Option Investor

Daily Newsletter, Tuesday, 2/10/2015

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Bulls Gaining Confidence

by Jim Brown

Click here to email Jim Brown

The S&P closed over short term resistance and the Nasdaq hit a six week high and the S&P Midcap 400 is only 2 points from a new high. Headlines about Greece, China, Russia, Europe, ISIS and the strong dollar's impact to earnings are all fading from investor's minds as the market climbs the wall of worry.

Market Statistics

Monday's decline was blamed on Greece but in reality it was probably just profit taking from the prior week's gains. The Greek situation certainly did not improve today so if anything it should still be a cloud over the market.

If you remember the last several times Greece was a major market headline back when they were getting the original bailout funds the market grew bored with the daily chatter and finally ignored it completely. I think the boredom threshold was even lower this time even though the potential for disaster is even greater. If Greece does implode in the next couple of weeks the headline flurry could still impact the market but for today it is still just a war of words between the newly elected Greek government and the EU/IMF/ECB. Traders don't really see how it is going to impact the U.S. market.

The U.S. economic reports were just a couple more steps in that wall of worry with 2 of the 3 reports negative. The NFIB Small Business Survey fell -2.5 points in January to 97.9 and the lowest level in three months. The drop came from weakness in the economic outlook. Those respondents that expected the economy to improve fell from 12% to zero. This means respondents were evenly divided between those expecting improvement and those expecting an economic decline. Those expecting an improvement in earnings declined from a net of -15% to -19% of respondents. I could go on listing the various components but the results are the same. As we move closer to potential Fed rate hikes the sentiment over business conditions is likely to deteriorate further.

Wholesale inventories rose only +0.1% in December, down from +0.8% in November and an average of +0.6% gain in the prior four months. Sales declined -0.4% for the second month. The inventory to sales ratio rose to 1.22 with a steady +0.01 monthly rise for the last five months. This is a result of slowing sales allowing inventory levels to build. This report is one traders normally ignore so there was no impact on the market.

The Job Openings and Labor Turnover Survey (JOLTS) showed that job openings rose from 4.847 million in November to 5.028 million in December and the highest since 2002. That is up 28.5% compared to year ago levels. Hires rose from 5.054 million to 5.148 million. Separations also rose from 4.7 million to 4.886 million. These numbers suggest the job market is definitely improving. However, layoffs also rose from 1.655 million to 1.726 million but the layoff rate at 1.2% is at historic lows.

The largest number of separations, which covers voluntary and involuntary, was in construction and leisure/hospitality. This was a positive report but it is also a lagging report for the December period and investors normally ignore it.

Weighing on the market this morning was news that China's Consumer Price Index (CPI) for January rose only +0.8% and the smallest gain since November 2009. This suggests the economic downturn in China, lower commodity prices and a crash in the real estate market is pushing China closer to deflation. Producer prices (PPI) fell -4.3% in January and more than the -3.8% decline analysts expected. Prices have been falling at the factory level for nearly three years. According to analysts the continued declines will force China to cut interest rates in March/April and announce new stimulus programs to prevent the second largest global economy from falling into a possible long term deflationary slump.

Wednesday's economic calendar is also boring. The EIA oil inventories may end up being the most important even though it is normally just a 10 second sound bite for futures traders.

The geopolitical calendar is highlighted by the emergency meeting of the EU Finance Ministers on Wednesday on the topic of Greece. There is no telling what is going to come out of this meeting but I doubt it will be favorable for Greece.

Oil inventories are at 80 year highs and global storage is filling up fast. Once available storage is at capacity the impact to oil prices is going to be dramatic. Crude inventories in the U.S. have risen over 30 million barrels in the last four weeks to 413 million barrels. That is an 8% rise in inventories in just four weeks and this can't continue forever. According to the EIA the U.S. has 373 million barrels of storage capacity in various tank farms plus 70 million barrels at the Cushing Oklahoma futures delivery hub. Refineries have another 148 million barrels of capacity.

In theory that is 591 million barrels of storage capacity except that you can't fill everything to capacity. Operators like to keep 15-20% of space available for operations. They need to have space available for new oil coming in while old oil in other tanks is flowing out. Some of these tank farms blend crude by combining heavier crude with lighter crude to match refinery input specifications. That requires available capacity to provide the blending tasks of moving oil around. In reality the threshold level is probably in the 475 million barrel range and we are at 413 million today. Inventories normally rise until early May so there may be some trouble ahead. Crude oil declined -4% today to $50.78.

The International Energy Agency (IEA) released their monthly report today and warned that excess oil supplies will raise global storage to a record 2.83 billion barrels by the end of June. The IEA warning means lower prices ahead but they do expect the supply/demand ratio to be back in balance by the end of 2015. Currently production is 1.5 mbpd over demand and that oil has to be stored somewhere.

The U.S. Energy Information Administration (EIA) said its production expectations for 2015 and 2016 were virtually unchanged from the prior month. They believe new oil coming online from new projects will offset any temporary decline in shale production.

The world's largest oil trading company Vitol said they expect a "dramatic build in oil inventories over the next few months." If oil builds as we expect we could see a dramatic drop in prices. Most oil analysts believe the +20% spike in crude over the last two weeks was short covering and a new move lower is ahead.

An internal memo from Tesla's Elon Musk suggests heads are about to roll over dismal sales in China. Sources that have seen the memo claim Tesla sold only 120 cars in China in January. If those sales numbers are correct it would be very negative for the Tesla earnings due out on Wednesday. In the memo Musk threatened to fire or demote country managers if they are "not on a clear path to positive long term cash flow." Tesla's goal for annual sales in 2014 was 33,000 cars. They will need to have sold 11,000 in Q4 to reach that goal. Shares declined just over $1 when the news broke.

Apple (AAPL) shares rallied +$2.30 today to close at a new high at $122. This gives the company a market cap of $711 billion and the first company to exceed the $700 billion mark. With $178 billion in cash the odds are good shares are going higher. This cash pile is after Apple has spent $103 billion of its $130 billion dividend and stock repurchase program.

This afternoon Apple announced it was investing $848 million in a solar farm built by First Solar (FSLR) in California's Monterey County. The plant will produce enough electricity to power 60,000 homes. Apple will get 130 megawatts to power its new campus and 150 megawatts would go into the PG&E grid in California. This is the largest commercial solar deal on record and the deal is for a 25-year commitment. That $848 million is roughly four days of earnings for Apple. They made $18 billion in profit in Q4.

