NASDAQ OMX (NDAQ), Intercontinental Exchange (ICE) offered $42.50 per share to acquire NYSE Euronext (NYX). April and June call option implied volatility is at 22; below its 26-week average of 32 according to Track Data, suggesting decreasing price movement.

Pier 1 Imports (PIR) April put option implied volatility is at 58, June is at 54; near its 26-week average of 56 according to Track Data, suggesting non-directional price movement into the expected release of Q4 results on April 7.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Last summer's swoon in Electronic marketplace Inc.'s (ICE) stock is ancient history, as ICE has powered through $120 and is now testing $130. ICE, first discussed on June 2, 2009 at a price of $115.15, has the right business model -- futures contracts and more -- at the right time. ICE will likely post a 2011 revenue gain of 15-18% in 2011, followed by another double-digit increase in 2012.

Further, in 2011, the new, more-rigorous regulatory environment should create a trading environment for credit default swaps that's more fair and transparent, and these factors should help boost ICE's electronic trading, energy products trading, and clearing house function revenue streams. Demand for primary futures contracts products for Brent and West Texas Intermediate crude remain strong, and its deal to acquire Climate Exchange Plc., should be good for earnings in 2011.

Analyst Upgrades

• Expedia (EXPE) to buy from hold at Citigroup.
• Weatherford (WFT) to outperform from market perform at Wells Fargo.
• Abercrombie & Fitch (ANF) to buy from neutral at BofA/Merrill.
• MDC Holdings (MDC) to outperform from neutral at Credit Suisse.
• AutoNavi (AMAP) to buy from neutral at Goldman.
• Ciena (CIEN) and Nvidia (NVDA) to neutral from underweight at JPMorgan.
• Canadian Pacific (CP) to outperform from market perform at Raymond James.
• First Midwest (FMBI) and Quiksilver (ZQK) to buy from hold at Jefferies.
• Sonic (SONC) to neutral from negative at Susquehanna.
• MIPS Technologies (MIPS) to buy from hold at Benchmark Co.
• Arrow Electronics (ARW) and Avnet (AVT) to buy from hold at Stifel Nicolaus.

If you took advantage of, as outlined in September, to scoop-up some shares of IntercontinentalExchange Inc. (ICE) during its late summer swoon, you made the correct move.

Electronic marketplace IntercontinentalExchange Inc., first discussed on June 2, 2009 at a price of $115.15, has rebounded decisively, powering above key, psychological resistance at $100 to trade at/near $120 on Friday, and I obviously still like the shares here.

Look for ICE to post revenue gains of 7-9% in 2010, followed by a solid, double-digit increase in 2011.

Analyst Upgrades

• Verisk (VRSK) was upgraded to outperform from market perform at Wells Fargo.
• Marriott (MAR) was upgraded to outperform from market perform at Bernstein.
• Jefferies upgraded Teekay (TK) and Tsakos Energy (TNP) to Buy from Hold.
• Cadence Design (CDNS) was upgraded to sector perform from underperform at RBC Capital.
• BofA/Merrill upgraded NV Energy (NVE) to buy from underperform and Education Realty Trust (EDR) to neutral from underperform.
• Men's Wearhouse (MW) was upgraded to buy from hold at Stifel.
• William Blair upgraded Atheros (ATHR) to outperform from market perform.
• Freeport McMoran (FCX) was upgraded to buy from hold at Argus.

The shares of electronic marketplace IntercontinentalExchange Inc. (ICE), first discussed on June 2, 2009, at a price of $115.15, fell this summer and came dangerously close to the sell/stop loss at $88. Even so, the shares appeared to have bottomed at $90 -- creating an attractive price for investors who can tolerate moderate risk.

Look for ICE to post revenue gains of 7% to 9% in 2010, followed by a solid, double-digit increase in 2011.

Don't look now, but the shirt in your back could be worth more today. Why? Cotton prices are surging due to supply shortages.

Rumors often drive commodity prices. Pakistan is experiencing the worst flooding in history. Pakistan is the world's fourth largest grower of cotton. Another rumor of frost in China added to the rally. China is the world's largest cotton producer. India is placing high export duties on cotton, thus fueling the rally, according to data reported by the Financial Times.

Analyst Upgrades

• UBS said Martin Marietta's (MLM) Q2 showed evidence of leverage to a recovery and the firm views risk/reward in shares as attractive. Shares were upgraded to buy from neutral, but its price target was lowered to $96 from $101.
• Soleil upgraded Regis (RGS) to buy from hold after the company said it is exploring strategic options. The firm raised its target for shares to $26 from $14.
• Wunderlich upgraded Sirius XM Radio (SIRI) to buy from hold with a $1.50 price target following the company's Q2 results. The firm believes Sirius' product continues to resonate with healthier higher-end consumers and notes that CEO Mel Karmazin said a resolution could be reached with Howard Stern by the Q3 conference call.
• Magellan Midstream (MMP) was upgraded to outperform from sector perform at RBC Capital.
• Savient (SVNT) was upgraded to neutral from underperform at BofA/Merrill.
• EMS Tech (ELMG) was upgraded to buy from hold at Needham.

