Editor's Note:

The U.S. stock market hit the pause button to catch its breath after yesterday's surge higher.

We want to exit our CAT and CSC trades immediately tomorrow morning.


Current Portfolio:


CALL Play Updates

BorgWarner Inc. - BWA - close: 62.02 change: +1.22

Stop Loss: 59.90
Target(s): 67.50
Current Option Gain/Loss: Unopened
Time Frame: exit prior to April expiration
New Positions: Yes, see below

Comments:
03/05/14: BWA did not see any follow through on yesterday's rally. Shares actually underperformed the market today but they remain near their highs in the $62 area.

Yesterday I had a few typos on this trade description. Originally we were looking at CTSH as a potential trade and then decided to wait until after CTSH had its 2-for-1 stock split coming up in a few days. Some of the numbers between CTSH and BWA were mixed. I apologize.

We want to use a trigger to buy calls on BWA at $62.25. If triggered we'll use a stop loss at $59.90. Our initial target is $67.50.

Trigger @ 62.25

- Suggested Positions -

Buy the Apr $65 call (BWA1419D65)

03/05/14 corrected some numbers on the entry point, target and stop loss.
Use a trigger @ 62.25. Use a stop at $59.90. Target 67.50

Entry on March -- at $---.--
Average Daily Volume = 2.0 million
Listed on March 04, 2014


Caterpillar Inc. - CAT - close: 96.37 change: -0.65

Stop Loss: 94.85
Target(s): 99.65
Current Option Gain/Loss: -45.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/05/14: We have been patient with CAT as it consolidated sideways last week. This week we're starting to worry. Today is the second time in three sessions that CAT has closed below its simple 10-dma. Tonight we're suggesting an immediate exit tomorrow morning.

small positions - Suggested Positions -

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

03/05/14 prepare to exit immediately tomorrow morning
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


Chicago Bridge & Iron - CBI - close: 84.45 change: -0.38

Stop Loss: 80.90
Target(s): 89.50
Current Option Gain/Loss: +3.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/05/14: CBI dipped toward the $84.00 level today. I would still consider new bullish positions here. However, you could wait and hope for a dip near the 10-dma instead. An alternative entry point would be a rally above today's high (85.24).

Earlier Comments:
Our target is $89.50. More aggressive investors could aim higher since the Point & Figure chart for CBI is bullish with a $111 target.

- Suggested Positions -

Long Apr $85 call (CBI1419D85) entry $2.80

03/04/14 triggered @ 84.50

Entry on March 04 at $84.50
Average Daily Volume = 1.16 million
Listed on March 01, 2014


Centene Corp. - CNC - close: 63.15 change: -0.73

Stop Loss: 61.75
Target(s): 67.75
Current Option Gain/Loss: -48.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
03/05/14: CNC retreated -1.1% but seemed to find some short-term support near $63.00. I am not suggesting new positions at this time.

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

03/01/14 new stop loss @ 61.75
02/24/14 triggered @ 63.60

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


Rockwell Collins Inc. - COL - close: 83.01 change: -0.47

Stop Loss: 81.75
Target(s): 89.50
Current Option Gain/Loss: Unopened
Time Frame: exit prior to April expiration
New Positions: Yes, see below

Comments:
03/05/14: The rally in COL failed at the $84 level for a second day in a row. Technically today's move looks like a potential reversal pattern. Look for short-term support near $82.00 or its 10-dma. Currently we're still on the sidelines. I am suggesting a trigger to buy calls at $84.15. If triggered our target is $89.50. FYI: The Point & Figure chart for COL is bullish with a $106 target.

Trigger @ 84.15

- Suggested Positions -

Buy the APR $85 call (COL1419D85)

Entry on March -- at $---.--
Average Daily Volume = 915 thousand
Listed on March 04, 2014


Computer Sciences - CSC - close: 62.55 change: -0.45

Stop Loss: 61.75
Target(s): 68.00
Current Option Gain/Loss: Mar $60c - 5.6% & Jun $65c: - 0.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
03/05/14: I am starting to grow concerned over our CSC trade. The long-term trend is up but short-term momentum is starting to reverse. Tonight I am suggesting an immediate exit tomorrow morning. We can revisit CSC again if shares test support near $60.00.

- Suggested Positions -

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

- or -

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

03/05/14 prepare to exit at the open tomorrow
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


Intl. Flavors & Fragrances - IFF - close: 95.28 change: -0.70

Stop Loss: 92.40
Target(s): 99.50
Current Option Gain/Loss: +46.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/05/14: After strong gains yesterday IFF hit some profit taking today with a -0.7% decline. Look for potential support near $94.00.

- Suggested Positions -

Long Apr $95 call (IFF1419D95) entry $1.50

03/04/14 new stop loss @ 92.40
02/28/14 triggered @ 93.65

Entry on February 28 at $93.65
Average Daily Volume = 410 thousand
Listed on February 27, 2014


Imperva Inc. - IMPV - close: 65.00 change: +2.76

Stop Loss: 59.75
Target(s): 68.00
Current Option Gain/Loss: +55.8%
Time Frame: exit prior to March option expiration
New Positions: see below

Comments:
03/05/14: IMPV was a big winner today with a +4.4% surge to new highs. The rally stalled at round-number resistance near $65.00. More conservative traders may want to take some money off the table. I am not suggesting new positions at this time.