Micron (MU) shorts were treated to a big surprise when the company signed a new supply agreement with Inotera for 2016. Under the modified agreement Micron can purchase all of Inotera's output at discounted market prices for the rest of 2015. The only change in the 2015 agreement was the addition of "discounted" to market prices. The company also extended the deal for 2016 with a new formula that shares profits between Micron and Inotera. The agreement can be extended for another two years after 2016 and one year extensions in the years after that.

Micron shares exploded higher with a +10% gain as massive short positions were squeezed out of existence. Micron has been declining since early December as margin issues hit the DRAM sector. SanDisk warned back in early January and forced another leg down on the chip stocks. Short interest in Micron was very high. Micron has been a crowd favorite for trading in both directions for years because of the high volatility and low price. Shorts got their volatility injection today.

Shares of Pier One (PIR) were knocked for a -30% drop after the company warned that earnings for the current quarter would be in the range of 80-83 cents, down from a prior forecast of $.95 to $1.05. Analysts were expecting $1.00. The company said sales in January were "well below our forecasts" and forcing us to take a cautious view on February. Before today's drop shares had gained +10% in 2015.

Halliburton (HAL) said today it will lay off at least 5,000 to as many as 6,200 workers as a result of falling oil prices and a sharp decline in oilfield service contracts. This comes after a cut of 1,000 workers in December. Competitor Schlumberger (SLB) announced in January it was cutting 9,000 jobs. Baker Hughes (BHI), which is being acquired by Halliburton, said in January it was cutting 7,000 workers.

Also today Baker Hughes and Halliburton both received additional requests for information from the Dept of Justice in regard to the acquisition of Baker Hughes. Both companies had expected the requests. This is a formality that extends the waiting period on government approval by another 30 days. With an acquisition this large the additional time was needed.

Martin Marietta Materials (MLM) surprised investors with a +15% gain to $137 after reporting strong earnings thanks to high demand for cement. The company reported earnings of 99 cents compared to analyst estimates for 85 cents. MLM said they see rising demand for construction materials in an improving economy. They acquired cement maker Texas Industries for $2.06 billion in July and that gave them a foothold in the fast growing Texas market. The company said demand for cement in Texas is likely to outstrip supply for the next ten years. They recently hiked prices to account for the high demand. An example of the demand came from the $100 million in cement revenue in Q4 compared to $210 million for the entire year.

Molson Coors Brewing (TAP) disappointed investors with earnings of 55 cents that missed analyst estimates for 67 cents. Revenue fell of 5.3% to $973.8 million, which still beat estimates of $969 million. However, the company said beer sales were being hurt by the strong dollar and they guided for more of the same for the rest of 2015.

Dow component Coke (KO) posted a 55% decline in profits but earnings of 44 cents beat estimates of 42 cents. The company overcame a decline in carbonated beverage sales with new offerings. Coke said an earlier survey showed that more than 30% of sales came from products that did not exist 5 years ago. The younger generation is not as fond of carbonated drinks as they were in the 70s and 80s. The boomer generation is also moving away from carbonation in favor of healthier beverages.

The earnings calendar for the rest of the week is heaviest for Wednesday. Dow component Cisco systems and several other high profile companies highlight the list. After Wednesday the pace of earnings will decline significantly.


According to the Stock Trader's Almanac there has not been a down year for the third year in a presidential election cycle since 1939. Editor Jeff Hirsch said the gains normally come in the first half of the year before the presidential primary race begins to take shape. In the last half of the year the mudslinging begins and investors begin to worry about the economy.

That prediction and $5 will buy you a pricey Starbucks coffee but it won't guarantee us a positive market for the next six months. Mutual fund cash on hand is at 40 year lows. Margin debt at the NYSE is at record highs. Market breadth is shrinking and the market is being lifted by a few high profile stocks rather than broad based buying.

S&P earnings estimates for 2015 have fallen from $134 to $119 over the last four months and that type of decline has only happened twice in the last 30 years.

In theory the market is setting up for a decent decline but evidence this week suggests otherwise. If you want logic don't look in the stock market.

The S&P Midcap 400 is only two points away from a new high. The S&P-500 closed at 2,068 and just over strong resistance at 2,064. The dips are being bought again and the market could make new highs this week if Greece does not implode.

The S&P-500 inched past resistance at 2,064 to close at 2,068. I know that is not a big breakout but every point counts. The next challenge is the early December resistance at 2,075 then the all time closing high at 2,090 and the mother of all resistance 2,100. The S&P has traded in a broad range since topping out in November and it is moving back to test the upper limits of that range this week. That 2,100 level is the lower end of analyst expectations for year-end 2015. The average estimate is 2,227 but that is a long way from here. Once we hit that 2,100 level there could be a sell the news event as some investors decide the gains are in the bag. I would expect that to be very few investors but traders are another matter. Hitting 2,100 would definitely be a trading event with shorts piling on in expectation for another dip.

The rest of the week is not going to be a cake walk. If crude prices continue to fall the energy sector will be a drag on the market. Offsetting that is the sudden surge in the financial sector on expectations for a June rate hike. If we do succeed in moving over 2,075 it should draw a lot of investors off the sidelines.

Resistance (adjusted to round numbers) 2,075, 2,090, 2,100. Support 2,040.

You know it was a short squeeze day when IBM leads the list of Dow gainers. Half of the companies in this list were being heavily shorted just a week ago. The Dow is edging slowly higher with strong resistance at 17,915 to 17,960. We saw a decent +139 point gain today to close just below those levels. More importantly this rebound was from a higher low. The two day decline to 17,685 was the first higher low in a month. That is a definite technical positive. If the Dow can move over 17,915 we should see some additional short covering and a new high is actually possible. Nobody would have thought that on Friday February 2nd at 17,037.

The Nasdaq Composite is also very close to a new 14 year high. The high close in December was 4,806.91 and we closed at 4,787 today. The Nasdaq can jump that distance in a single day if traders were properly motivated but I don't see that urgency today. I would expect a slow creep higher with some possible backfilling as we get to the 4,800.

However, this is a bullish chart. Any move over 4,800 is going to attract attention and shorts will get nervous. Anyone still short this market at this level is asking for trouble.

Resistance 4,791, 4,800, 4,807. Support 4,722.

The Russell 2000 small caps continue to creep higher but resistance at 1,208 is solid. I think the Midcap 400 is going to be the spark that ignites any rally this week. If it breaks out to a new high the Russell and the Nasdaq should be right behind it.

