Editor's Note:

The most recent bounce only lasted two days thanks to a widespread sell-off on Tuesday.

BA hit our stop loss.


Current Portfolio:


CALL Play Updates

Express Scripts Holding - ESRX - close: 69.14

Stop Loss: 66.90
Target(s): to be determined
Current Option Gain/Loss: Unopened
Time Frame: 8 to 12 weeks
New Positions: Yes, see below

Comments:
05/20/14: ESRX continued drift higher today and managed to outperform the major indices with a +0.39% gain. We didn't see any news from the company's conference call today.

We're suggesting bullish positions at $69.50 (more conservative traders will want to stick with the $70.50 entry).

Earlier Comments:
ESRX is in the healthcare sector. The company provides pharmacy benefit management (PBM) services in the U.S. and Canada. Both the NASDAQ and shares of ESRX peaked in early March. It would appear that investors considered ESRX one of the higher-growth, momentum names since it has been sinking with that group over the last couple of months.

That big drop you see on ESRX's daily chart was market reaction to its latest earnings news. The results were disappointing. You could call it a trifecta of bad news. ESRX missed Wall Street's estimates on both the top and bottom line. Management guided lower for 2014. Plus they disclosed three separate subpoenas from different state authorities as the company is investigated for its relationship with drug makers.

Investors already had lowered expectations for ESRX's earnings because the company lost UnitedHealth Group (UNH) as a client last quarter. The loss of UNH accounted for about half of ESRX's lost revenues. ESRX complained that a lot of expected new enrollments had been postponed. They didn't see quite the impact from the new Obamacare exchanges previously expected.

It sounds like plenty of bad news for ESRX. Yet here's the interesting part. The stock lost -6% following its earnings report but there was no follow through lower. Investors have been buying the dip. Shares are up two weeks in a row and slowing chewing through resistance. With a drop from $79 to $65 (-17.7%) it is possible that all the bad news is already priced into ESRX stock price. The long-term trend for ESRX is still higher. As the new affordable healthcare policy changes gain momentum it should mean more enrollments for ESRX.

Trigger @ $69.50

- Suggested Positions -

Buy the Aug $70 call (ESRX140816C70) current ask $2.27
option format: symbol-year-month-day-call-strike
05/19/14 adjust entry trigger from $70.50 to $69.50
adjust the strike price to the August $70s.

Entry on May -- at $---.--
Average Daily Volume = 6.5 million
Listed on May 17, 2014


Gilead Sciences - GILD - close: 81.14 change: -0.91

Stop Loss: 77.90
Target(s): to be determined (potentially $85.00)
Current Option Gain/Loss: +41.5%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/20/14: After hitting new relative highs yesterday shares of GILD retreated with a -1.1% decline today. I am not suggesting new positions at this time. More conservative traders may want to use a higher stop loss.

- Suggested Positions -

Long Jun $80 call (GILD1421F80) entry $2.12

05/15/14 new stop @ 77.90, readers may want to exit now to lock in potential gains.
05/10/14 new stop @ 75.75
05/01/14 new stop @ 74.45
04/30/14 triggered @ 77.00

Entry on April 30 at $77.00
Average Daily Volume = 23 million
Listed on April 29, 2014


LyondellBasell Industries - LYB - close: 97.00 change: +0.20

Stop Loss: 93.75
Target(s): to be determined
Current Option Gain/Loss: - 1.9%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
05/20/14: LYB held up reasonably well and eked out another gain on Tuesday. I didn't see any significant headlines surface from its presentation at the Goldman Sachs conference today.

Earlier Comments:
It is possible that the $100.00 level could be round-number resistance but we are aiming higher. The Point & Figure chart for LYB is bullish with a $110 target.

