12:05pm (EST)

The market has turned positive after a weak open as worries over a possible global flu outbreak makes the rounds. The president has said there should be “no alarm” but governments around the world are stepping up efforts to contain the spread of a possible swine flu outbreak. The virus has killed over 100 people in Mexico and there have been cases reported in the United States and Canada.

Naturally, “swine flu” stocks are getting a huge lift this morning but don’t get caught up in the hype. BioCryst Pharmaceuticals (BCRX, $4.01, up $1.80) and Novavax (NVAX, $3.05, up $1.63) have soared this morning but are off their highs. BioCryst opened at $3.81 and has traded as high as $4.89. Novavax opened at $3.53 and hit a high of $3.88 earlier this morning. The reality is these stocks will fade once the worries are over with but investors who have done their homework know BioCryst’s doesn’t even have a flu drug available. It is developing a drug called Peramivir but it is still in clinical trials.

Looking elsewhere, Dendreon (DNDN, $21.92, up $1.84) has been testing $22 all morning and if we can get over that level, the shorts could start to “feel the squeeze”. To us, it “feels” like Christmas morning all over again…

In the Monday Morning playbook, I mentioned a couple of plays that I liked and one of them was Jacobs Engineering Group (JEC, $46.25 up $0.59). I liked the May 50 calls (JECEJ, $1.20, up $0.10) for under a $1.00 and they opened at 75 cents this morning as the stock opened under $45. If the stock can rally to $47, we should have an easy double. Otherwise, if we start to fade, set stops at $1.00.

I also mentioned MasterCard (MA, $168.66, down $4.43) and was looking to get into the May 190 calls (MALER, $2.50, down $0.45) for under $2.00. The calls have traded to a low of $2.30.

Rick Rouse