Unfortunately there is a negative chart. The Dow Transports are not confirming any Dow move higher. The transports have formed another lower high and any uptick in oil prices is going to further pressure this sector. A break below 8,575 is really going to drag on the Dow.

In theory the internals, economics and fundamentals tell us we should be watching for a decline in the markets. The markets will always do almost the exact opposite of what analysts expect so we may see some new highs this week. However, the emergency meeting of the EU Finance Ministers on Wednesday could be a real hurdle for the rest of the week. Anything is possible and probable. While they will not vote to just kick Greece out of the Eurozone they may make it so difficult for Greece that the country decides on its own to exit. The headlines could be scary for Europe but the U.S. impact should be muted.

Assuming the FM meeting does not end in a declaration of war against Greece the market should shake it off and could move higher.

Enter passively, exit aggressively!

Jim Brown

Send Jim an email


New Option Plays

Big Cap Strength

by James Brown

Click here to email James Brown


Honeywell Intl. - HON - close: 102.44 change: +0.85

Stop Loss: 99.65
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 3.0 million
Entry on February -- at $---.--
Listed on February 10, 2015
Time Frame: 8 to 12 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
HON is in the industrial goods sector. Shares have managed to outperform its peers. The Dow Jones Industrial Average is up +0.26% this year. The XLI industrial ETF is -0.3% for 2015. Yet HON is up +2.5% so far. That's not bad and it's not counting the stock's 2% dividend yield.

According to the company, "Honeywell (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; turbochargers; and performance materials."

Earnings have been somewhat mediocre. Back in December HON lowered expectations for their fourth quarter results. When they finally reported Q4 results in January they managed to beat estimates by one cent with a profit of $1.43 a share, which is a +15% improvement from the year ago period. Revenues dropped -1.2% year over year at $10.27 billion but that still beat Wall Street's revenue estimate of $10.17 billion. HON's Q4 results were hurt by a -6% slowdown in their aerospace business but management is bullish that this segment will see strong growth going forward.

HON's Chairman and CEO Dave Cote commented on his company's results,

"In the fourth quarter, Honeywell delivered 4% organic sales growth and achieved 15% earnings per share growth (excluding the pension mark-to-market adjustment), exceeding the high end of our guidance range and capping off another year of terrific performance in 2014... Strong execution in our businesses and continued momentum across the portfolio throughout the year helped us to deliver on our aggressive 2014 sales, margin, and EPS targets. We achieved significant margin expansion in 2014 with benefits from our key process and productivity initiatives, and increased organic growth
Discussing their 2015 outlook the company said, "We remain cautious in our planning with regard to the global economy, but are confident that our balanced portfolio mix of short- and long-cycle businesses is well-positioned to deliver on our 2015 commitments that include higher organic sales, continued margin expansion, and double-digit earnings growth."

In an interview with Bloomberg, Mr. Cote sounded optimistic. He said, "For the first time in five years, I'm actually a little more bullish on where the global economy is going than economic forecasters are." Discussing the impact of crude oil on the economy, he said, "impact of lower oil prices is causing this major redistribution from oil-producing to oil-using economies, and those oil-using economies are quite large."

The market seemed unfazed by the company's cautious outlook. The stock actually rallied on its report. HON's recent strength has pushed shares to new all-time highs. The point & figure chart is already bullish and forecasting at $135.00 target. The P&F chart is also on the verge of a new triple-top breakout buy signal. Tonight we are suggesting a trigger to buy calls at $103.05

Trigger @ $103.05

- Suggested Positions -

Buy the JUN $105 CALL (HON1506190105) current ask $2.87

Option Format: symbol-year-month-day-call-strike

Daily Chart:

Weekly Chart:

In Play Updates and Reviews

Hopes For Greece Fuel Gains

by James Brown

Click here to email James Brown

Editor's Note:

There was new hope that Greece might work out a debt deal. This helped fuel the market's widespread rally today. Traders chose to ignore the sell-off in crude oil. We are seeing several candidates trade at or near new highs.

SBUX hit our entry point. WFM was closed ahead of earnings tomorrow.

Current Portfolio:

CALL Play Updates

Hanesbrand Inc. - HBI - close: 116.78 change: +1.20

Stop Loss: 109.90
Target(s): To Be Determined
Current Option Gain/Loss: +34.0%
Average Daily Volume = 800 thousand
Entry on February 03 at $114.14
Listed on February 29, 2015
Time Frame: Exit PRIOR to HBI's stock split on March 4th
New Positions: see below

02/10/15: HBI continued higher with a +1.0% gain. This is a new all-time closing high for the stock. The intraday high near $118.00 is potential overhead resistance but it looks like HBI could be ramping up for a rally towards $120. More conservative traders may want to start raising their stop loss.

Earlier Comments: February 2, 2015
How many stocks can you name that are up +400% in the last three years? HBI is in the consumer goods sector. They make apparel under a variety of brand names. Shares of HBI have been a big performer the last few years, outperforming the broader market.

According to the company, "HanesBrands, based in Winston-Salem, N.C., is a socially responsible leading marketer of everyday basic apparel under some of the world's strongest apparel brands in the Americas, Asia and Europe, including Hanes, Champion, Playtex, DIM, Bali, Maidenform, Flexees, JMS/Just My Size, Wonderbra, Nur Die, Lovable and Gear for Sports. The company sells T-shirts, bras, panties, shapewear, men's underwear, children's underwear, socks, hosiery, and activewear produced in the company’s low-cost global supply chain."

A good reason shares have been rising so consistently has been HBI's bullish guidance. Last year the company raised its earnings guidance three quarters in a row. Their most recent earnings report was January 29th (last week). HBI's Q4 results were $1.46 a share with revenues surging +20% to $1.55 billion. The bottom line number was two cents above estimates while revenues met estimates.

HBI said that 2014 was its second consecutive year of record results. Net sales rose +15% while its profit grew +28% and adjusted EPS soared +45%. Hanes Chairman and CEO Richard A. Noll commented on their results saying,

"We had another outstanding year in 2014, generating significant shareholder value and again achieving record results for sales, operating profit and EPS. We are in the midst of a multiyear period of strong growth supported by our powerful company-owned global supply chain, Innovate-to-Elevate product platforms, and acquisitions. Our guidance for 2015 translates into another year of double-digit EPS growth and what would be another record year for sales, profit and EPS, despite the challenges of currency exchange rates."

HBI's new guidance sees 2015 revenues in the $5.77-5.82 billion range. That's +9% growth but a little bit below Wall Street's estimates. HBI is forecasting earnings in the $6.30-6.50 range, which equals about +11% to +15% growth.