- Suggested Positions -

Long Sep $100 call (LYB140920C100)* entry $2.55**

05/15/14 new stop @ 93.75
05/12/14 LYB gapped open higher at $96.20 (+75 cents)
**option entry price is an estimate since the option did not trade at the time our play was opened.
*I've provided the more standardized option symbol format.
symbol-year-month-day-call-strike

Entry on May 12 at $96.20
Average Daily Volume = 3.1 million
Listed on May 10, 2014


3M Company - MMM - close: 140.23 change: -1.44

Stop Loss: 138.75
Target(s): to be determined
Current Option Gain/Loss: -48.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/20/14: MMM has erased yesterday's bounce and is once again testing support at the $140.00 level. The stock is due to trade ex-dividend tomorrow. That's a potential problem for us. The quarterly dividend is 86 cents. MMM is at $140.23. An 86-cent gap down at the open would be $139.37 and our stop loss is at $139.49. Tonight we're choosing to adjust our stop loss down to $138.75.

I am not suggesting new positions at this time.

- Suggested Positions -

Long Jun $140 call (MMM1421F140) entry $3.45*

05/20/14 adjust stop loss to $138.75 due to the dividend
05/15/14 new stop @ 139.49
05/08/14 triggered @ $142.00

Entry on May 08 at $142.00
Average Daily Volume = 2.65 million
Listed on May 07, 2014


Pacira Pharmaceuticals - PCRX - close: 76.68 change: +0.42

Stop Loss: 69.95
Target(s): to be determined
Current Option Gain/Loss: - 20.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/20/14: PCRX rallied from its intraday lows and closed up +0.5%. Shares look poised to breakout past short-term resistance near $78 soon.

Earlier Comments:
If PCRX does breakout it could see a short squeeze. The most recent data listed short interest at 17% of the 33.6 million share float. This is a somewhat aggressive trade because the option spreads on PCRX are a bit wider than we like. The Point & Figure chart for PCRX is bullish with a $93 target.

- Suggested Positions -

Long Aug $80 call (PCRX1416H80) entry $7.00

05/06/14 triggered on gap higher at $75.32, suggested entry was $74.25

Entry on May 06 at $75.32
Average Daily Volume = 602 thousand
Listed on May 05, 2014


Potasch Corp. of Saskatchewan - POT - close: 37.22 change: +0.32

Stop Loss: 34.90
Target(s): to be determined
Current Option Gain/Loss: + 8.3%
Time Frame: 3 to 4 months
New Positions: see below

Comments:
05/20/14: POT displayed some relative strength today. Traders bought the morning dip and shares gained +0.8%. POT looks ready to breakout past short-term resistance near $37.40-37.50 soon.

- Suggested Positions -

Long Sept $35 call (POT1420i35) entry $2.65

05/15/14 new stop @ 34.90
05/02/14 triggered @ 36.50

Entry on May 02 at $36.50
Average Daily Volume = 5.0 million
Listed on April 26, 2014


Thermo Fisher Scientific, Inc. - TMO - close: 114.47

Stop Loss: 116.75
Target(s): to be determined
Current Option Gain/Loss: Unopened
Time Frame: 8 to 12 weeks
New Positions: Yes, see below

Comments:
05/20/14: It would appear that investors were not happy with TMO's comments at the company's analyst day today. TMO reaffirmed their full year 2014 guidance in the $16.84-17.0 billion range. Wall Street's estimates are at $16.93 billion. The middle of TMO's range is $16.92 billion. It seems like a non-event but shares plunged with a sharp retreat from their 50-dma, down -4% on the session.

We are not changing our strategy yet. The plan is to buy calls at $120.25.

Earlier Comments:
TMO is in the healthcare sector. The company recently acquired Life Technologies making the combined company the world's largest producer of scientific and laboratory equipment.

This is a pretty simple story. TMO has been firing on all cylinders with strong earnings growth. When TMO reported earnings in January the beat Wall Street estimates on both the top and bottom line and raised their 2014 guidance. They did it again on April 23d with its Q1 earnings report beating analyst estimates on the top and bottom line. TMO raised their 2014 EPS guidance again.

Earnings will likely continue to accelerate as the Life acquisition should generate noticeable cost and revenue synergies, potentially worth $85 million in just the first year.

Multiple firms have upgraded the stock. Goldman Sachs recently upgraded TMO due to expectations for strong organic growth. Goldman bumped their price target on TMO from $114 to $153.

Wall Street is bullish on TMO because the company is growing in Asia, specifically China. TMO currently has a goal of achieving 25% of its total revenues from the Asia-Pacific region by 2016.

