00. At this point traders may want to wait for a breakout past $92.00 before considering new bullish positions.

Earlier Comments:
On the weekly chart (see below) OXY has created a huge, inverse head-and-shoulders pattern, which is bullish. FYI: The Point & Figure chart for OXY is bullish with a $114 target.

- Suggested Positions -

Long Jun $92.50 call (OXY1322F92.5) entry $1.95

Entry on May 14 at $90.75
Average Daily Volume = 6.3 million
Listed on May 13 2013


WellPoint Inc. - WLP - close: 76.84 change: -0.99

Stop Loss: 74.65
Target(s): 79.75
Current Option Gain/Loss: +47.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/16/13: WLP hit some profit taking today. Shares underperformed with a -1.2% pullback. I suspect we are going to see WLP fill the gap with a dip to $76.00 before it moves higher again.

- Suggested Positions -

Long Jun $75 call (WLP1322F75) entry $1.91

05/14/13 new stop loss @ 74.65

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


Energy ETF - XLE - close: 80.77 change: -0.40

Stop Loss: 79.45
Target(s): 89.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
05/16/13: The market's pullback today weighed on the XLE and shares drifted sideways. We are still waiting on a bullish breakout higher.

I am suggesting a trigger to buy calls at $81.55. If triggered our multi-week target is $89.00. The $90.00 level was major resistance back in 2008 and will probably be a hurdle for the ETF to cross.

Trigger @ 81.55

- Suggested Positions -

buy the Jun $85 call (XLE1322F85)

- or -

buy the Sep $85 call (XLE1321i85)

Entry on May -- at $---.--
Average Daily Volume = 13.0 million
Listed on May 14 2013


PUT Play Updates

Allergan Inc. - AGN - close: 100.42 change: -2.40

Stop Loss: 104.25
Target(s): 97.00
Current Option Gain/Loss: +32.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/16/13: AGN spiked lower this morning. Shares tried to bounce from round-number support at $100.00 but it didn't get very far. I am lowering the stop loss down to $104.25. We are also adjusting our exit target down to $97.00. More conservative traders may want to exit near the rising 200-dma instead (currently near $98.40).

Don't be surprised to see AGN try and bounce from $100 again tomorrow but the $103.00 level should be new resistance.

- Suggested Positions -

Long Jun $100 PUT (AGN1322R100) entry $1.85

05/16/13 new stop loss @ 104.25, adjust exit target to $97.00

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



Longer-Term Play Updates



Chicago Bridge & Iron Co. - CBI - close: 59.58 change: +1.82

Stop Loss: 54.90
Target(s): 62.00 for the July calls, $69 for the 2014 calls
Current Option Gain/Loss: July's: +154.5% or Jan's: +86.2%
Time Frame: 3 to 4 months
New Positions: see below

Comments:
05/16/13: CBI was a big winner today. Not only were shares up thanks to last night's news about Berkshire Hathaway initiating a position but this morning CBI garnered a bullish upgrade from another firm. Shares spiked toward $60.00 but were unable to close above this round-number resistance level.

More conservative traders with the July calls may want to consider taking profits now. Please note that we are adjusting our exit strategy:

Plan to exit the July calls at $62.00. I am placing a $69.00 target for our 2014 January calls.

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*

05/16/13 Target for the July $55 calls is $62.00 on CBI
05/16/13 Target for the 2014 Jan. calls is $69.00 on CBI
05/15/13 new stop loss @ 54.90, adjust exit target to $62.00
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.

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