Management also raised its cash dividend +33% to $0.40 a share. On top of that they issued a 4-for-1 stock split. The split is coming up soon. HBI will start trading split adjusted on March 4th, 2015. We think HBI could see an old-fashioned split run.

Tonight we are listing a trigger to buy calls at $114.10. We'll start this trade with a stop at $109.90. Plan on exiting before the March 4th stock split date.

- Suggested Positions -

Long MAR $115 CALL (HBI150320C115) entry $3.21

02/03/15 triggered @ 114.14 on an intraday gap higher. Suggested entry was $114.10
Option Format: symbol-year-month-day-call-strike

ServiceNow, Inc. - NOW - close: 73.32 change: +0.44

Stop Loss: 69.85
Target(s): To Be Determined
Current Option Gain/Loss: -26.2%
Average Daily Volume = 1.1 million
Entry on February 05 at $75.15
Listed on February 04, 2015
Time Frame: 8 to 12 weeks
New Positions: see below

02/10/15: Hmm... yesterday NOW underperformed the market and today shares spent most of the day churning sideways in a narrow range while the rest of the market rallied. This is disappointing and should be seen as a caution flag on our NOW trade. I'm not suggesting new positions at this time.

Earlier Comments: February 4, 2015:
Tonight we are looking at a company that saw its sales grow more than 60% last year. They're forecasting more than 40% growth in 2015. That company is cloud-based services ServiceNow.

NOW describes itself as "ServiceNow is changing the way people work. With a service-orientation toward the activities, tasks and processes that make up day-to-day work life, we help the modern enterprise operate faster and be more scalable than ever before. Customers use our service model to define, structure and automate the flow of work, removing dependencies on email and spreadsheets to transform the delivery and management of services for the enterprise. ServiceNow provides service management for every department in the enterprise including IT, human resources, facilities, field service and more. We deliver a 'lights-out, light-speed' experience through our enterprise cloud – built to manage everything as a service."

This company has been consistently guiding their earnings forecast higher. They've done it at least the last four earnings reports in a row. Their most recent earnings report was January 28th. NOW reported their Q4 results of $0.03 a share compared to a loss of 2 cents a year ago. Analysts were expecting a profit of 2 cents a share. Q4 revenues soared +58% to $198 million, which was above expectations.

Some of the highlights from their fourth quarter include billings up +62% year over year and up +34% quarter over quarter. Deferred revenues were up +20% for the quarter. NOW added 211 net new customers, bumping their total to 2,725. Their customer renewal rate was 97%.

NOW said their 2014 revenues soared +61% compared to 2013. Their backlog at the end of 2014 hit $1.4 billion. That's a +57% jump from a year ago. NOW's President and CEO Frank Slootman said, "We finished 2014 with strong metrics across the board, maintaining consistently high year-over-year growth rates. In addition to a growing list of new customers that now includes more than 25% of the Global 2000, we continue to see existing customers expand their relationship with us, resulting in the highest quarterly upsell rate since our IPO." NOW's CFO Michael Scarpelli said, "Within the Global 2000, annualized contract value per customer has increased 40% year-over-year. These expanding contracts have helped us grow our combined backlog and deferred revenue 57% year-over-year."

NOW offered bullish guidance. They expected Q1 revenues to grow +50% in the $207-212 million range compared to Wall Street's estimates of $202.4 million. NOW's 2015 guidance is forecasting revenue growth in the +41% to +47% range in the $960-1,000 million zone versus analysts' estimates of $948 million.

These strong numbers and the consistent growth makes them a popular candidate among Wall Street analysts. After NOW's most recent earnings report several analyst firms raised their price target on NOW's stock.

Technically shares have just recently broken out through major resistance near $70.00. The point & figure chart is bullish and forecasting a long-term target of $97.00. The last few days have seen shares consolidating sideways in the $70-75 range. Tonight we are suggesting a trigger to buy calls at $75.15.

- Suggested Positions -

Long MAY $80 CALL (NOW150515C80) entry $3.93

02/05/15 triggered @ 75.15
Option Format: symbol-year-month-day-call-strike

Starbucks Corp. - SBUX - close: 91.18 change: +2.36

Stop Loss: 85.80
Target(s): To Be Determined
Current Option Gain/Loss: +23.3%
Average Daily Volume = 5.1 million
Entry on February 10 at $90.25
Listed on February 05, 2015
Time Frame: 8 to 12 weeks
New Positions: see below

02/10/15: Bullish analyst comments plus a generally widespread rally in the market was just the recipe SBUX needed to breakout past resistance at $90.00. This morning Piper Jaffray raised their price target on SBUX from $100 to $102 and suggested SBUX could double in value by 2020. This sent SBUX sprinting higher at the opening bell. The stock hit our suggested entry point at $90.25 and outperformed the market with a +2.65% gain by the close.

Earlier Comments: February 5, 2015:
The world seems to have an insatiable appetite for coffee. Starbucks is more than happy to help fill that need. The first Starbucks opened in Seattle back in 1971. Today they are a global brand with locations in 66 countries. SBUX operates more than 21,000 retail stores with more than 300,000 workers.

A few years ago Business Insider published some facts on SBUX. The average SBUX customer stops by six times a month. The really loyal, top 20% of customers, come in 16 times a month. There are nearly 90,000 potential drink combinations at your local Starbucks. The company spends more money on healthcare for its employees than it does on coffee beans.

The company's earnings results were only mediocre most of 2014 year. You can see the results in SBUX's long-term chart below. After incredible gains in 2013 SBUX has essentially consolidated sideways in 2014. The good news is that looks the consolidation is over.

Five-Year Plan

Late last year SBUX announced their five-year plan to increase profitability. Here's an excerpt from a company press release:

"The seismic shift in consumer behavior underway presents tremendous opportunity for businesses the world over that are prepared and positioned to seize it," Schultz said (Howard Schultz is the Founder, Chairman, President, and CEO of Starbucks). "Over the next five years, Starbucks will continue to lean into this new era by innovating in transformational ways across coffee, tea and retail, elevating our customer and partner experiences, continuing to extend our leadership position in digital and mobile technologies, and unlocking new markets, channels and formats around the world. Investing in our coffee, our people and the communities we serve will remain at our core as we continue to redefine the role and responsibility of a public company in today's disruptive global consumer, economic and retail environments."

