12:15pm (EST)

NetApp (NTAP, $18.65, up $0.61) is having a sweet day as cloud computing and takeover talk continue to spur gains for the sectors. NetApp has been performing well all week and today’s 3% jump has provided some momentum for our call options.

The May 17.50 calls (NULEW, $1.90, up $0.55) were profiled on April 4th at $1.10 and our exit target is $2.20. We may have to raise that. The May 20 calls (NULED, $0.73, up $0.28) have almost doubled from our entry price of 40 cents. Our exit target is 80 cents but these calls could go to a $1 if the stock breaks $19 today. Keep holding both but place stops 25% above your entry price to protect profits.

Another stock doing well today is VMWare (VMW, $32.99, up $2.77). Actually, it is on F-I-R-E! The is the latest name to throw into the “potential takeover” chatter but VMWare has a solid business. IBM (IBM, $103.45, up $1.14) would love to get its hands on this company which is mostly owned by EMC (EMC, $12.74, up $0.27).

VMWare reports after the bell and the May 35 calls (MKTEG, $1.40, up $0.70) have been getting some attention today. Watch ’em.

Rick Rouse