Technically the stock looks strong too. TMO has a long-term up trend and appears to be breaking out from a three-month bull-flag consolidation pattern. Today's display of relative strength (+1.2%) is also a breakout above its 50-dma.

We do see potential resistance at $120. Therefore we're suggesting a trigger to buy calls at $120.25. If triggered we will start with a stop loss at $116.75.

Trigger @ $120.25

- Suggested Positions -

Buy the Sep $125 call (TMO140920C125)

symbol-year-month-day-call-strike

Entry on May -- at $---.--
Average Daily Volume = 2.0 million
Listed on May 19, 2014


United Parcel Service - UPS - close: 100.53 change: -0.86

Stop Loss: 97.75
Target(s): to be determined
Current Option Gain/Loss: + 16.6%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/20/14: Shares of UPS follows the transportation stocks lower and lost -0.84% on Tuesday. The stock is testing its 10-dma and could test round-number support at the $100.00 mark soon. I am not suggesting new positions at this time.

More conservative traders may want to raise their stop loss but I would keep it below $100.

We're not setting an exit target yet but the Point & Figure chart for UPS is bullish with a $114 target.

- Suggested Positions -

Long Jul $100 call (UPS140719C100)* entry $1.98

05/12/14 triggered @ 100.25
*I've provided the more standardized option symbol format.
symbol-year-month-day-call-strike

Entry on May 12 at $100.25
Average Daily Volume = 2.9 million
Listed on May 10, 2014


Ventas, Inc. - VTR - close: 67.27 change: -0.17

Stop Loss: 66.75
Target(s): to be determined
Current Option Gain/Loss: + 5.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/20/14: VTR held up better than most with only a -0.25% decline today. If there is any follow through lower tomorrow we could see shares hit our stop loss at $66.75.

- Suggested Positions -

Long Aug $65 call (VTR1416H65) entry $2.75

05/19/14 new stop @ 66.75
05/12/14 readers may want to exit early right now
05/10/14 new stop @ 65.75
05/01/14 triggered @ 66.35

Entry on May 01 at $66.35
Average Daily Volume = 1.6 million
Listed on April 28, 2014




PUT Play Updates

Athenahealth, Inc. - ATHN - close: 114.36 change: -0.19

Stop Loss: 124.05
Target(s): to be determined
Current Option Gain/Loss: Jun$100put -29.2% & Sep100put: - 7.2%
Time Frame: 4 to 12 weeks
New Positions: see below

Comments:
05/20/14: ATHN spiked down to $110.73 and bounced. The 19-cent loss is virtually unchanged for ATHN. I am not suggesting new positions at this time. The last two days have seen ATHN's bearish momentum stall a bit.

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

*small positions* - Suggested Positions -

Long Jun $100 PUT (ATHN140621P100) entry $2.05**

- or -

Long Sep $100 PUT (ATHN140920P100) entry $6.90**

05/15/14 trade opened on gap down at $115.66
**option entry price is an estimate since the option did not trade at the time our play was opened.
*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike

Entry on May 15 at $115.66
Average Daily Volume = 1.5 million
Listed on May 14, 2014


Discovery Communications - DISCA - close: 73.73 change: +0.06

Stop Loss: 75.05
Target(s): to be determined
Current Option Gain/Loss: -40.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/20/14: I am starting to worry about our DISCA trade. The bearish momentum seems to have stalled a bit. Most of the market was down today but DISCA managed to close virtually unchanged.

After the closing bell tonight DISCA has announced a stock split in the form of a special dividend. They're not calling it a stock split but for any shareholders who own the class A, class B, or class C shares of Discovery stock on July 28th, 2014, they will receive a share of class C stock on or about August 6th, 2014.

I am not suggesting new bearish positions at the moment.

Earlier Comments:
We're not setting a target yet but the Point & Figure chart for DISCA is bearish with a $59 target.

- Suggested Positions -

Long Jul $70 PUT (DISCA140719P70)* entry $1.60**

05/14/14 triggered @ 72.25
**option entry price is an estimate since the option did not trade at the time our play was opened.
*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike

Entry on May 14 at $72.25
Average Daily Volume = 1.63 million
Listed on May 10, 2014


Chart Industries - GTLS - close: 71.24 change: -2.08

Stop Loss: 75.55
Target(s): to be determined
Current Option Gain/Loss: - 12.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/20/14: GTLs is finally starting to show some momentum lower. The stock fell -2.8% today after failing at its 30-dma this morning. I would consider new positions at current levels.