"Starbucks business, operations and growth trajectory around the world have never been stronger, and we are more confident than ever in our ability to continue to drive significant growth and meet our long term financial targets," said Troy Alstead, Starbucks chief operating officer. "We have more customers visiting more stores more frequently, both in the U.S. and around the world, than at any time in our history. And we expect both the number of customers visiting our stores and the amount they spend with us to accelerate in the years ahead. With a robust pipeline of mobile commerce innovations that will drive transactions and unprecedented speed of service, Starbucks is ushering in a new era of customer convenience. We believe the runway of opportunity for Starbucks inside and outside of our stores is both vast and unmatched by any other retailer on the planet."

The company believes they can grow revenues from $16 billion in FY2014 to almost $30 billion by FY2019. To do that they will expand deeper into regions like China, Japan, India, and Brazil. SBUX expects to nearly double its stores in China to over 3,000 locations in the next five years

They're also working hard on their mobile ordering technology to speed up the experience so customers don't have to wait in line so long at their busiest locations. This will also include a delivery service.

Part of the five-year plan is a new marketing campaign called Starbucks Evening experience. The company wants to be the "third place" between home and work. After 4:00 p.m. they will start offering alcohol, mainly wine and beer, in addition to new tapas-like smaller plates.

The company recently launched its first ever Starbucks Reserve Roastery and Tasting Room in Seattle, near their iconic first retail store. The new roastery is supposed to be the ultimate coffee lovers experience. CEO Schultz said they will eventually open up about 100 of these Starbucks Reserve locations.

SBUX is having a pretty good 2015 so far with the stock up +8.1%, outperforming the broader market. A lot of this gain was thanks to a post-earnings pop. SBUX reported its Q1 2015 results on January 22nd. Adjusted earnings, backing out one-time charges, were $0.80 a share. That's in-line with estimates. Revenues were up +13.3% to $4.8 billion, also in-line with estimates. Investors applauded the news anyway and sent SBUX soaring to new all-time highs the next day.

SBUX said their worldwide comparable store sales rose +5% while traffic only rose +2%. It was the 20th consecutive period that same-store sales were up +5% or more. It was a very strong holiday period for SBUX thanks in part to astonishing gift card sales. The amount of money loaded onto SBUX gift cards during the holidays surged +17% to a record $1.6 billion. One out of every seven Americans received a SBUX gift card. The company also saw significant growth overseas with its China and Asia-Pacific business soaring +85% to sales of $495 million. Their mobile transactions have reached seven million transactions a week.

SBUX's guidance was pretty lackluster but Wall Street didn't care. The company actually guided down for the Q2 2015 (current quarter) as they expect earnings in the $0.64-0.65 range. Analysts' were expecting $0.68 a share. SBUX also provided 2015 guidance of $3.09-3.13 versus Wall Street's estimate of $3.12. The company is still projecting 2015 sales growth of 16% to 18% as they see sales ramping up in the second half of 2015. They also updated their outlook on China as they plan to add 3,400 stores by 2019.

Investor sentiment on SBUX is bullish. Shares have not seen barely any profit taking following its post-earnings pop. Now, after two weeks of digesting gains, the stock is pushing higher and poised to breakout past resistance at $90.00. The point & figure chart is bullish and forecasting at $104.00 target.

Tonight we are suggesting a trigger to buy calls at $90.25 with an initial stop loss at $85.80.

- Suggested Positions -

Long Apr $95 CALL (SBUX150417C95) entry $1.03

02/10/15 triggered @ 90.25
Option Format: symbol-year-month-day-call-strike

Constellation Brands - STZ - close: 113.40 change: +1.54

Stop Loss: 108.40
Target(s): To Be Determined
Current Option Gain/Loss: +45.7%
Average Daily Volume = 1.25 million
Entry on January 15 at $109.36
Listed on January 14, 2015
Time Frame: Exit prior to February expiration
New Positions: see below

02/10/15: STZ delivered a +1.3% gain and closed at another new high. I don't see any changes from yesterday's comments.

We have less than two weeks left on our February calls. That means we will most likely exit our STZ trade this week. More conservative traders may want to use a stop loss closer to $110.00. I am not suggesting new positions at this time.

Earlier Comments: January 15, 2015:
Today the big players in the beer industry like Anheuser-Busch InBev (BUD) and Molson Coors (TAP) are losing market share to smaller craft beer brewers. Yet STZ actually seeing momentum in its beer portfolio.

STZ is part of the consumer goods sector. According to the company's website, "Constellation Brands, Inc. is a leading wine, beer and spirits company with a broad portfolio of premium brands. Constellation is the world leader in premium wine, the leading multi-category beverage alcohol company in the U.S. and the number three beer company in the U.S. Headquartered in Victor, New York, Constellation Brands is an S&P 500 Index and Fortune 1000® company with more than 100 brands in our portfolio, sales in approximately 100 countries and operations in approximately 40 facilities."

Last year the stock was a strong performer. The S&P 500 rallied about +11% in 2014 while STZ surged +39%. Investors have been consistently buying dips. The relative strength from last year has carried into 2015.

The company recently reported earnings on January 8th. Wall Street was expecting a profit of $1.14 per share on revenues of $1.51 billion. STZ said their earnings rose +11.8% to $1.23 a share. Revenues were up +7% to $1.54 billion, beating estimates on both counts. Management then raised their 2015 guidance from $4.10-to-$4.25 to $4.25-to-$4.35. That compares to Wall Street's 2015 estimate of $4.24.

STZ's CEO Rob Sands commented on their latest results saying, "We achieved outstanding results for the third quarter driven by the exceptional ongoing momentum for our beer business." Their beer sales rose +16% and gained market share.

The stock has seen multiple upgrades in January and currently trading at all-time highs. Today traders bought the dip near $105.00. The stock looks poised to breakout past short-term resistance at $108.50. The point & figure chart is bullish and forecasting a long-term target of $127.00.

We are suggesting a trigger to buy calls at $108.65. We'll start this trade with a stop at $104.85.

- Suggested Positions -

Long FEB $110 CALL (STZ150220C110) entry $2.47

02/07/15 Our February options have two weeks left
01/31/15 new stop @ 108.40
01/15/15 triggered on gap open at $109.36, trigger was $108.65
Option Format: symbol-year-month-day-call-strike

Thor Industries - THO - close: 59.09 change: -0.06

Stop Loss: 57.75
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 352 thousand
Entry on February -- at $---.--
Listed on February 07, 2015
Time Frame: Exit PRIOR to earnings in March (no date yet)
New Positions: Yes, see below

02/10/15: THO underperformed the market today and closed virtually unchanged on the session. The relative weakness is a bit concerning. Fortunately we are still on the sidelines. Right now our plan is to buy calls if THO trades at $60.25 or higher.

