Editor's Note:

The market's widespread bounce continued on Friday. The S&P 500 index is already up 100 points from its early February lows near 1740.

Don't forget that the U.S. market is closed on Monday, Feb. 17th.

Prepare to exit our LMT trade at the opening bell (on Tuesday).


Current Portfolio:


CALL Play Updates

Caterpillar Inc. - CAT - close: 96.55 change: +0.44

Stop Loss: 93.85
Target(s): 99.85
Current Option Gain/Loss: +18.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/15/14: CAT followed the market's slow drift higher on Friday. Shares ended the week at new multi-month highs. If the market cooperates we could see CAT testing the $100 area soon.

The Point & Figure chart for CAT is bullish with a $117 target.

small positions - Suggested Positions -

Long MAR $97.50 call (CAT1422C97.5) entry $1.45

02/13/14 planned entry at the opening bell
CAT gapped down at $95.29

chart:

Entry on February 13 at $95.29
Average Daily Volume = 8.3 million
Listed on February 12, 2014


Salesforce.com - CRM - close: 62.80 change: -0.33

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: + 0.0%
Time Frame: Exit PRIOR to earnings on Feb. 27th
New Positions: see below

Comments:
02/15/14: CRM garnered some bullish analyst comments this morning but the news failed to lift the stock price. After outperforming the market yesterday CRM underperformed on Friday with a -0.5% decline. More conservative traders might want to adjust their stop loss closer to the simple 20-dma near $60.50.

Earlier Comments:
Our target is $67.50. CRM has set its earnings date for Feb. 27th. We will plan to exit prior to earnings. FYI: The Point & Figure chart for CRM is bullish with an $82 target.

- Suggested Positions -

Long Mar $62.50 call (CRM1422C62.5) entry $3.30*

02/11/14 new stop loss @ 59.90
02/05/14 triggered @ 61.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on February 05 at $61.75
Average Daily Volume = 4.8 million
Listed on February 01, 2014


Computer Sciences - CSC - close: 61.72 change: -0.59

Stop Loss: 59.45
Target(s): 68.00
Current Option Gain/Loss: Mar $60c -11.0% & Jun $65c: - 9.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/15/14: CSC did not see any follow through on Thursday's breakout to new multi-year highs. If CSC does see a pullback we can look for potential support near $60.00 and its simple 10-dma.

Earlier Comments:
Our target is $68.00. I will point out that CSC did see additional resistance in the past near the $63-64 zone back in 2007. I prefer the June calls but I'm listing March as well for shorter-term traders. FYI: The Point & Figure chart for CSC is bullish with a $78 target.

- Suggested Positions -

Long MAR $60 call (CSC1422C60) entry $2.81*

- or -

Long JUN $65 call (CSC1421F65) entry $2.27*

02/13/14 triggered @ 62.15
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on February 13 at $62.15
Average Daily Volume = 1.59 million
Listed on February 12, 2014


Facebook, Inc. - FB - close: 67.09 change: -0.24

Stop Loss: 63.85
Target(s): 69.75
Current Option Gain/Loss: +40.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/15/14: Friday was a quiet session for FB's stock with it drifting sideways in a narrow range. Broken resistance near $65.00 could offer some short-term support.

Earlier Comments:
Our short-term target is $69.75. More aggressive investors could aim higher since the Point & Figure chart for FB is bullish with an $89 target.

- Suggested Positions -

Long MAR $70 call (FB1422C70) entry $1.27

02/13/14 new stop loss @ 63.85
02/11/14 triggered @ 64.75

chart:

Entry on February 11 at $64.75
Average Daily Volume = 60 million
Listed on February 08, 2014


F5 Networks - FFIV - close: 111.91 change: +0.17

Stop Loss: 108.60
Target(s): 118.50
Current Option Gain/Loss: - 2.8%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/15/14: We see a similar performance in shares of FFIV with the stock drifting sideways on Friday. The high on Friday was $112.41. I am suggesting traders wait for a new move above $112.50 before considering new positions.

Earlier Comments:
Our multi-week target is $118.50. We'll start with a stop loss at $106.90. More conservative traders will want to consider a higher stop loss.

- Suggested Positions -

Long MAR $115 call (FFIV1422C115) entry $3.14

02/13/14 new stop loss @ 108.60
02/11/14 triggered @ 111.10

chart:

Entry on February 11 at $111.10
Average Daily Volume = 2.8 million
Listed on February 10, 2014


Gilead Sciences - GILD - close: 81.21 change: -1.34

Stop Loss: 79.75
Target(s): 89.75
Current Option Gain/Loss: Mar $85c: -34.0% & Apr $85c: -22.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/15/14: It was a rare day with biotechs actually underperforming the broader market on Friday. GILD was definitely a culprit with shares down -1.6% on no real news. Nimble traders could use a dip or a bounce near $80.00 as a new entry point. If shares trade much below $80 GILD could hit our stop loss at $79.75.

