Editor's Note:

Caution! The market action today looks ominous. The S&P 500 index appears to be forming a bearish reversal at resistance near 1850. The Dow Industrials are reversing near the 50-dma and the 16,200 level. We could be witnessing a potential (short-term?) top in the market. Do not be surprised to see some profit taking tomorrow.

Facebook could see a volatile open tomorrow morning.


Current Portfolio:


CALL Play Updates

Caterpillar Inc. - CAT - close: 96.21 change: -0.35

Stop Loss: 94.40
Target(s): 99.85
Current Option Gain/Loss: - 0.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/19/14: CAT managed to tag a new 52-week high intraday. Shares held up reasonably well with only a 35-cent drop. Look for a dip back toward $95.00 and what should be short-term support at the 10-dma.

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: 116.86 change: -1.02

Stop Loss: 109.75
Target(s): 119.75
Current Option Gain/Loss: +16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/19/14: After big gains yesterday shares of CLR saw some profit taking today but overall it wasn't that bad. I am not suggesting new positions at this time.

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: 63.02 change: -0.71

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:
02/19/14: Hmm... CRM gave back nearly all of yesterday's gains. I suspect we will see CRM test the $62.00 level and/or its 10-dma tomorrow. I am not suggesting new positions. Readers may want to movie 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: 62.54 change: -0.34

Stop Loss: 59.45
Target(s): 68.00
Current Option Gain/Loss: Mar $60c + 6.7% & Jun $65c: + 3.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/19/14: The action in CSC today looks like a potential short-term top. I would expect a pullback tomorrow.

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: 68.06 change: +0.76

Stop Loss: 64.65
Target(s): 69.75
Current Option Gain/Loss: +46.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
02/19/14: If it wasn't for bad luck, we've have no luck at all!

FB displayed relative strength during the regular session and hit an intraday high of $69.08. That was relatively close to our suggested exit target of $69.75. Things were looking up for our FB trade.

Then news hit about FB's new acquisition. After the closing bell tonight it was unveiled that FB is buying WhatsApp for $19 billion. FB is paying $4 billion in cash and $12 billion in stock and another $3 billion in restricted stock to acquire WhatsApp, which is an instant messaging service with 450 million monthly users.

According to Bloomberg this is the biggest Internet deal since Time Warner bought AOL for $124 billion in 2001. What's the draw to WhatsApp? Normally users pay for text messaging on their wireless plans. WhatsApp is an instant message service that is free the first year and only 99 cents a year after that.

It would appear that the reason FB is purchasing WhatsApp is to protect its grasp on being the biggest social network. It's being called a defensive move to buy WhatsApp before someone else did and keep those hundreds of millions from leaving FB's umbrella, especially since Mark Zuckerberg is telling investors they have no plans to try and monetize WhatsApp service with advertising.

Shares of FB plunged after hours and fell -5.7% to $64.18 at its worst levels of the night. Right now FB is trading around $66.20. We can expect a gap down tomorrow. I am adjusting our stop loss to $64.65.

- Suggested Positions -

Long MAR $70 call (FB1422C70) entry $1.27

02/19/14 new stop loss @ 64.65, expect a gap down tomorrow following the WhatsApp acquisition news.
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: 109.65 change: -2.47

Stop Loss: 108.60
Target(s): 118.50
Current Option Gain/Loss: -35.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/19/14: It was not a good day for our FFIV trade. The stock underperformed with a -2.2% plunge toward the $110 area and its 10-dma. I suspect that FFIV will actually hit our stop loss tomorrow at $108.60

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

02/19/14 FFIV looks poised to hit our stop loss tomorrow
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: 82.70 change: -1.11

Stop Loss: 79.75
Target(s): 89.75
Current Option Gain/Loss: Mar $85c: -11.5% & Apr $85c: - 2.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/19/14: GILD slipped back toward the $82 level, which should be new support. Unfortunately both GILD and the biotech index underperformed the broader market today. Is the group losing its leadership status?

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


Imperva Inc. - IMPV - close: 58.35 change: -1.46

Stop Loss: 57.90
Target(s): 68.00
Current Option Gain/Loss: Unopened
Time Frame: exit prior to March option expiration
New Positions: Yes, see below

Comments:
02/19/14: IMPV did not see any follow through on yesterday's rally. If shares breakdown below their 10-dma we'll likely remove it as a candidate.

Earlier Comments:
I am suggesting a trigger to buy calls at $60.50. If triggered our target is $68.00. FYI: The Point & Figure chart for IMPV is bullish with a $77.00 target.

Trigger @ 60.50

- Suggested Positions -

buy the MAR $60 call (IMPV1422c65)

Entry on February -- at $---.--
Average Daily Volume = 264 thousand
Listed on February 18, 2014


Monster Beverage - MNST - close: 73.15 change: +1.14

Stop Loss: 69.90
Target(s): 77.50
Current Option Gain/Loss: +19.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/19/14: MNST continued to show relative strength today with a +1.5% gain. The stock is challenging short-term resistance near last week's high. I am not suggesting new positions at this time.

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: 73.32 change: -0.65

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:
02/19/14: It looks like our SBUX trade may not get off the ground. Yesterday I mentioned the rising price of coffee as a potential headwind for SBUX and its stock price. The rally in coffee prices accelerated today (check out a chart of JO).

Fortunately our SBUX trade is not open yet. If we see SBUX closed below its 200-dma then we'll likely drop it as a bullish candidate.

Earlier Comments:
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: 80.02 change: -0.15

Stop Loss: 77.40
Target(s): 84.75
Current Option Gain/Loss: Mar$80c: + 2.9% & Apr$80c: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/19/14: It was a quiet day for STZ and shares churned on either side of the $80 level. Look for support near $78 if this stock sees a pullback.

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: 95.18 change: -1.31

Stop Loss: 94.40
Target(s): 99.85
Current Option Gain/Loss: -36.2%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/19/14: The transportation stocks have been underperforming the market the last couple of days. UPS and FDX are no exceptions. Shares of UPS gave up -1.35% today and closed near potential round-number support at $95.00. I am worried that we could see UPS hit our stop loss at $94.40 tomorrow. More conservative traders may want to raise their stop. More aggressive traders may want to put their stop below the 200-dma near $92.75 instead and hope UPS bounces before then.

- 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: 77.10 change: -1.08

Stop Loss: 80.15
Target(s): 74.00
Current Option Gain/Loss: +14.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/19/14: The weakness in PEP continues with a -1.38% decline and a clear breakdown below support near $78.00. Traders can use today's move as a new entry point.

- 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