Earlier Comments: February 7, 2015:
Thor was making headlines this week. The small country of Iceland has started building a temple to the Norse god and other deities, which will be the first such building in the last 1,000 years. However, tonight we are not talking about Norse deities and instead looking at Thor Industries, one of the largest manufacturers of RVs in the world.

THO is part of the consumer goods sector. They were founded back in 1980 by Wade Thompson and Peter Orthwein when they bought Airstream. Today the company makes a large number of recreational vehicles under several brand names that fall into two segments: towable RVs and motorized RVs.

There are more than 76 million baby boomers in the U.S. and they started hitting retirement age in 2011 at the rate of 10,000 a day. With many boomers looking for an active retirement the demand for RVs is likely to remain strong.

USA Today recently ran an article discussing how the RV industry has rebounded sharply following the Great Recession. The industry was expecting +8% growth in 2014 and RV makers just saw their best October in almost 40 years. One piece of the puzzle that could be boosting demand is gasoline prices at three-year lows. That makes these massive gas guzzlers (RVs) a lot more attractive.

THO recently announced an acquisition where they purchased towable recreational maker Cruiser RV and luxury fifth wheel RV maker DRV. This strengthens THO's towable product line, an area that was already seeing significant growth.

THO's most recent earnings report was back on December 1st, 2014. The company disappointed on the bottom line with earnings of $0.73 a share. That missed Wall Street estimates by 8 cents. However, revenues soared +15% to $922 million, which surpassed estimates. THO blamed a tight labor market in Indiana for the margin pressure. The company did offer a bullish update on its backlog. The company's motorized backlog dipped 18% but its towable backlog surged +56% (this is before their recent acquisition).

The stock did see a post-earnings sell-off in early December but THO has recovered. After churning sideways the last several weeks the stock has broken out to new multi-month highs. The point & figure chart is bullish and forecasting at $77 target.

Tonight we are suggesting a trigger to buy calls at $60.25. I'm suggesting the March calls since THO will likely report earnings in March and we do not want to hold over the announcement. We'll update our time frame when THO confirms its earnings date.

Trigger @ $60.25

- Suggested Positions -

Buy the MAR $60 CALL (THO150320C60)

Option Format: symbol-year-month-day-call-strike

UnitedHealth Group - UNH - close: 108.97 change: +2.48

Stop Loss: 104.85
Target(s): To Be Determined
Current Option Gain/Loss: +0.4%
Average Daily Volume = 4.2 million
Entry on February 04 at $108.25
Listed on February 03, 2015
Time Frame: 8 to 12 weeks
New Positions: see below

02/10/15: After a two-day pullback traders decided to buy the dip in UNH. Shares rebounded with a +2.3% gain and closed above its 10-dma. The next level of resistance is the $110.00 area.

Earlier Comments: February 3, 2015
Healthcare stocks have been consistent winners for investors over the last couple of years. Just check out a long-term chart of the IHF or XLV healthcare ETFs. Helping the group lead that charge is UNH, one of the biggest names in healthcare. The company's various businesses serve more than 85 million people around the world. The company is ranked No. 14 on the Fortune 500 list.

UNH has two different business segments. They have their UnitedHealthcare business and their Optum business. UnitedHealthcare provides health benefit products and services. Their Optum business is a health management services company.

The Affordable Care Act (ACA, or Obamacare) had a rough start but now the system is clearly seen as a huge benefit for the health insurance companies. According to Bloomberg the ACA has added millions of new customers to the healthcare industry. UNH recently joined the public exchanges and added more than 400,000 new individuals. UNH did say they are paying significantly more fees and taxes due to the ACA but thus far their increase in customers and better operating efficiency in 2014 have kept the costs manageable.

The results are showing up in the company's earnings growth. In July 2014 the company beat estimates and raised their guidance. In October 2014 they beat estimates and raised their guidance. In early December UNH reaffirmed their 2014 guidance and offered a 2015 forecast that was in-line with Wall Street estimates.

Their most recent earnings report was January 21st. The results were slightly ahead of expectations with profits up +10% from a year ago to $1.55 per share with revenues rising +7.4% to $33.43 billion. That was enough to surpass estimates of $1.50 a share on revenues of $33.15 billion.

UNH's CEO Stephen Hemsley commented on their business saying, "We enter 2015 with a positive outlook and rising business momentum. Steady innovation and year by year advances in the quality, breadth and value of our services to employers, government sponsors, consumers and care providers are creating opportunities for revenue and earnings growth in traditional and new markets."

Management offered 2015 guidance that was in-line with prior estimates. They expect earnings to grow about +7.4% in the $6.00-6.25 range. Revenues are expected to rise +8.0% in the $140.5-to-141.5 billion range.

The stock exploded higher on its better than expected Q4 numbers. Since the post-earnings rally peaked the stock has seen a nice correction. Traders just bought the dip yesterday near support at $105.00. We want to hop on board this healthcare train and buy the rebound. There appears to be short-term resistance near $108.00. Tonight we're suggesting a trigger to buy calls at $108.25.

- Suggested Positions -

Long MAR $110 CALL (UNH150320C110) entry $2.46

02/04/15 triggered @ 108.25
Option Format: symbol-year-month-day-call-strike

Valeant Pharmaceuticals - VRX - close: 164.13 change: +4.03

Stop Loss: 155.85
Target(s): To Be Determined
Current Option Gain/Loss: -18.8%
Average Daily Volume = 2.5 million
Entry on January 26 at $160.55
Listed on January 24, 2015
Time Frame: Exit PRIOR to earnings on February 24th
New Positions: see below

02/10/15: VRX was also showing some relative strength today with a +2.5% rebound. This is actually a new all-time closing high for the stock.

More conservative traders may want to raise their stop again. I am not suggesting new positions at this time.

Earlier Comments: January 24, 2015:
Healthcare stocks have been some of the market's best performers in 2015. VRX is helping lead the group higher with a +11.5% gain already.

The company's website says, "Valeant Pharmaceuticals International, Inc. is a multinational specialty pharmaceutical company that develops and markets prescription and non-prescription pharmaceutical products that make a meaningful difference in patients' lives. The company's growth strategy is to acquire, develop and commercialize new products through strategic partnerships, and strategically expand its pipeline by adding new compounds or products through product or company acquisitions. Headquartered in Laval, Quebec, Valeant has approximately 17,000 employees worldwide and is listed on both the New York Stock and Toronto Stock Exchanges under the symbol VRX."

