Editor's Note:

Stocks drifted sideways on Tuesday as markets digested more disappointing economic data. The NAHB housing market index and New York Empire State fed survey both declined.

CLR and PEP hit our entry triggers. LMT was closed this morning.


Current Portfolio:


CALL Play Updates

Caterpillar Inc. - CAT - close: 96.56 change: +0.01

Stop Loss: 94.40
Target(s): 99.85
Current Option Gain/Loss: + 9.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/18/14: Tuesday was a quiet day for stocks and especially so for shares of CAT, which closed almost unchanged for the session. Tonight we're adjusting our stop loss up to $94.40.

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

02/18/14 new stop loss @ 94.40
02/13/14 planned entry at the opening bell
CAT gapped down at $95.29

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


Continental Resources - CLR - close: 117.88 change: +4.61

Stop Loss: 109.75
Target(s): 119.75
Current Option Gain/Loss: +33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/18/14: Our new play on CLR is off to a strong start with a +4.0% rally today. Our plan was to buy calls at $113.75 but shares gapped open higher at $114.38 this morning. I am raising the stop loss to $111.75.

The intraday high today was $118.48. Our short-term target remains $119.75. More aggressive traders may want to aim higher.

NOTE: CLR is due to report earnings in the next two to three weeks (very late February or early March) and we will plan to exit prior to the announcement.

- Suggested Positions -

Long MAR $120 call (CLR1422C120) entry $3.00 *

02/18/14 trade opened on gap higher at $114.38. Suggested trigger was $113.75.
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on February 18 at $114.38
Average Daily Volume = 1.1 million
Listed on February 15, 2014


Salesforce.com - CRM - close: 63.73 change: +0.93

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: +15.1%
Time Frame: Exit PRIOR to earnings on Feb. 27th
New Positions: see below

Comments:
02/18/14: Traders bought the dip in CRM this morning and shares eventually outperformed the broader market with a +1.48% gain today. Readers may want to start moving their stop loss higher.

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.

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


Computer Sciences - CSC - close: 62.88 change: +1.16

Stop Loss: 59.45
Target(s): 68.00
Current Option Gain/Loss: Mar $60c +17.4% & Jun $65c: + 7.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/18/14: CSC also displayed relative strength today with a +1.8% gain. The stock shot higher this morning and closed at new multi-year highs.

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.

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


Facebook, Inc. - FB - close: 67.30 change: +0.21

Stop Loss: 64.25
Target(s): 69.75
Current Option Gain/Loss: +30.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/18/14: FB bounced off the $67.00 level this morning and eked out a small gain. I am adjusting our stop loss higher to $64.25. More conservative traders may want to move theirs higher but we're going to try and keep ours just below the simple 10-dma (currently at $64.60).

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

02/18/14 new stop loss @ 64.25
02/13/14 new stop loss @ 63.85
02/11/14 triggered @ 64.75

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


F5 Networks - FFIV - close: 112.12 change: +0.21

Stop Loss: 108.60
Target(s): 118.50
Current Option Gain/Loss: - 4.4%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/18/14: Shares of FFIV continued to drift sideways on Tuesday. Look for support near $110 or its 10-dma if the market dips.

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

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


Gilead Sciences - GILD - close: 83.81 change: +2.60

Stop Loss: 79.75
Target(s): 89.75
Current Option Gain/Loss: Mar $85c: +10.0% & Apr $85c: +13.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/18/14: Shares of GILD shot higher today with a +3.2% gain. That's welcome news since the recent sideways action was starting to worry us. GILD closed just below its all-time high set in January at $84.40.

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.

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


Monster Beverage - MNST - close: 72.01 change: +0.42

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:
02/18/14: MNST drifted higher on Tuesday after bouncing from the $71.00 level this morning. I would still consider new positions here at current levels.

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

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


Starbucks Corp. - SBUX - close: 73.97 change: -1.06

Stop Loss: 73.95
Target(s): 79.00 & 81.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Comments:
02/18/14: Uh-oh! Coffee prices saw a big move higher today. The JO coffee ETN surged +9% today as coffee prices hit 13-month highs. Worries are growing over the Brazilian coffee harvest. According to an IBD report a hot 2014 January with the weakest rainfall in 20 years in Brazil is pushing coffee futures higher. Arabica coffee futures are trading around $1.50 a pound. That's almost +50% from their November 2013 low.

If this is a short-term spike then coffee prices for the major U.S. coffee companies will likely not be affected but if coffee continues to rise then companies like SBUX may feel the need to raise their prices.

Shares of SBUX underperformed the market today with a -1.4% decline. Currently we are still on the sidelines. We are suggesting traders wait for a breakout over $76.00. I'm listing a suggested entry point at $76.15. If triggered I am setting two potential targets. Our conservative target is $79.00. Our more aggressive target is $81.75.

Trigger @ 76.15

- Suggested Positions -

Buy the Mar $77.50 call (SBUX1422C77.5)

- or -

Buy the Apr $80 call (SBUX1419D80)

Entry on February -- at $---.--
Average Daily Volume = 8.1 million
Listed on February 15, 2014


Constellation Brands Inc. - STZ - close: 80.17 change: +0.80

Stop Loss: 77.40
Target(s): 84.75
Current Option Gain/Loss: Mar$80c: +11.7% & Apr$80c: + 6.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/18/14: STZ is still bubbling higher with a +1.0% gain on Tuesday. I am raising our stop loss up to $77.40.

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

02/18/14 new stop loss @ 77.40
02/13/14 new stop loss @ 76.40
02/12/14 triggered @ 79.00

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


United Parcel Service - UPS - close: 96.49 change: +0.75

Stop Loss: 94.40
Target(s): 99.85
Current Option Gain/Loss: - 0.5%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/18/14: Hmm... UPS saw a little bit of volatility today. The stock spiked up to $98 and tagged technical resistance at its simple 100-dma this morning. Just as quickly the stock reversed and traded down toward the $96 area by early afternoon. I am not suggesting new positions at this time.

- Suggested Positions -

Long MAR $95 call (UPS1422C95) entry $1.96

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

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




PUT Play Updates

Pepsico, Inc. - PEP - close: 78.18 change: +0.09

Stop Loss: 80.15
Target(s): 74.00
Current Option Gain/Loss: - 8.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/18/14: Our new play on PEP has been triggered. The stock broke down below what should have been support at $78.0 and hit a low of $77.78. Our suggested trigger to buy puts was hit at $77.85. Unfortunately PEP rebounded and closed back above the $78.00 level. I would wait for a new low below $77.78 before initiating new positions.

- Suggested Positions -

Long APR $75 PUT (PEP1419P75) entry $0.95*

02/18/14 triggered @ 77.85
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on February 18 at $77.85
Average Daily Volume = 5.7 million
Listed on February 15, 2014



CLOSED BULLISH PLAYS

Lockheed Martin - LMT - close: 162.70 change: -0.19

Stop Loss: 155.65
Target(s): 165.00
Current Option Gain/Loss: +245.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/18/14: Our plan was to exit positions at the opening bell this morning to lock in potential gains. LMT gapped down at $161.53 this morning (a -$1.36 drop). The option gapped down as well.

- Suggested *small* Positions -

MAR $155 call (LMT1422C155) entry $2.23 exit $7.70 (+245.2%)

02/18/14 planned exit this morning. LMT gapped down at $161.53
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