Earlier Comments:
Our target is $89.50. I am listing both the March and the April calls. Pick a month that best suits your time frame.

FYI: The Point & Figure chart for GILD is currently bearish but a move above $83.00 should produce a new triple-top breakout buy signal.

- Suggested Positions -

Long MAR $85 call (GILD1422c85) entry $2.00

- or -

Long APR $85 call (GILD1419D85) entry $3.04*

02/13/14 new stop loss @ 79.75
02/12/14 triggered @ 82.50
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on February 12 at $82.50
Average Daily Volume = 13.7 million
Listed on February 11, 2014


Lockheed Martin - LMT - close: 162.89 change: +3.09

Stop Loss: 155.65
Target(s): 165.00
Current Option Gain/Loss: +267.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/15/14: The relative strength in LMT continues with the stock outperforming the market. Shares rallied +1.9% on Friday and closed at new record highs. LMT is up eight out of the last nine session. The move above $160 is bullish but LMT is growing short-term overbought.

Not only does LMT look overbought but it's testing a trend line of resistance. More aggressive traders may want to aim higher. Up until today we have been aiming for $165.00. However, I am suggesting an immediate exit to lock in gains. The market is closed on Monday so we'll exit on Tuesday morning (Feb. 18th).

Our March $155 call is currently trading with a bid/ask of $8.20/8.70.

- Suggested *small* Positions -

Long MAR $155 call (LMT1422C155) entry $2.23

02/15/14 prepare to exit on Tuesday morning
02/13/14 new stop loss @ 155.65
02/12/14 new stop loss @ 153.45
02/12/14 planned exit to sell half this morning.
LMT gapped higher (+$1.15)
Option opened @ 5.10 -30c spread = $4.80 exit (+115.2%)
02/11/14 Sell Half now to lock in potential gains
(sell half of our position tomorrow morning, Feb. 12, at the open)
02/11/14 new stop loss @ 151.90
02/08/14 new stop loss @ 149.65
02/06/14 triggered at $152.25

chart:

Entry on February 06 at $152.25
Average Daily Volume = 2.4 million
Listed on February 05, 2014


Monster Beverage - MNST - close: 71.59 change: +0.26

Stop Loss: 69.90
Target(s): 77.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/15/14: MNST slowly drifted higher on Friday after gapping down at $71.00 Friday morning. I would still consider new positions here or you could wait for a rally above $72.00 as an alternative entry point.

Earlier Comments:
We want to keep our position size small to limit our risk.

*Small Positions * - Suggested Positions -

Long MAR $75 call (MNST1422C75) entry $2.10

02/14/14 trade opened at $71.00

chart:

Entry on February 14 at $71.00
Average Daily Volume = 1.39 million
Listed on February 13, 2014


Constellation Brands Inc. - STZ - close: 79.37 change: -0.07

Stop Loss: 76.40
Target(s): 84.75
Current Option Gain/Loss: Mar$80c: - 8.8% & Apr$80c: - 3.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/15/14: STZ traded up to new three-week highs near $80 before paring its gains in the last hour on Friday. I would not be surprised to see a dip back toward $78.00, which we can use as a new bullish entry point.

Earlier Comments:
The prior highs near $81.50 could be overhead resistance but we're aiming for $84.75. STZ does not move super fast so you may want to buy the April calls instead of the March calls.

Trigger @ 79.00

- Suggested Positions -

Buy the MAR $80 call (STZ1422C80) entry $1.70

- or -

Buy the APR $80 call (STZ1419D80) entry $3.30

02/13/14 new stop loss @ 76.40
02/12/14 triggered @ 79.00

chart:

Entry on February 12 at $79.00
Average Daily Volume = 1.5 million
Listed on February 11, 2014


United Parcel Service - UPS - close: 97.24 change: +0.68

Stop Loss: 94.40
Target(s): 99.85
Current Option Gain/Loss: +30.6%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/15/14: UPS was showing some relative strength on Friday with a +0.7% gain. That was double the transportation average's +0.33% gain. The next hurdle for UPS bulls is the 100-dma near $98.00.

- Suggested Positions -

Long MAR $95 call (UPS1422C95) entry $1.96

02/13/14 new stop loss @ 94.40
02/11/14 triggered @ 96.15

chart:

Entry on February 11 at $96.15
Average Daily Volume = 4.3 million
Listed on February 08, 2014




PUT Play Updates


Currently we do not have any active put trades.