VRX made a lot of headlines last year with its attempted hostile takeover of Allergan (AGN). Eventually VRX lost out to a rival. AGN agreed to a takeout by Actavis (ACT) for $219 a share, which was more than VRX wanted to pay.

Meanwhile VRX has been doing just fine on the earnings front. The company is developing a trend of beating analyst estimates. Plus they guided higher in April 2014, in September and with their last earnings report on October 20th. In November VRX's Board of Directors announced at $2 billion stock buyback program.

This year VRX has already raised guidance again. They see Q4 results above Wall Street estimates. They also raised their guidance for FY2015 into the $10.10-10.40 range compared to consensus estimates near $10.01.

The stock has been surging with a rally to new all-time highs. The point & figure chart is bullish and forecasting at $180.00 target.

Currently VRX sits just below round-number resistance at $160.00. We are suggesting a trigger to buy calls on a breakout at $160.55.

- Suggested Positions -

Long MAR $170 CALL (VRX150320C170) entry $4.80

02/03/15 News that VRX is interesting in buying SLXP
01/26/15 triggered @ 160.55
Option Format: symbol-year-month-day-call-strike

Williams-Sonoma Inc. - WSM - close: 80.62 change: +1.57

Stop Loss: 77.85
Target(s): To Be Determined
Current Option Gain/Loss: +9.4%
Average Daily Volume = 990 thousand
Entry on February 03 at $79.35
Listed on January 29, 2015
Time Frame: Exit PRIOR to earnings in March
New Positions: see below

02/10/15: WSM bounced back toward resistance near $81.00 and eventually closed with a +1.98% gain. Shares could gap down tomorrow. Rival retailer Pier 1 (PIR) is down sharply after hours after they lowered guidance and announced their CFO is resigning. This weakness in PIR could temporarily rub off on WSM.

Earlier Comments: January 29, 2015:
Normally when a company lowers their earnings guidance Wall Street tends to punish the stock price. WSM has lowered guidance several times but that didn't stop shares for outperforming the market with a +29% gain in 2014.

The company describes itself as "Williams-Sonoma, Inc. is a specialty retailer of high-quality products for the home. These products, representing eight distinct merchandise strategies – Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams-Sonoma Home, Rejuvenation, and Mark and Graham – are marketed through e-commerce websites, direct mail catalogs and 603 stores. Williams-Sonoma, Inc. currently operates in the United States, Canada, Australia and the United Kingdom, offers international shipping to customers worldwide, and has unaffiliated franchisees that operate stores in the Middle East and the Philippines."

They have an enviable position of mostly selling to high-end customers who make more than $150,000 a year. Unlike many retailers, WSM has an extremely healthy online presence. Their e-commerce business generated half of all sales, which certainly gives their margins a boost compared to rivals.

WSM seems to have perfected the beat estimates and guide lower game to management Wall Street's earnings expectations. Looking at the last four earnings reports in a row WSM has beaten estimates three out of the last four reports on both the top and bottom line. Every time management has guided lower for the next quarter. This strategy has definitely generated some volatility in the stock price. A quick look at WSM's daily chart and you'll see a lot of big gaps up and down as investors react to news. Yet the overall trend has been higher. Today WSM sits at all-time highs.

Shares have been showing relative strength in 2015 with a +5.4% gain thus far. The point & figure chart is bullish and forecasting a long-term target at $105.00. Tonight I am suggesting a trigger to buy calls at $81.15. Please note that I am suggesting small positions to start. WSM is flirting with and apparently breaking out past a long-term trend line that you can see on the monthly chart below.

*start with small positions* - Suggested Positions -

Long MAR $80 CALL (WSM150320C80) entry $3.20

02/04/15 new stop @ 77.85
02/03/15 triggered on gap higher at $79.35, new trigger was $79.15
02/02/15 Strategy Update: Move the entry trigger from $81.15 to $79.15. Adjust the stop loss to $75.90. Adjust the option strike from March $85 call to March $80 call.
Option Format: symbol-year-month-day-call-strike

Zebra Technology - ZBRA - close: 88.09 change: +0.67

Stop Loss: 83.85
Target(s): To Be Determined
Current Option Gain/Loss: +76.5%
Average Daily Volume = 494 thousand
Entry on January 12 at $80.85
Listed on January 10, 2015
Time Frame: Exit prior to February option expiration
New Positions: see below

02/10/15: These are new all-time highs for ZBRA. Tonight I am suggesting we plan on exiting positions this Thursday (Feb. 12th). More conservative traders may want to exit tomorrow. We don't want to hold our February options over the weekend. I am not suggesting new positions.

Earlier Comments: January 10, 2015:
ZBRA is considered part of the industrial goods sector but they sound more like a technology company. The company website describes them as "Zebra Technologies is a global leader in enterprise asset intelligence, designing and marketing specialty printers, mobile computing, data capture, radio frequency identification products and real-time locating systems. Incorporated in 1969, the company has over 7,000 employees worldwide and provides visibility into valued assets, transactions and people."

Their goods are used by 90% of the Fortune 500 companies. They have almost no debt. Last year they spent almost $3.5 billion buying Motorola Solutions (symbol was MSI). ZBRA's CEO believes that the MSI acquisition will help them capitalize on three big trends: mobility, the Internet of things, and cloud computing.

In February 2014 ZBRA raised their earnings guidance. They did it again two months later in April. Their most recent earnings report was above expectations. ZBRA announced record revenues with sales up +19% in Middle East and Africa, +16% in North America, +11% in Latin America, and +9% in Asia Pacific.

Technically the stock has been stair-stepping higher with a bullish trend of higher lows and higher highs. This past week ZBRA displayed relative strength and broke out to new multi-month highs. The point & figure chart is bullish with a $92.00 target.

Tonight we are suggesting a trigger to buy calls at $80.85. We will plan on exiting positions before ZBRA reports earnings in mid February.

