Editor's Note:

The U.S. stock market's major indices stalled on Monday.

PNRA was triggered.
We want to exit WLP tomorrow.


Current Portfolio:


CALL Play Updates

HanesBrands Inc. - HBI - close: 50.93 change: -0.61

Stop Loss: 50.40
Target(s): 54.75
Current Option Gain/Loss: -10.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/20/13: A lackluster session for stocks today left HBI slipping back toward short-term support near its 10-dma. If this trend continues tomorrow we could see HBI hit our new stop loss at $50.40.

- 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

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


Michael Kors - KORS - close: 60.58 change: -0.03

Stop Loss: 57.65
Target(s): 64.75
Current Option Gain/Loss: -14.7%
Time Frame: exit PRIOR to earnings on May 29th
New Positions: see below

Comments:
05/20/13: KORS garnered a new "buy" rating this morning, which helped shares spike higher this morning. Yet the gains faded and KORS closed virtually unchanged on the session. There is no change from my prior comments although more conservative traders may want to raise their stop loss closer to the 10-dma.

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

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


Lockheed Martin - LMT - close: 106.56 change: +0.15

Stop Loss: 103.45
Target(s): 109.00
Current Option Gain/Loss: +164.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/20/13: LMT shot higher this morning, just like Friday. Shares spent the rest of the day moving sideways in the $106.50-107.00 zone. Gains did fade by the closing bell. More conservative traders may want to take profits right now since our call option is up more than +160%.

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

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


MEDNAX, Inc. - MD - close: 92.97 change: -0.02

Stop Loss: 90.75
Target(s): 98.50
Current Option Gain/Loss: +27.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/20/13: MD tagged another new high this morning but the rally faded. Shares closed virtually unchanged on the session. I suspect the stock could see a pullback soon. The simple 10-dma should offer some support and the moving average has risen to $90.97. We are raising our stop loss to $90.75. More aggressive traders will want to keep their stop loss below the $90.00 mark, which would be stronger 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

05/20/13 new stop loss @ 90.75

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


Martin Marietta Materials - MLM - close: 112.09 change: +1.18

Stop Loss: 107.45
Target(s): 118.50
Current Option Gain/Loss: +19.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/20/13: MLM displayed relative strength on Monday with a +1.0% gain and another new high. If you're looking for a new entry point consider waiting for a dip back toward $110.00 although there is no guarantee MLM is going to see such a dip. More conservative traders may want to adjust their stops higher.

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


Occidental Petroleum - OXY - close: 93.69 change: +0.85

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: +37.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/20/13: After Friday's bullish breakout past resistance at $92.00 the rally continued on Monday. OXY has closed just above the September 2012 high of $93.60. I am not suggesting new 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

05/18/13 new stop loss @ 89.75

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


Panera Bread Co. - PNRA - close: 190.34 change: +3.74

Stop Loss: 199.00
Target(s): 183.95
Current Option Gain/Loss: +30.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/20/13: Our new PNRA trade is off to a good start. Shares initially dipped lower but traders bought the dip near $185 and PNRA exploded higher. Our trigger to buy calls was hit at $187.00.

FYI: The Point & Figure chart for PNRA is bullish with a $234 target.

*Small Positions* - Suggested Positions -

Long Jun $190 call (PNRA1322F190) entry $3.60

Entry on May 20 at $187.00
Average Daily Volume = 558 thousand
Listed on May 18 2013


Western Digital - WDC - close: 59.45 change: -1.01

Stop Loss: 58.95
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
05/20/13: WDC briefly traded to a new high today but it wasn't high enough to hit our entry trigger at $60.65. The stock saw a midday decline and underperformed the market with a -1.6%. If shares close below their 10-dma it could signal a much deeper correction. For now our trade is unchanged.

Earlier Comments:
I am suggesting a trigger to open small bullish positions at $60.65. If triggered our target is $64.75.