The price of coffee has surged to a 12-year high. The nearby September futures contract on the IntercontinentalExchange (ICE) traded at 178.75, up 3.2%, the highest price since 1998.

As with most commodity rallies, the market is driven by shortages of premium Arabica beans from Colombia. Last year, supplies of Colombian coffee plunged to a 33-year low of 7.8 million bags, down nearly one-third from 11.1 million bags in 2008.

Based on these numbers, industry executives forecast that prices could rise to $2.00 per pound. At retail you can more than double this price.

Analyst upgrades:

• BMO Capital upgraded Intercontinental Exchange (ICE) to Outperform from Market Perform based on valuation and the company's growth outlook. The firm has a price target of $125 on the stock.
• Morgan Keegan upgraded WESCO (WCC) to Outperform from Market Perform ahead of Thursday's earnings report based on valuation and expectations for stronger than expected sales.
• Keefe Bruyette upgraded Bank of Marin (BMRC) to Outperform from Market Perform with a $40 price target following the company's Q2 results.
• BHP Billiton (BHP) was upgraded to Overweight from Equal Weight at Barclays.
• PPG Industries (PPG) was upgraded to Overweight from Equal Weight at Morgan Stanley.
• Schnitzer Steel (SCHN) was upgraded to Buy from Neutral at UBS.

I first discussed Intercontinental Exchange Inc. (ICE) here on June 2, 2009, at a price of $115.15, and shares of electronic marketplace have not advanced as much as expected since the February review, but I still like the shares. Here's why:

There are legitimate concerns that a new, more-rigorous regulatory environment will increase position limits and place other restrictions on proprietary trading, hurting trading volumes.

Analyst Upgrades

• Jefferies upgraded St. Jude (STJ) to buy from hold and raised its target to $49 from $39. The firm cites valuation and the positive impact from the Boston Scientific (BSX) ICD recall for the upgrade. Shares were also upgraded to neutral from sell at Goldman, as the firm sees upside for shares into Q1 results.
• RBC Capital upgraded EMC Corp. (EMC) to outperform from sector perform and raised its target to $22 from $21. The firm upgraded shares based on valuation and believes the company can meet or modestly beat March quarter expectations.
• Auriga upgraded MetroPCS (PCS) to buy from hold as it believes customer migration away from postpaid to prepaid may be accelerating. The firm raised its target for shares to $9 from $7.
• Caterpillar (CAT) was raised to outperform from neutral at Baird.
• Best Buy (BBY) was upgraded to market perform from underperform at FBR Capital.
• Expedia (EXPE) was upgraded to overweight from neutral at Piper Jaffray.

Analyst Upgrades

• JPMorgan upgraded Lamar Advertising (LAMR) to overweight from neutral following the company's Q4 results. The firm has a $36 price target on shares.
• Canaccord upgraded St. Mary Land & Exploration (SM) to buy from speculative buy based on the company's business model transformation. The firm has a $45 target on shares.
• Jefferies upgraded Rosetta Stone (RST) to buy from hold following the Q4 report and guidance. The firm has a $29 target on shares.
• GlaxoSmithKline (GSK) and AstraZeneca (AZN) were upgraded to neutral from sell at Goldman.
• China Unicom (CHU) was upgraded to buy from sell at Deutsche Bank.
• Repsol (REP) was upgraded to overweight from equal weight at Barclays.

Electronic marketplace IntercontinentalExchange (ICE), which I first wrote about on June 2, 2009 at a price of $115.15, is still favored at this juncture. Here's why:

In general, institutional investors have kept ICE in the 'tired stock, not broken company' category for about 15 months. Near-term, IIs are concerned that uncertainty regarding U.S. economic growth -- and potential new regulations from Washington - - could weigh on trading volumes.

Analyst Upgrades

• Deutsche Bank upgraded Intercontinental Exchange (ICE) to buy from hold on valuation following the recent pullback in shares. The firm raised its target price on shares to $113 from $108.
• UBS upgraded General Dynamics (GD) to buy from neutral based on improved defense risk profile and stabilization in the business jet market. The firm raised its target to $80 from $70.
• FBR Capital upgraded SunTrust (STI) to outperform from market perform on expectations that regional banks will outperform the large money center banks in this environment. The firm raised its price target on shares to $28 from $22.
• SAP AG (SAP) was upgraded to buy from neutral at BofA/Merrill.
• Thomson Reuters (TRI) was raised to buy from hold at Citigroup.
• Rosetta Resources (ROSE) was upgraded at Wells Fargo to outperform from market perform.