- Suggested Positions -

Long FEB $85 CALL (ZBRA150220C85) entry $1.70

02/10/15 plan on exiting positions this Thursday (Feb 12th)
02/04/15 new stop @ 83.85
01/28/15 new stop @ 81.35
01/12/15 triggered @ 80.85
Option Format: symbol-year-month-day-call-strike

PUT Play Updates

Cummins Inc. - CMI - close: 134.96 change: +0.56

Stop Loss: 140.25
Target(s): To Be Determined
Current Option Gain/Loss: -13.2%
Average Daily Volume = 2.9 million
Entry on February 09 at $134.90
Listed on February 07, 2015
Time Frame: 6 to 8 weeks
New Positions: see below

02/10/15: CMI tagged new relative lows before bouncing back into positive territory . If this bounce continues we can watch for potential resistance in the $137-138 area.

Earlier Comments: February 7, 2015:
Thus far 2015 has not been a great year for shares of CMI. The stock is down -4.2% while the broader market is flirting with a minor gain for the year. CMI is in the industrial goods sector.

The company describes itself as "Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service diesel and natural gas engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins currently employs approximately 54,600 people worldwide and serves customers in approximately 190 countries and territories through a network of approximately 600 company-owned and independent distributor locations and approximately 7,200 dealer locations. Cummins earned $1.65 billion on sales of $19.2 billion in 2014."

CMI's earnings report in late October (Q3) was strong as they beat estimates on both the top and bottom line. Management also offered bullish guidance. Unfortunately conditions have deteriorated in the last three months. CMI is a good example of why we like to avoid holding over a company's earnings report. Their most recent earnings report was February 5th. They beat estimates and delivered record numbers but the stock dropped thanks to lowered guidance.

You have to give credit to analyst firm First Global who downgraded CMI in late January on worries that weak emerging markets would hurt CMI's business. They were correct. Over half of CMI's sales come from outside the U.S. Weak demand overseas (thanks to the global slowdown) and a significantly stronger dollar hurt CMI's results and more importantly their guidance.

CMI's Q4 profit surged +32% from a year ago to $2.56 a share. That's five cents above estimates. Revenues rose +11% from a year ago to $5.1 billion, also above estimates. Their full year revenues hit a record $19.2 billion, thanks in large part to +20% sales growth in North America. Unfortunately most of the world is seeing an economic decline. CMI management lowered their forecast. Previously the company was projecting 2015 sales in the $20-23 billion range. They just lowered their forecast $19.6-20.0 billion in sales for 2015.

This bearish sales forecast send the stock lower. Investors ignored the company's pledge to return 50% of its operating cash flow back to shareholders in 2015. A couple of Wall Street analysts have already lowered their price targets on CMI's stock following the company's guidance.

Technically CMI's stock has broken down from a multi-week consolidation. The recent weakness has generated a new sell signal on the point and figure chart that is forecasting at $122 target. Shares sit just above potential round-number support at $135.00. Tonight we are suggesting a trigger to buy puts at $134.90.

- Suggested Positions -

Long MAR $130 PUT (CMI150320P130) entry $2.65

02/09/15 triggered @ 134.90
Option Format: symbol-year-month-day-call-strike

Nike, Inc. - NKE - close: 92.75 change: +1.58

Stop Loss: 93.15
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 3.5 million
Entry on February -- at $---.--
Listed on February 09, 2015
Time Frame: 8 to 12 weeks
New Positions: Yes, see below

02/10/15: The stock market's widespread gains today helped fuel a bounce in NKE. However, you'll notice the bounce stalled right at short-term technical resistance at its 10-dma.

There is no change from last night's new play description. We are waiting on a breakdown before $90.00 (for now). Nimble traders could watch for a failed rally near the trend line of lower highs (currently about $95 and its 50-dma) as an alternative entry point strategy.

Earlier Comments: February 9, 2015:
Nike is a giant in the footwear and athletic apparel business. They have approximately one third of the global athletic shoe market, selling more than 120 million shoes a year. NKE's recent highs near $100 back in 2014 marked a nearly +400% gain from its 2009 lows near $20 a share.

The company describe itself as "NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets and distributes athletic lifestyle footwear, apparel and accessories, and Hurley International LLC, which designs, markets and distributes surf and youth lifestyle footwear, apparel and accessories."

Just about everyone seems bullish on NKE. Apparel sales have been slow last year but the fastest growth was in athletic apparel. That's because there is a new fashion trend, called Athleisure. Consumers are wearing more athletic clothing and footwear even if they're not that active.

NKE's most recent earnings report was December 18th. It was a great report. NKE delivered earnings growth of +25% with $0.74 a share. Revenues were up +14.8% to $7.38 billion. Both top and bottom line results were above expectations. Gross margins improved +120 basis points to 45.1%. These numbers look great.

Unfortunately the stock is selling off. NKE had previously guided gross margin improvement in the 120-150 basis point range. The market was also disappointed in NKE's future order data. Future orders only grew at +7% or +11% if you exclude currency changes. That's below expectations. It's also below the prior quarter's +14% growth. At 11% NKE's future orders are growing at their slowest pace in a year.

Investors have reacted by consistently selling the rallies in NKE. You can see the trend of lower highs and now a trend of lower lows. This weakness has led NKE to a -4.5% decline in 2015. The point & figure chart has turned bearish with a quadruple bottom breakdown sell signal.

Odds are growing that we will see NKE drop toward its long-term trend line of higher lows (shown on the weekly chart). Tonight we are suggesting a trigger to buy puts at $89.90. More aggressive traders may want to consider jumping in early below today's low at $90.69.

Trigger @ $89.90

- Suggested Positions -

Buy the MAR $90 PUT (NKE150320P90)

Option Format: symbol-year-month-day-call-strike


Whole Foods Market, Inc. - WFM - close: 53.03 change: +0.09

Stop Loss: 51.25
Target(s): To Be Determined
Current Option Gain/Loss: +67.4%
Average Daily Volume = 4.9 million
Entry on January 08 at $50.35
Listed on January 07, 2015
Time Frame: Exit PRIOR to earnings on February 11th
New Positions: see below

02/10/15: WFM didn't participate in the market's rally today. Shares just drifted sideways. Investors are probably wait for the company's earnings report due out tomorrow (after the close).

Our plan was to exit positions at the opening bell this morning. WFM gapped open higher at $53.40 before fading.

- Suggested Positions -

FEB $50 CALL (WFM150220C50) entry $2.30 exit $3.85 (+67.4%)

02/10/15 planned exit this morning
02/09/15 Exit update: plan on exiting tomorrow at the opening bell
02/07/15 plan on exiting Feb. 10th at the closing bell
01/31/15 new stop @ 51.25
01/28/15 new stop @ 49.45
01/08/15 triggered on gap open at $50.35, suggested entry was $50.30
Option Format: symbol-year-month-day-call-strike