Editor's Note:

The stock market reversed sharply lower on Friday after the S&P 500 hit a new record high earlier in the week.

PSX hit our entry trigger. RAX hit our stop loss.


Current Portfolio:


CALL Play Updates

Alaska Air Group - ALK - close: 92.33 change: -2.48

Stop Loss: 90.75
Target(s): 99.75
Current Option Gain/Loss: -30.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/05/14: It was an ugly day for the stock market on Friday and ALK fell -2.6% to close between technical support at its 10-dma and 20-dma. The low on Friday was $91.69. Our stop is at $90.75. More conservative traders may want to adjust theirs closer toward the $91.40 area.

- Suggested Positions -

Long May $95 call (ALK1417E95) entry $3.45

04/02/14 triggered @ 94.25

chart:

Entry on April 02 at $94.25
Average Daily Volume = 692 thousand
Listed on March 31, 2014


ASML Holdings - ASML - close: 90.82 change: -1.35

Stop Loss: 89.75
Target(s): 99.50
Current Option Gain/Loss: -57.8%
Time Frame: exit prior to earnings on April 16th
New Positions: see below

Comments:
04/05/14: ASML gave up -1.4% on Friday with a dip toward its 30-dma. Shares should find support near $90.00 with its simple 200-dma at $90.17. Nimble traders could watch for a bounce from $90.00 as a new entry point. Keep in mind we plan to exit prior to earnings on April 16th.

FYI: The Point & Figure chart for ASML is bullish with a $104 target.

- Suggested Positions -

Long Apr $95 call (ASML1419D95) entry $1.90*

03/19/14 triggered @ 92.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on March 19 at $92.25
Average Daily Volume = 1.6 million
Listed on March 18, 2014


Chicago Bridge & Iron - CBI - close: 86.07 change: -1.08

Stop Loss: 85.45
Target(s): 94.75
Current Option Gain/Loss: -26.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/05/14: The action in CBI is starting to feel like a short-term top. Shares tagged another new all-time on an intraday basis only to reverse lower again. The stock closed near its 10-dma on Friday. We are going to try and reduce our risk by moving the stop loss to $85.45. More aggressive traders will want to consider keeping their stop below the $85.00 mark, which may end up being round-number support. I am not suggesting new positions at this time.

Our target is $94.75. More conservative traders may want to exit near $90.00, which could be potential round-number resistance.

- Suggested Positions -

Long Apr $85 call (CBI1419D85) entry $2.80

04/05/14 new stop @ 85.45
04/03/14 new stop @ 83.75
03/29/14 new stop @ 82.85
03/26/14 new stop @ 81.30
03/18/14 adjust exit target from $89.50 to $94.75
03/04/14 triggered @ 84.50

chart:

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


Deere & Co - DE - close: 91.83 change: -0.23

Stop Loss: 90.75
Target(s): 98.50
Current Option Gain/Loss: -14.4%
Time Frame: exit PRIOR to earnings on May 14th
New Positions: see below

Comments:
04/05/14: After a five-day bounce DE closed with a loss. Friday's -0.24% decline was a lot better than the -1.25% in the S&P 500. However, the drop from its Friday morning highs make the move look like a potential short-term reversal.

We are going to try and reduce our risk by moving our stop loss to $90.75. More aggressive traders may want to keep their stop below $90.00 instead since $90.00 could prove to be support.

- Suggested Positions -

Long May $95 call (DE1417E95) entry $1.04

04/05/14 new stop @ 90.75
04/03/14 triggered @ 92.25

chart:

Entry on April 03 at $92.25
Average Daily Volume = 3.0 million
Listed on April 02, 2014


Halliburton Company - HAL - close: 59.31 change: -0.49

Stop Loss: 57.75
Target(s): to be determined
Current Option Gain/Loss: -22.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/05/14: Like so many stocks on Friday, HAL hit new relative highs on Friday morning only to reverse lower and close on its lows for the session. The move has created a bearish engulfing candlestick reversal pattern. I would watch the 10-dma, near $59.00, for short-term support.

- Suggested Positions -

Long May $60 call (HAL1417E60) entry $2.10*

04/03/14 triggered @ 60.25

chart:

Entry on April 03 at $60.25
Average Daily Volume = 7.7 million
Listed on March 29, 2014


Lockheed Martin - LMT - close: 159.61 change: -4.14

Stop Loss: 158.95
Target(s): to be determined
Current Option Gain/Loss: Apr$160c: -42.1% & Jun$165c: -20.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
04/05/14: Ouch! It was a frustrating day for LMT bulls. The stock erased four days of gains with a plunge to technical support at its simple 50-dma. If there is any follow through lower on Monday we will likely see LMT hit our stop at $158.95.

