Editor's Note:

Shares of Boeing Co. (BA) and Chicago Bridge & Iron (CBI) hit our bullish exit targets on Friday.

We have removed ORLY. Both XLE and COV hit our entry triggers.

Several stop losses have been updated.


Current Portfolio:


CALL Play Updates

HanesBrands Inc. - HBI - close: 51.54 change: +0.56

Stop Loss: 50.40
Target(s): 54.75
Current Option Gain/Loss: +15.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/18/13: HBI kept pace with the broader market and added another +1.0% on Friday. This is a new closing high for the stock.

We are turning a bit more defensive here and raising the stop loss to $50.40. More aggressive traders will want to consider keeping their stop loss below $50.00, which should be round-number support.

- Suggested Positions -

Long Jun $50 call (HBI1322F50) entry $2.00

05/18/13 new stop loss @ 50.40
05/14/13 new stop loss @ 49.40

chart:

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


Michael Kors - KORS - close: 60.61 change: +1.34

Stop Loss: 57.65
Target(s): 64.75
Current Option Gain/Loss: -19.1%
Time Frame: exit PRIOR to earnings on May 29th
New Positions: see below

Comments:
05/18/13: Traders did indeed buy the dip in KORS on Friday. The stock bounced off its 10-dma and managed to erase Thursday's decline. We have less than two weeks left on this trade. KORS is scheduled to report earnings on May 29th and we do not want to hold over the announcement.

- 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

chart:

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


Lockheed Martin - LMT - close: 106.41 change: +2.41

Stop Loss: 103.45
Target(s): 109.00
Current Option Gain/Loss: +147.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/18/13: Wow! LMT was a strong outperformer on Friday with a +2.3% surge to new four and a half year highs. More conservative traders may want to take profits right now since our call option is up more than +140%.

We are raising the stop loss to $103.45. I am not suggesting new positions.

- Suggested Positions -

Long Jun $105 call (LMT1322F105) Entry $0.85

05/18/13 new stop loss @ 103.45. More conservative traders may want to take profits now with the bid on our call at more than $2.00

chart:

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


MEDNAX, Inc. - MD - close: 92.99 change: +0.29

Stop Loss: 88.90
Target(s): 98.50
Current Option Gain/Loss: +33.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/18/13: MD extended its gains to four days in a row and shares are up 8 out of the last 9 sessions. Thus MD is growing short-term overbought here and probably due for a dip. Look for short-term support in the $91-90 zone.

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

chart:

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


Martin Marietta Materials - MLM - close: 110.91 change: +0.99

Stop Loss: 107.45
Target(s): 118.50
Current Option Gain/Loss: + 3.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/18/13: On Thursday MLM teased us with a breakout past $110. On Friday the stock jumped past resistance at $110 and closed at new multi-year highs. The simple 10-dma has risen to $108.45. More conservative traders may want to adjust their stops closer to this level.

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

chart:

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


Occidental Petroleum - OXY - close: 92.84 change: +1.81

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: +19.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/18/13: Friday's market rally helped boost OXY. The stock managed to outperform the major indices and many of its peers with a +1.98% gain. Furthermore OXY has broken out past short-term resistance at the $92.00 level.

I am raising the stop loss to $89.75.

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

05/18/13 new stop loss @ 89.75

chart:

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


WellPoint Inc. - WLP - close: 77.81 change: +0.97

Stop Loss: 75.95
Target(s): 79.50
Current Option Gain/Loss: +80.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/18/13: WLP managed to outperform its peers in the healthcare sector with a +1.26% gain on Friday. The stock remains below short-term resistance at $78.00.

The simple 10-dma has risen just past $76.00. Plus the $76.00 level is the bottom of the recent gap higher so it should be short-term support. We are raising the stop loss on WLP to $75.95. More conservative traders might want to raise their stop higher or just take profits right now. I am adjusting our exit target down to $79.50.

- Suggested Positions -

Long Jun $75 call (WLP1322F75) entry $1.91

05/18/13 new stop loss @ 75.95, adjust exit target to $79.50
05/14/13 new stop loss @ 74.65

chart:

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


Energy ETF - XLE - close: 82.12 change: +1.35

Stop Loss: 79.45
Target(s): 89.00
Current Option Gain/Loss: Jun85c: + 4.7% & Sep85c: + 2.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/18/13: The energy sector surged higher on Friday and the XLE managed to breakout past resistance at its 2011 highs. Our trigger to buy calls was hit 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.

