Editor's Note:

After the big spike higher in most stocks last week I would expect some profit taking on Mon/Tue under normal conditions. However, with the Russell breaking out to new highs there is a strong possibility the profit taking could be very quick and very shallow. The current portfolio of calls should be somewhat insulated from any dip because the only tech is Cisco and with the March 9th announcement it should be immune from normal selling. The BUCY and TEVA plays are in strong sectors so dips should be bought quickly.

James will be back on Monday

Current Portfolio

CALL Play Updates

CSCO - Cisco Systems - $25.21, change +.26, stop $24.65 *NEW*

No specific news on Cisco but we got the breakout over $25 and Cisco closed at a level not seen since August 2008. After trading in a range from 22.50 to 24.75 since September the breakout ahead of their Internet changing announcement next week is very positive.

Why We Like It:
Cisco is breaking out to a new high on the rebound in the tech sector. On March 9th, Cisco is going to make an announcement that "will change the Internet forever." Their words, not mine. Analysts believe it will be some form of super fast broadband or ultra high-speed system for Internet traffic.

Google recently unveiled plans for its own ultra fast network but my money is on Cisco. Google promised to deliver Internet service at up to 100 times faster than most users have today. I doubt Cisco will let Google beat them and Google does have a nasty habit of announcing products that never appear.

The FCC is presenting a plan to Congress on March 17th that calls for 100 million homes to have access to 100-Megabit per second speeds by 2020. Most cable broadband users have 2-Megabit speeds today so that would be a major upgrade.

Verizon already offers 50-Megabits on its FiOS wireline network and has tested 100-Megabit speeds.

All of these offerings and tests provide a threshold that Cisco will have to beat if they are going to "forever change the Internet." Let's hope they really pull a fast rabbit out of their announcement hat.

Position: CALL APR 25.00 (CSCO 10D25.00) @ $0.65


Entry on March 4th at $ 24.84
Earnings Date N/A
Average Daily Volume = 50.0 million
Listed on March 03, 2010

BUCY - Bucyrus International - $65.82, Change +1.34, Stop $62.50

The coal sector continues to move higher on what seems like good news every day. India is paying $600 million for Trinity Coal. China's JFE Holdings agreed to pay BHP $200 per ton for coking coal in a three month deal. This was higher than the current price of $135 and the expected pricing of $150 for new orders. The demand for coal is growing steadily and every mine needs either BUCY or JOYG equipment to operate. Our exit target remain $68 and the highs from January.

BUCY reported earnings on Feb 18th and reported a 24% jump in profits.

Exit Target = $68.00

Position: CALL APR 65.00 (BUCY 10D6500) @ $3.82


Entry on March 1st at $ 62.56
Earnings Date 02/18/10
Average Daily Volume = 1.75 million
Listed on February 28, 2010

Colgate Palmolive - CL - close: 84.18 change: +.05 stop: 83.25 *NEW*

No news and no move in Colgate. I raised the stop to $83.25. I don't have a lot of hope Colgate is going to move much higher after screeching to a halt at resistance at $84.25. We are so close to the exit target at $85 I don't want to close the trade early. However, I would not recommend new entries in this play.

Our target to exit is $85.00.

Position: CALL MAY 85.00 (CL 10E8500) @ $1.90


Entry on February 20 at $ 81.75
Earnings Date 04/29/10 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on February 20, 2010

TEVA Pharmaceuticals - TEVA - close: 61.66 change: +0.49 stop: 59.50

The court win on exclusivity on the two blockbuster Merck drugs is still powering Teva higher. The MDVN inspired drop on Wednesday has been forgotten and with the 180 day exclusivity on Cozzaar and Hyzaar Teva will be able to charge 90% of the brand name price when it releases the generic versions.

In a survey by the FDA the price of generic drugs averages 93% of the brand name when there was only one generic in the market. Once the number of generics rose to five the price plummeted to 33% of the original. Teva has 180 days of exclusivity at that higher price thanks to the court ruling.

Our target to exit is $64.00.

Position: CALL MAR 60.00 (TVQ 10C6000) @ $.70


Entry on February 20 at $ 58.74
Earnings Date 05/05/10 (unconfirmed)
Average Daily Volume = 5.1 million
Listed on February 20, 2010

PUT Play Updates

*Currently we do not have any put play updates*


VMW - VMWare - $53.95, Change +2.17 *Not Triggered*

We were a day late and a dollar short in trying to enter the Vmware trade. The entry point was $49.50, a price we saw on Monday. In trying to avoid the spike on Tuesday and make a better buy we missed the big move. VMW dipped to 50.50 on three days before taking off for higher ground on Thursday. I am closing this play as *Not Triggered* If you get a chance to buy a dip on VMW the next time the Nasdaq corrects I would recommend it.

Why We Like It:
VM Ware is taking over computing. The rush to virtualize to obtain maximum use of all your servers is revolutionizing the data center. IDC believes only 20% of datacenters are fully converted leaving a whopping 80% as a growing market. As corporations enter the Windows 7 upgrade cycle they will be building out their server farms with the newer software to support all those Windows 7 desktops and that means large numbers of virtualized servers. VMW does not own the market and there are other competitors but they are the strongest and the lead dog in the harness. For those competitors following in their tracks the view is always the same.

We had a $49.50 entry trigger that was never hit.

BUY CALL JUL 55.00 (VMW 10G55)


Entry on March ?? at $ xx.xx <-- NOT TRIGGERED @ $49.50
Earnings Date 04/26/10 (unconfirmed)
Average Daily Volume = 1.75 million
Listed on March 1st, 2010