Editor's Note:

The S&P 500 index continues to struggle with resistance while the small cap Russell 2000 index closed at a new all-time high (by less than one point).

ALKS and CRM were both closed ahead of their earnings reports.
PRGO hit our entry trigger.

PEP has produced a new bearish entry point.


Current Portfolio:


CALL Play Updates

Alaska Air Group - ALK - close: 85.88 change: +0.79

Stop Loss: 81.75
Target(s): 88.00
Current Option Gain/Loss: +60.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/26/14: ALK bounced from the $84.00 level this morning and managed to outperform the market with a +0.9% gain on Wednesday. More conservative traders may want to raise their stop loss again.

The Point & Figure chart for ALK is bullish with a $98 target.

- Suggested Positions -

Long APR 85 call (ALK1419D85) entry $2.50

02/25/14 new stop loss @ 81.75
02/24/14 triggered @ 82.25

Entry on February 24 at $82.25
Average Daily Volume = 818 thousand
Listed on February 22, 2014


Caterpillar Inc. - CAT - close: 97.20 change: +0.79

Stop Loss: 94.85
Target(s): 99.65
Current Option Gain/Loss: + 8.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/26/14: CAT bounced up toward the $98.00 level before paring its gains today. More conservative traders might want to raise their stop loss again. I am not suggesting new positions at this time.

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

02/22/14 adjust exit target to $99.65
02/20/14 new stop loss @ 94.85
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


Centene Corp. - CNC - close: 62.80 change: +0.24

Stop Loss: 61.25
Target(s): 67.75
Current Option Gain/Loss: -40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
02/26/14: CNC managed a +0.3% bounce after yesterday's profit taking. Today's high was $63.45. Readers may want to wait for a new rally above $63.50 before initiating new positions.

Earlier Comments:
Our target is $67.75. More aggressive investors may want to aim higher since the Point & Figure chart for CNC is bullish with a $78 target.

- Suggested Positions -

Long Mar $65 call (CNC1422C65) entry $1.25

02/24/14 triggered @ 63.60

Entry on February 25 at $63.60
Average Daily Volume = 656 thousand
Listed on February 24, 2014


Computer Sciences - CSC - close: 63.30 change: -0.10

Stop Loss: 61.75
Target(s): 68.00
Current Option Gain/Loss: Mar $60c +28.1% & Jun $65c: +25.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/26/14: CSC tagged new multi-year highs with a brief pop above the $64.00 level. I am not suggesting new positions at this time.

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*

02/24/14 new stop loss @ 61.75
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


F5 Networks - FFIV - close: 113.89 change: +3.67

Stop Loss: 108.60
Target(s): 118.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
02/26/14: FFIV was showing relative strength today with a big bounce from the $110 level. The stock managed to tag a new 52-week high on an intraday basis but still closed below resistance at the $114.00 mark.

Traders might want to consider bullish positions if shares can breakout past $115.00.

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: 83.81 change: -0.14

Stop Loss: 81.40
Target(s): 89.75
Current Option Gain/Loss: Mar $85c: - 9.5% & Apr $85c: - 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/26/14: The biotech industry suffered some profit taking today with the BTK index down -1.79% and the IBB biotech ETF off -1.1%. Shares of GILD only slipped -0.16% but if the industry sees any heavy profit taking then GILD will likely following its peers lower. I am not suggesting new positions at this time.

Biotechs can be a volatile group. The only clear support on GILD is the 50-dma, currently near $78.00. I am going to try and reduce our risk by raising the stop loss to $81.40.

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*

02/26/14 new stop loss @ 81.40
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: 60.77 change: -1.08

Stop Loss: 59.75
Target(s): 68.00
Current Option Gain/Loss: +23.5%
Time Frame: exit prior to March option expiration
New Positions: see below

Comments:
02/26/14: IMPV continues to surge higher and outperformed the market with a +3.5% gain. The stock got a boost from some bullish analyst comments. Yet it was a bumpy ride today. The stock sprinted to $63.60, dipped all the way back down to $61.60 and then bounced again in the last hour of trading.

Tonight we are moving the stop loss to $59.75.

Earlier Comments:
The Point & Figure chart for IMPV is bullish with a $77.00 target.

- Suggested Positions -

Long MAR $60 call (IMPV1422c60) entry $3.40*

02/26/14 new stop loss @ 59.75
02/22/14 new stop loss @ 58.65
*option entry price is an estimate since the option did not trade at the time our play was opened.
02/21/14 triggered @ 60.50

Entry on February 21 at $60.50
Average Daily Volume = 264 thousand
Listed on February 18, 2014


Perrigo Co. - PRGO - close: 162.96 change: +1.92

Stop Loss: 159.00
Target(s): 169.50
Current Option Gain/Loss: + 0.0%
Time Frame: Exit prior to March option expiration
New Positions: see below

Comments:
02/26/14: Our new play on PRGO has been triggered. The stock shot higher right out of the gate this morning and hit $166.75 (a +3.5% gain) before profit taking set in. The stock settled with a +1.1% gain.

