Editor's Note:

The U.S. markets rebounded from their Friday morning lows but eventually closed the day relatively flat.

Our BA and FB trades have been triggered.
We want to exit our MD trade at the opening bell on Tuesday.

Don't forget that the U.S. market is closed on Monday for Memorial Day.


Current Portfolio:


CALL Play Updates

The Boeing Co. - BA - close: 100.00 change: +0.25

Stop Loss: 97.75
Target(s): 104.50
Current Option Gain/Loss: - 3.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/25/13: The improvement in the durable goods orders report that came out Friday morning was fueled by a spike in aircraft orders for Boeing. Shares of BA saw a brief spike higher on Friday morning that rallied past round-number resistance at $100.00, hit our entry point at $100.25, and then reversed. Fortunately, traders bought the dip but shares closed right at the $100.00 mark. Resistance has not been broken yet.

Our trade is open but if you are looking for an entry point readers may want to wait for a new rally past $100.25 or a rally past Friday's intraday high of $100.58.

*Small Positions* - Suggested Positions -

Long Jun $100 call (BA1322F100) entry $2.55

chart:

Entry on May 24 at $100.25
Average Daily Volume = 5.0 million
Listed on May 23 2013


Ecolab Inc. - ECL - close: 87.14 change: -0.05

Stop Loss: 85.95
Target(s): 94.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
05/25/13: We are going to give ECL another chance after traders bought the dip near $86.00 on Friday morning. Right now the $88.00 and the simple 10-dma, also near $88.00, should be short-term resistance. Tonight we are adjusting our entry trigger to buy calls to $88.25. Now the $89.25 area and the $90.00 level could still be overhead resistance so I would consider a more aggressive, higher-risk entry point. If triggered at our new entry point of $88.25 we will start with a stop loss at $85.95.

Please note that I am adjusting our time frame and moving the option strikes out to July.

Earlier Comments:
I am encouraging traders to keep their position size small to limit risk.

Trigger @ 88.25 *Small Positions*

- Suggested Positions -

buy the Jul $90 call (ECL1320G90) current ask $1.00

05/25/13 adjust entry trigger to $88.25 (was 90.25)
adjust stop loss down to $85.95
adjust the option strike from Jun $90 to Jul $90 call
We are also moving the exit target to $94.75.

chart:

Entry on May -- at $---.--
Average Daily Volume = 1.0 million
Listed on May 21 2013


Lockheed Martin - LMT - close: 107.06 change: +0.76

Stop Loss: 103.95
Target(s): 109.00
Current Option Gain/Loss: +188.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/25/13: The dip-buying in LMT continues and shares outperformed the market on Friday with a +0.7% gain. I am moving our stop loss up to $103.95 while more conservative traders may want to use a stop under Thursday's low, which was $105.46.

- Suggested Positions -

Long Jun $105 call (LMT1322F105) Entry $0.85

05/25/13 new stop loss @ 103.95
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: 91.95 change: -1.06

Stop Loss: 90.75
Target(s): 98.50
Current Option Gain/Loss: -22.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/25/13: MD's failure to see any follow through on Thursday's bounce worries us. Shares underperformed the market on Friday. I am concerned shares are headed back down toward $90.00.

Tonight we are suggesting an immediate exit, which will be Tuesday morning since Monday the markets are closed. More aggressive traders might want to hang on and just adjust your stop so it's under likely support at $90.00.

Earlier Comments:
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

05/25/13 prepare to exit on Tuesday morning, May 28th
05/22/13 caution: today's session has created a bearish reversal candlestick pattern
05/20/13 new stop loss @ 90.75

chart:

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


Panera Bread Co. - PNRA - close: 190.19 change: +0.28

Stop Loss: 199.00
Target(s): 183.95
Current Option Gain/Loss: +16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/25/13: PNRA also rebounded off its Friday morning lows. Shares managed to eke out a gain. It looks like traders lost interest ahead of the three day weekend and PNRA spent the rest of the session drifting along the $190 level.

More conservative traders might want to consider adjusting their stop loss toward Thursday's low (187.45) or toward the simple 10-dma (currently 187.62). I would not launch new positions at this time.

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

chart:

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


Western Digital - WDC - close: 62.30 change: +0.04

Stop Loss: 58.95
Target(s): 64.75
Current Option Gain/Loss: +37.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/25/13: WDC bounced from its Friday morning lows to end the week at all-time highs. WDC is now up five weeks in a row and seems poised for more gains. Investors may want to tighten their stops closer to the 10-dma or the $60.00 level.

*small positions* - Suggested Positions -

Long Jun $60 call (WDC1322F60) entry $2.55

chart:

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


PUT Play Updates

Facebook, Inc. - FB - close: 24.31 change: -0.75

Stop Loss: 26.05
Target(s): 21.50
Current Option Gain/Loss: + 15.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/25/13: Friday was not a good day for shares of FB. The stock continued to sink and broke down below round-number support at the $25.00 mark and technical support at its simple 200-dma. Shares also hit our suggested entry price at $24.65. Our target is $21.50.

FYI: Another story on Friday was news that Google (GOOG) might make a bid for Waze. Previously rumors were circling that FB might buy Waze. It's estimated that Waze might be sold for $1 billion. If you are not familiar with Waze it's a free navigation app for your smartphone. Yet it's more than that and includes "crowdsourcing" real time information on traffic, road hazards, and speed traps.

- Suggested Positions -

Long Jun $25 PUT (FB1322R25) entry $1.10

chart:

Entry on May 24 at $24.65
Average Daily Volume = 38 million
Listed on May 22 2013


iShares Russell 2000 - IWM - close: 97.88 change: -0.02

Stop Loss: 102.25
Target(s): 95.25
Current Option Gain/Loss: +55.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
05/25/13: Traders were still in a buy-the-dip mood on Friday morning. The IWM rebounded from its lows but failed to rally back above its 10-dma. It looks like the $98.00 level could be new short-term resistance. I would still consider new positions now but I would be even more tempted to wait and see if the IWM produces another failed rally closer to $100 as a better alternative entry point.

Earlier Comments:
Readers may want to keep their position size small since this is a riskier entry point.

- Suggested Positions -

Long Jun $95 PUT (IWM1322R95) entry $0.60

05/22/13 triggered @ 99.75
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.

chart:

Entry on May 22 at $99.75
Average Daily Volume = 41.8 million
Listed on May 16 2013