- Suggested Positions -

Long Apr $160 call (LMT1419D160) entry $3.20

- or -

Long Jun $165 call (LMT1421F165) entry $3.40*

04/02/14 new stop @ 158.95
03/29/14 new stop @ 157.90
03/25/14 triggered @ 160.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on March 25 at $160.75
Average Daily Volume = 2.0 million
Listed on March 24, 2014


3M Company - MMM - close: 135.86 change: -0.28

Stop Loss: 133.85
Target(s): to be determined.
Current Option Gain/Loss: +16.9%
Time Frame: Exit PRIOR to earnings on April 24th
New Positions: Yes, see below

Comments:
04/05/14: MMM was not immune to the market's drop on Friday but shares only lost -0.2% versus much bigger declines across the market. Friday's move does look like a potential short-term reversal. I would not be surprised to see a dip to $135.00 or its 10-dma near $134.70. Tonight we're moving the stop loss to $133.85.

- Suggested Positions -

Long May $135 call (MMM1417E135) entry $2.95*

04/05/14 new stop @ 133.85
04/01/14 new stop @ 131.90
03/26/14 triggered @ 134.66, suggested entry was $134.65
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on March 26 at $134.65
Average Daily Volume = 3.0 million
Listed on March 25, 2014


Phillips 66 - PSX - close: 79.57 change: -1.03

Stop Loss: 78.70
Target(s): to be determined
Current Option Gain/Loss: -26.1%
Time Frame: Exit PRIOR to earnings on April 30th
New Positions: see below

Comments:
04/05/14: The market's rally on Friday morning helped push PSX to a new high and shares hit our suggested entry point at $81.10. Unfortunately as the market turned lower on Friday so did PSX. Technically Friday's move has created a bearish engulfing candlestick reversal pattern. I would wait on initiating new positions.

- Suggested Positions -

Long May $80 call (PSX1417E80) entry $3.25*

04/04/14 triggered @ 81.10
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on April 04 at $81.10
Average Daily Volume = 3.1 million
Listed on April 03, 2014


QUALCOMM Inc. - QCOM - close: 78.53 change: -2.02

Stop Loss: 77.75
Target(s): to be determined
Current Option Gain/Loss: -32.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/05/14: Friday was an ugly day for shares of QCOM. The stock reversed about a week's worth of gains with a -2.5% plunge on Friday. The close below its simple 10-dma is short-term bearish. I am not suggesting new positions at this time.

Earlier Comments:
The $80.00 level could be round-number, psychological resistance. Therefore we're suggesting a trigger to buy calls at $80.25. We're not setting an exit target yet but the Point & Figure chart for QCOM is bullish with a $90 target.

- Suggested Positions -

Long May $80 call (QCOM1417E80) entry $2.30

04/02/14 triggered @ 80.25

chart:

Entry on April 02 at $80.25
Average Daily Volume = 10.5 million
Listed on March 29, 2014




PUT Play Updates

LinkedIn Corp. - LNKD - close: 165.83 change: -11.14

Stop Loss: 170.85
Target(s): 161.00
Current Option Gain/Loss: +111.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
04/05/14: The sell-off in LNKD is accelerating with a -6.29% plunge on Friday. The stock is down about $24.00 for the week. I would not chase LNKD here. We are moving our stop loss down to $170.85 but more conservative traders may want to just take profits now since the option has risen to $17.15/17.50. The newsletter's exit target is $161.00.

Earlier Comments:
The plan was to use small positions to limit our risk.

*small positions* - Suggested Positions -

Long MAY $175 PUT (LNKD1417Q175) entry $8.10

04/05/14 new stop @ 170.85
04/01/14 trade opens on gap higher at $185.00

chart:

Entry on April 01 at $185.00
Average Daily Volume = 2.5 million
Listed on March 31, 2014


CLOSED BEARISH PLAYS

Rackspace Hosting - RAX - close: 32.47 change: +0.78

Stop Loss: 33.25
Target(s): to be determined
Current Option Gain/Loss: -29.4%
Time Frame: Exit PRIOR to earnings in early May
New Positions: see below

Comments:
04/05/14: RAX bucked the market's down trend on Friday with a gain thanks to rumors that RAX was a takeover target by IBM. Nervous shorts covered and the stock spiked up to its 20-dma near $33.82 before paring gains. Our stop was hit at $33.25.

- Suggested Positions -

MAY $30 PUT (RAX1417Q30) entry $1.56 exit $1.10* (-29.4%)

04/04/14 stopped out
*option exit price is an estimate since the option did not trade at the time our play was closed.
04/02/14 triggered @ 31.90

chart:

Entry on April 02 at $31.90
Average Daily Volume = 2.2 million
Listed on April 01, 2014