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


Lockheed Martin - LMT - close: 166.82 change: +1.18

Stop Loss: 159.90
Target(s): 169.75 & 174.75
Current Option Gain/Loss: +19.0%
Time Frame: exit prior to April option expiration
New Positions: see below

Comments:
03/05/14: LMT continues to push higher and shares may have received a little boost from some bullish analyst comments today. The stock is nearing potential resistance at its recent February highs ($167.40-168.40 area).

We have two different targets. Our conservative target is $169.75. Our more aggressive target is $174.75. FYI: The Point & Figure chart for LMT is very bullish with a $221 target.

- Suggested Positions -

Long Apr $165 call (LMT1419D165) entry $4.20

03/04/14 triggered @ 164.35

Entry on March 04 at $164.35
Average Daily Volume = 2.3 million
Listed on March 03, 2014


Perrigo Co. - PRGO - close: 166.95 change: -0.65

Stop Loss: 162.75
Target(s): 169.50
Current Option Gain/Loss: +56.2%
Time Frame: Exit prior to March option expiration
New Positions: see below

Comments:
03/05/14: The rally in PRGO took the day off with a sideways move. The simple 10-dma has risen to $163.50. We will adjust our stop loss to $162.75.

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

03/05/14 new stop loss @ 162.75
02/26/14 triggered @ 162.50

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


Rock-Tenn Co. - RKT - close: 113.47 change: -1.03

Stop Loss: 109.65
Target(s): 119.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/05/14: Shares of RKT saw some profit taking today (-0.89%) after big gains yesterday. RKT might try and fill the gap before moving higher. That could mean a dip toward the $111 area.

Earlier Comments:
Our target is $119.50. FYI: The Point & Figure chart for RKT is bullish with a $129 target.

- Suggested Positions -

Long APR $115 call (RKT1419D115) entry $3.10*

03/04/14 new stop loss @ 109.65
03/04/14 triggered on gap higher at $113.35, trigger was 112.00
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on March 04 at $113.35
Average Daily Volume = 809 thousand
Listed on March 01, 2014


Rockwell Automation - ROK - close: 123.49 change: -0.51

Stop Loss: 119.40
Target(s): 125.00
Current Option Gain/Loss: +41.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
03/05/14: ROK spent Wednesday's session consolidating sideways in a narrow range. Traders may want to consider raising their stop or taking some money off the table.

- Suggested Positions -

Long APR $125 call (ROK1419D125) entry $1.70

03/04/14 adjust exit target to $125.00
03/01/14 new stop loss @ 119.40
02/27/14 new stop loss @ 118.75
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: 82.73 change: +0.22

Stop Loss: 79.65
Target(s): 84.75
Current Option Gain/Loss: Mar$80c: +67.6% & Apr$80c: +36.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
03/05/14: STZ held up reasonably well today with shares finding support near $82.00. 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

03/01/14 new stop loss @ 79.65
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


Domtar Corp. - UFS - close: 110.91 change: +0.12

Stop Loss: 107.90
Target(s): 118.00
Current Option Gain/Loss: -11.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/05/14: UFS spent today's session drifting sideways inside a narrow range. Today's high was $111.24. Readers may want to wait for a rally above today's high before initiating new positions.

Earlier Comments:
Our target is $118.00. The Point & Figure chart for UFS is bullish with a $135 target.

- Suggested Positions -

Long APR $115 call (UFS1419D115) entry $2.10*

02/28/14 triggered @ 110.50
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on February 28 at $110.50
Average Daily Volume = 817 thousand
Listed on February 26, 2014


Vulcan Materials - VMC - close: 68.20 change: -0.81

Stop Loss: 66.25
Target(s): 74.50
Current Option Gain/Loss: -27.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
03/05/14: I cautioned readers last night that we could see VMC dip back toward the $68.50 area. Shares fell to $67.93 at its low today. We can use this dip or use a bounce from current levels as a new entry point to buy calls.

- Suggested Positions -

Long APR $70 call (VMC1419D70) entry $2.35*

03/04/14 triggered on gap higher at $69.31. Suggested trigger was $68.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on March 04 at $69.31
Average Daily Volume = 1.1 million
Listed on March 03, 2014




PUT Play Updates

Green Mountain Coffee Roasters - GMCR - close: 110.54 change: +1.92

Stop Loss: 113.55
Target(s): 101.00
Current Option Gain/Loss: +45.3%
Time Frame: Exit prior to March option expiration
New Positions: see below

Comments:
03/05/14: Buyers are putting up a fight in GMCR. The stock slipped to a new relative low beneath $107.00 this morning. Yet by 10:30 the stock was rebounding. The rally lost steam midday but shares did outpace the broader market with a +1.76% gain. The intraday high was $112.49. We are adjusting our stop loss down to $113.55.

Earlier Comments:
GMCR can be a volatile stock so we consider any trades to be more aggressive and higher risk. Use small positions to limit risk.

*small positions* - Suggested Positions -

Long MAR $110 PUT (GMCR1422o110) entry $2.58*

03/05/14 new stop loss @ 113.55
03/01/14 new stop loss @ 115.05
02/27/14 triggered @ 114.65
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on February 27 at $114.65
Average Daily Volume = 6.7 million
Listed on February 26, 2014