Trigger @ 60.65 *small positions*

- Suggested Positions -

buy the Jun $60 call (WDC1322F60)

Entry on May -- at $---.--
Average Daily Volume = 3.3 million
Listed on May 18 2013


WellPoint Inc. - WLP - close: 77.49 change: -0.32

Stop Loss: 75.95
Target(s): 79.50
Current Option Gain/Loss: +62.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/20/13: WLP tried to breakout past short-term resistance at $78.00 this morning but the rally reversed. I am suggesting we go ahead and exit now (tomorrow morning at the open) to lock in gains. Currently our calls have a $3.10/3.25 bid/ask spread.

- Suggested Positions -

Long Jun $75 call (WLP1322F75) entry $1.91

05/20/13 prepare to exit tomorrow at the opening bell
05/18/13 new stop loss @ 75.95, adjust exit target to $79.50
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: 83.28 change: +1.16

Stop Loss: 80.50
Target(s): 89.00
Current Option Gain/Loss: Jun85c: +69.0% & Sep85c: +27.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/20/13: Energy stocks were a bright spot for the market today. The XLE displayed relative strength with a +1.4% gain and another new multi-year high. The simple 10-dma has risen to $81.14. We are raising our stop loss to $80.50.

- Suggested Positions -

Long Jun $85 call (XLE1322F85) entry $0.42

- or -

Long Sep $85 call (XLE1321i85) entry $1.80

05/20/13 new stop loss @ 80.50

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: 98.50 change: -2.91

Stop Loss: 102.25
Target(s): 97.00
Current Option Gain/Loss: +62.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/20/13: AGN continues to underperform the market. Shares lost another -2.8% today and closed right at their simple 200-dma. More conservative traders may want to take profits right here. The bid on our put has risen to $3.00. Our exit target is $97.00. Tonight we are lowering our stop loss to $102.25.

- Suggested Positions -

Long Jun $100 PUT (AGN1322R100) entry $1.85

05/20/13 new stop loss @ 102.25, readers may want to take profits now
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


Covidien - COV - close: 65.54 change: -0.23

Stop Loss: 67.05
Target(s): 62.00
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/20/13: COV failed to breakout past short-term resistance near $66.00 and its 10-dma intraday. I would still consider new positions at current levels.

- Suggested Positions -

Long Jun $65 PUT (COV1322R65) entry $1.20

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


iShares Russell 2000 - IWM - close: 99.21 change: +0.16

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:
05/20/13: Today is a good example of the small differences between the indices and the ETFs that track them. The Russell 2000 index crossed the 1,000 mark for the first time in history. Yet the IWM only hit an intraday high of $99.60. We were expecting the Russell 2K to hit 1,000 and reverse and thus wanted to buy puts on the IWM near the 100 mark.

More aggressive traders may want to just jump in early and buy puts on the IWM right now. We will stick to the current plan and wait for the IWM to hit our suggested trigger at $99.75 to buy puts.

Earlier Comments:
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.

Trigger @ 99.75

- Suggested Positions -

buy the Jun $95 PUT (IWM1322R95) current ask $0.71

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

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: +137.9%
Time Frame: 3 to 4 months
New Positions: see below

This trade is now closed

Comments:
05/20/13: Over the weekend we decided that CBI's run was just too far too fast and we wanted to lock in gains on the 2014 January calls as well. The plan was to exit our 2014 calls at the open this morning. Shares of CBI were kind enough to gap open higher at $61.98. The stock spiked to $64.67 intraday before settling with a +2.6% gain.

We remain long-term bullish on this stock but suggesting waiting for a correction before launching new positions.

NOTE: The 2014 Jan. $60 calls didn't trade until midday and they gapped open at $8.20. They almost hit $9.00 at the high for the day. Our closing price is an estimate on what the option should have been trading at this morning, at the opening bell.

- 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* exit $6.90** (+137.9%)

**exit price is an estimate, see note above
05/20/13 2014 calls closed at the open. CBI gapped higher @ 61.98
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