Earlier Comments:
More conservative traders could wait for a drop under $71.00 as an alternative entry point.

FYI: The Point & Figure chart for GTLS is currently bullish but a drop below $71.00 would produce a new triple-bottom breakdown sell signal.

- Suggested Positions -

Long Jun $70 PUT (GTLS140621P70) entry $2.25

05/16/14 trade begins. GTLS opened at $72.34
*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike

Entry on May 16 at $72.34
Average Daily Volume = 652 thousand
Listed on May 15, 2014


Lumber Liquidators - LL - close: 81.06 change: -0.84

Stop Loss: 84.05
Target(s): to be determined
Current Option Gain/Loss: -22.2%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
05/20/14: Traders bought the dip in shares of LL near round-number support at $80 this morning (actually the low was $79.50). LL still underperformed the broader market with a -1.0% decline and remains under technical resistance at its 10-dma.

The late April low was $78.92. I would wait for LL to trade below this level before initiating new bearish positions.

Earlier Comments:
I do consider a more aggressive trade because of LL's short interest. The most recent data listed short interest at 25% of the small 24.3 million share float, which raises the risk of a short squeeze. I am not setting a target yet. The P&F chart is bearish and forecasting at $72 target.

*small positions* - Suggested Positions -

Long Aug $75 PUT (LL140816P75) entry $4.50**

05/15/14 triggered @ 79.75
**option entry price is an estimate since the option did not trade at the time our play was opened.
*I've provided the more standardized option symbol format.
symbol-year-month-day-call-strike

Entry on May 15 at $79.75
Average Daily Volume = 888 thousand
Listed on May 14, 2014


Whole Foods Market, Inc. - WFM - close: 37.18

Stop Loss: 40.25
Target(s): to be determined
Current Option Gain/Loss: +15.8%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
05/20/14: The selling pressure in WFM continues. The stock is below the May 7th intraday low, which is good news for the bears. I do not see any changes from my prior comments.

Earlier Comments:
WFM is in the services sector. The company runs a grocery chain focused on natural and organic foods. As of May 2014 they had 379 stores. Unfortunately their success in the higher-margin organic foods has fueled significant competition.

The stock has been sinking for months as investors worried about growing competition. WFM's recent earnings report confirmed their fears. The stock crashed -19% after WFM missed estimates on both the top and bottom line and confessed they were facing tougher rivals. Management then lowered their 2014 guidance.

WFM said revenues still grew +10% and their same-store comparable sales were up +4.5%. Unfortunately profits were relatively flat and margins are getting squeezed with higher cost of goods sold and rising capex.

WFM is facing competition on all sides. Sprouts Farmers Market (SFM), The Fresh Market (TFM), Kroger (KR), Wal-mart (WMT), and regional competitors like HEB and Trader Joe's are all jumping on the organic and natural food bandwagon.

- Suggested Positions -

Long Aug $35 PUT (WFM140816P35) entry $1.01

05/19/14 trade begins. WFM opens at $37.89

Entry on May 19 at $37.89
Average Daily Volume = 9.2 million
Listed on May 17, 2014



CLOSED BULLISH PLAYS

The Boeing Company - BA - close: 131.35 change: +0.54

Stop Loss: 129.40
Target(s): to be determined
Current Option Gain/Loss: -47.2%
Time Frame: 6 to 9 weeks
New Positions: see below

Comments:
05/20/14: The action in BA today was almost identical to the move in the Dow Jones Industrial Average. The index's weakness pulled BA below support at $130. Shares hit our stop at $129.40.

- Suggested Positions -

Jul $135 Call (BA1419G135) entry $2.75 exit $1.45 (-47.2%)

05/20/14 stopped out
05/13/14 new stop @ 129.40
05/05/14 triggered at $132.00

chart:

Entry on May 05 at $132.00
Average Daily Volume = 3.7 million
Listed on May 03, 2014