Editor's Note:

The S&P 500 index tagged another new record high today. The Dow Jones Industrials followed suit.

Our WDC trade was triggered. WLP was closed as planned.
We added another entry point for the IWM put play.


Current Portfolio:


CALL Play Updates

HanesBrands Inc. - HBI - close: 50.89 change: -0.04

Stop Loss: 50.40
Target(s): 54.75
Current Option Gain/Loss: -12.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/21/13: HBI's performance today is a bit concerning. Shares flirted with a breakdown below their 10-dma and almost hit our stop loss at $50.40. I would not be surprised to see HBI actually hit our stop loss tomorrow but for now the up trend is still higher. I am not suggesting new positions.

- 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: 58.95
Target(s): 64.75
Current Option Gain/Loss: -13.2%
Time Frame: exit PRIOR to earnings on May 29th
New Positions: see below

Comments:
05/21/13: KORS rebounded off its rising 10-dma yet again. I am raising our stop loss to $58.95. More conservative traders may want to raise their stop closer to $60.00 instead.

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

05/21/13 new stop loss @ 58.95
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: 106.99 change: +0.43

Stop Loss: 103.45
Target(s): 109.00
Current Option Gain/Loss: +194.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/21/13: Traders bought the dip in LMT near $106.00 midday. LMT set a new 52-week closing high. I don't see any changes from my prior comments. More conservative traders may want to take profits right now since our call option is up more than +190%.

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: 93.40 change: +0.43

Stop Loss: 90.75
Target(s): 98.50
Current Option Gain/Loss: +38.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/21/13: The last few days have seen traders buying the dip in MD near $92.50. It happened again today and MD looks poised to breakout past the $94.00 level soon.

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: 111.98 change: -0.11

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:
05/21/13: Hmm... it looks like the current sprint higher in shares of MLM might be running out of oxygen. Shares tagged a new relative high today and then reversed. I would not be surprised to see a correction back toward $110. 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: 93.06 change: -0.63

Stop Loss: 89.75
Target(s): 98.50
Current Option Gain/Loss: +18.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/21/13: OXY spiked past $94 this morning but couldn't hold on to its gains. The stock reversed to a -0.6% decline. OXY looks like it's poised to retest the $92.00 level, which should be new support. 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: 192.65 change: +2.31

Stop Loss: 199.00
Target(s): 183.95
Current Option Gain/Loss: +61.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/21/13: The surge in shares of PNRA continues with another new high today. I would not chase it here.

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


Six Flags Entertainment - SIX - close: 79.96 change: +0.62

Stop Loss: 77.95
Target(s): 86.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
05/21/13: The rally in SIX continued today with shares testing resistance at the $80.00 mark. Yet the stock did not hit our suggested entry point at $80.25. I don't see any changes from my Monday night comments.

NOTE: SIX's rival, Seaworld Entertainment (SEAS), is scheduled to report earnings tomorrow (probably after the closing bell). SEAS' earnings results could influence trading in SIX tomorrow and Thursday.

Earlier Comments:
I would probably label this trade a higher-risk, more aggressive trade. Shares of SIX have been volatile in recent weeks. Just look at the big swings in April. Yet SIX has recovered and now it's poised to break out of its short-term $78-80 trading range.

We are suggesting a trigger to open small bullish positions at $80.25. If triggered our target is $86.00. FYI: The Point & Figure chart for SIX is bullish with a $96 target.

SIX currently has a relatively high-dividend with a 4.6% yield. Plus, SIX is scheduled to do a 2-for-1 stock split on June 27th. Shares will begin trading ex-dividend on May 28th. The quarterly cash dividend should be 90 cents.

Trigger @ $80.25 *Small Positions*

- Suggested Positions -

buy the Jun $80 call (SIX1322F80) current ask $1.65

Entry on May -- at $---.--
Average Daily Volume = 418 thousand
Listed on May 20 2013


Western Digital - WDC - close: 60.72 change: +1.27

Stop Loss: 58.95
Target(s): 64.75
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/21/13: Bullish analyst comments helped boost shares of WDC today and the stock erased yesterday's losses. Shares also hit a new high and hit our entry trigger at $60.65.

*small positions* - Suggested Positions -

Long Jun $60 call (WDC1322F60) entry $2.55

Entry on May 21 at $60.65
Average Daily Volume = 3.3 million
Listed on May 18 2013


Energy ETF - XLE - close: 83.11 change: -0.17

Stop Loss: 80.50
Target(s): 89.00
Current Option Gain/Loss: Jun85c: +64.2% & Sep85c: +25.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/21/13: The XLE hit new relative highs this morning before reversing all of its gains. Shares look short-term overbought and we might see this ETF pullback toward $82 or its 10-dma soon.

- 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: 98.54 change: +0.04

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:
05/21/13: AGN didn't move much today as the stock hovered near its simple 200-dma. I don't see any changes from my prior comments. 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.

- 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: 65.80 change: +0.26

Stop Loss: 67.05
Target(s): 62.00
Current Option Gain/Loss: -25.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/21/13: COV saw a brief spike higher this morning. The rally stalled at short-term resistance near $66.00 and its 50-dma (and 10-dma). Readers might want to wait for a new drop under $65.50 before initiating new positions.

- 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: 99.23 change: +0.02

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:
05/21/13: Hmm... that is two days in a row now that the Russell 2000 index has hit the 1,000 mark but the IWM has not made it to the 100 level yet. Yesterday the IWM's intraday high was $99.60. Today it was $99.55.

We will keep our trigger to buy puts at $99.75 for now. However, I am also adding a breakdown trigger to buy puts at $98.75 as well. Our stop loss remains at $102.25 and our target remains $95.25.

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 or Trigger @ 98.75

- Suggested Positions -

buy the Jun $95 PUT (IWM1322R95) current ask $0.74

05/21/13 added a secondary entry trigger at $98.75
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


CLOSED BULLISH PLAYS

WellPoint Inc. - WLP - close: 78.10 change: +0.61

Stop Loss: 75.95
Target(s): 79.50
Current Option Gain/Loss: +59.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/21/13: Last night we decided to close our WLP trade at the open today. Shares opened at $77.53. The option opened about five cents lower.

- Suggested Positions -

Long Jun $75 call (WLP1322F75) entry $1.91 exit $3.05 (+59.6%)

05/21/13 planned exit this morning
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

chart:

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