I don't see any specific news behind today's display of relative strength. Our trigger to buy calls was hit this morning at $162.50. The new high is encouraging but the sharp pullback intraday is actually worrisome.

Earlier Comments:
The plan was to keep position size small to limit risk.

*small positions* - Suggested Positions -

Long MAR $165 call (PRGO1422C165) entry $3.20

02/26/14 triggered @ 162.50

Entry on February 26 at $162.50
Average Daily Volume = 1.3 million
Listed on February 25, 2014


Rockwell Automation - ROK - close: 121.73 change: +0.88

Stop Loss: 117.90
Target(s): 129.00
Current Option Gain/Loss: + 8.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
02/26/14: The slow but nearly non-stop rally in ROK continued on Wednesday with another gain and another high.

While the trend in ROK is bullish I am concerned about the major market indices. If the market accelerates lower it could be tough for ROK to keep up the rally.

- Suggested Positions -

Long APR $125 call (ROK1419D125) entry $1.70

02/25/14 triggered @ 121.25

Entry on February 25 at $121.25
Average Daily Volume = 1.1 million
Listed on February 22, 2014


Constellation Brands Inc. - STZ - close: 81.88 change: -0.19

Stop Loss: 78.75
Target(s): 84.75
Current Option Gain/Loss: Mar$80c: +52.9% & Apr$80c: +24.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
02/26/14: STZ managed to tag another new high before giving in to a little bit of profit taking. I am not suggesting new positions at this time.

Earlier Comments:
STZ does not move super fast so you may want to buy the April calls instead of the March calls.

- Suggested Positions -

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

- or -

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

02/25/14 new stop loss @ 78.75
02/22/14 new stop loss @ 77.80
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




PUT Play Updates

Pepsico, Inc. - PEP - close: 78.65 change: -0.58

Stop Loss: 80.15
Target(s): 74.00
Current Option Gain/Loss: -32.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
02/26/14: Bingo! PEP has finally produced the failed rally move we've been expecting. Shares traded near resistance at $80 and then reversed. Today's move has created a bearish engulfing candlestick reversal pattern. I am suggesting readers use today's move as a new entry point to buy puts. The ask on the April $75 puts is at 65 cents.

- Suggested Positions -

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

02/26/14 today's move looks like a new bearish entry point
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

Alkermes plc. - ALKS - close: 52.71 change: -1.11

Stop Loss: 51.90
Target(s): 59.00
Current Option Gain/Loss: -30.9%
Time Frame: Plan to exit on Feb 26th at the closing bell
New Positions: see below

Comments:
02/26/14: Our plan was to exit today at the closing bell to avoid holding over earnings tomorrow. Unfortunately shares of ALKS underperformed the market with a -2.0% decline.

Our plan was to keep the position size small to limit risk.

*small positions* - Suggested Positions -

Long MAR $55 call (ALKS1422C55) entry $2.10 exit $1.45 (-30.9%)

02/26/14 planned exit at the close
02/25/14 prepare to exit tomorrow at the closing bell.
02/24/14 new stop loss @ 51.90
02/22/14 Our time frame has unexpectedly changed.
ALKS is now expected to report earnings on Feb. 27th. We want to exit prior to the earnings announcement
02/21/14 triggered @ 53.25

chart:

Entry on February 21 at $53.25
Average Daily Volume = 986 thousand
Listed on February 20, 2014


Salesforce.com - CRM - close: 63.66 change: -0.25

Stop Loss: 62.25
Target(s): 67.50
Current Option Gain/Loss: + 9.0%
Time Frame: Exit PRIOR to earnings on Feb. 27th
New Positions: see below

Comments:
02/26/14: CRM tested both its 10-dma and its recent high before closing almost unchanged on the session. Investors were undecided ahead of CRM's earnings report. Our plan was to exit today at the closing bell.

- Suggested Positions -

Mar $62.50 call (CRM1422C62.5) entry $3.30* exit $3.60 (+9.0%)

02/26/14 planned exit at the close
02/25/14 new stop loss @ 62.25, exit tomorrow at the closing bell
02/24/14 new stop @ 61.70
02/24/14 prepare to exit on Wednesday at the close if CRM has not hit our target by then.
02/20/14 new stop loss @ 60.90
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