- Suggested Positions -

Long Jun $85 call (XLE1322F85) entry $0.42

- or -

Long Sep $85 call (XLE1321i85) entry $1.80

chart:

Entry on May 17 at $81.55
Average Daily Volume = 13.0 million
Listed on May 14 2013


PUT Play Updates

Allergan Inc. - AGN - close: 101.41 change: +0.99

Stop Loss: 104.25
Target(s): 97.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/18/13: With the market in rally mode AGN managed a rebound off its midday lows. Shares added almost +1% by the closing bell. Look for overhead resistance near $103.00.

- Suggested Positions -

Long Jun $100 PUT (AGN1322R100) entry $1.85

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

chart:

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


Covidien - COV - close: 65.77 change: +0.10

Stop Loss: 67.05
Target(s): 62.00
Current Option Gain/Loss: - 8.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/18/13: Friday's session was relatively quiet for shares of COV. The stock's failure to really participate in the market's widespread rally is a good sign for the bears. Shares did hit our trigger to buy puts at $65.55. I would consider new positions at current levels or you could wait for a new relative low under $65.49.

- Suggested Positions -

Long Jun $65 PUT (COV1322R65) entry $1.20

chart:

Entry on May 17 at $65.55
Average Daily Volume = 3.5 million
Listed on May 16 2013


iShares Russell 2000 - IWM - close: 99.05 change: +1.10

Stop Loss: 102.25
Target(s): 95.25
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Comments:
05/18/13: It was another impressive week for the small cap Russell 2000 index with a +2.1% gain. The index is up four weeks in a row and now up +17.3% for the year. We suspect that the 1,000 level will be round-number, psychological resistance for the Russell 2000. That equals the 100.00 mark for the IWM ETF.

Tonight we are adjusting our strategy to take a more aggressive entry point. We will use a trigger to buy puts at $99.75 and adjust our stop loss to $102.25. Readers may want to keep their position size small since this is a riskier entry point. Most traders avoid trying to catch a falling knife and pick a bottom in a rapidly falling stock. At the same time, trying to pick a top can be just as dangerous.

I am adjusting our exit target to $95.25.

Trigger @ 99.75

- Suggested Positions -

buy the Jun $95 PUT (IWM1322R95) current ask $0.77

05/18/13 adjust entry trigger to $99.75
adjust the stop loss to $102.25, adjust the exit target to $95.25.

chart:

Entry on May -- at $---.--
Average Daily Volume = 41.8 million
Listed on May 16 2013



Longer-Term Play Updates



Chicago Bridge & Iron Co. - CBI - close: 61.76 change: +2.18

Stop Loss: 54.90
Target(s): 62.00 for the July calls, exit 2014 calls now
Current Option Gain/Loss: July's: +231.8% or Jan's: +131.0%
Time Frame: 3 to 4 months
New Positions: see below

Comments:
05/18/13: Target achieved!

The market's rally is fueling huge gains in shares of CBI. The stock shot higher on Friday to post a +3.65% gain. CBI also hit our $62.00 exit target for the July calls! That's a +231% rise in the 2013 July $55 calls.

Previously we moved the exit target for the 2014 January calls to $69.00. We're altering our strategy again tonight. Investors should be nimble and adjust to market changes. We suspect that CBI has moved too far too fast. Catching a +$10 move in less than one month is a huge gift. Therefore, tonight we are suggesting investors exit our 2014 calls immediately on Monday morning to lock in gains. We can re-visit CBI after it corrects lower since we're still long-term bullish on the name.

Please review our original play description on this page here.

- Suggested Positions -

(Target hit for July calls on May 17, 2013)
Long 2013 Jul $55 call (CBI1320G55) Entry $2.20* exit $7.30 (+231.8%)

- or -

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

05/18/13 Adjust exit strategy on 2014 calls. Exit immediately! on Monday morning May 20th
05/17/13 $62 target hit for July calls!
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.

chart:

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


CLOSED BULLISH PLAYS

The Boeing Co. - BA - close: 98.92 change: +2.34

Stop Loss: 93.40
Target(s): 99.00
Current Option Gain/Loss: +145.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/18/13: Target achieved.

BA accelerated higher on Friday and hit our exit target at $99.00.

- Suggested Positions -

Jun $95 call (BA1322F95) entry $2.02 exit $4.95 (+145.0%)

05/17/13 target hit
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

chart:

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


O'Reilly Auto. - ORLY - close: 110.95 change: +0.24

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

Comments:
05/18/13: ORLY is not participating in the market's rally to the extent that we think it should be. Shares underperformed the broader indices on Friday. Our trade has not opened yet with the trigger at $112.25. I am removing ORLY from the newsletter tonight. We can re-visit it on a breakout higher or a correction back to support.

Trade did not open.

05/18/13 removed from the newsletter

chart:

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