Editor's Note:

After five weeks of declines the market's pull back has put many of our bullish candidates' up trend in jeopardy of being broken.

We have adjusted our stop loss placement on several trades. Plus, we're closing our Ford trade early.

-James


Closed Plays


Ford has been closed.


Play Updates


Boeing Co. - BA - close: 74.84

06/04 update: Investors have a decision to make. BA was not immune to the market-wide weakness this past week. Shares broke down under their 50-dma and under the $75.00 level, both of which should have been support. The stock is at risk of hitting our stop loss at $73.90. So... do you leave our stop where it is at $73.90 or, after looking at the weekly chart below, do you adjust your stop loss lower to say $72.00 (under support near $72.50) or even adjust it lower (maybe $69.75) so BA gets a chance to bounce from its simple 200-dma.

If you believe the economy is only seeing a "soft patch" and not a double dip and that the market is merely correcting and not reversing then a dip toward BA's long-term up trend could be used as a new entry point. More conservative traders may want to keep their stop loss at $73.90. I am raising the risk on this trade by lowering our stop loss to $69.75, which would be an 8.8% decline from our entry point at $76.50. If BA does indeed drop toward its trendline of higher lows then look for a pull back toward the $72.00-71.50 area.

No new positions at this time. We'll wait and see if BA dips toward the next level of support.

FYI: We only have small positions open to limit our risk.

- Current Positions -
Apr 27, 2011 - entry price on BA @ 76.50, option @ 4.50
symbol: BA1221A80 2012 JAN $80 call - current bid/ask $ 3.65/ 3.75

Apr 27, 2011 - entry price on BA @ 76.50, option @ 4.95
symbol: BA1319A90 2013 JAN $90 call - current bid/ask $ 4.10/ 4.30

06/04/11 re-evaluated our risk and moved the stop loss to $69.75 under the simple 200-dma
05/14/11 New stop loss @ 73.90
04/27/11 Play opened. Small positions.

Chart of BA:

Current Target: $89.00, and $104.00
Current Stop loss: 69.75
Play Entered on: 04/27/11

Originally listed on the Watch List: 03/26/11


BE Aerospace Inc. - BEAV - close: 35.91

06/04 update: Hmm... more conservative traders may want to abandon ship with our BEAV trade. Shares just saw their bounce fail and BEAV is headed for technical support at the 200-dma near $35.25. Currently our stop is at $34.75. If BEAV breaks down past the 200-dma we should get stopped out pretty quick. This will be a key test of BEAV's long-term up trend (see chart below). I am not suggesting new positions at this time.

Note: We have less than two full months left before July options expire!

- Current Positions -
Feb 23, 2011 - entry price on BEAV @ 34.00, option @ 2.75
symbol: BEAV1116G35 2011 JUL $35 call - current bid/ask $ 1.95/ 2.10

05/14/11 Sell at least half now. Bid @ $3.60 (+30.9)
05/14/11 Adjusted upside target to $42.50
05/14/11 New stop loss @ 34.75
04/30/11 New stop loss @ 33.95
04/09/11 New stop loss @ 32.95
04/02/11 New stop loss @ 31.95

Chart of BEAV:

Current Target: $42.50
Current Stop loss: 34.75
Play Entered on: 02/23/11
Originally listed on the Watch List: 01/22/11


Bristol-Myers Squibb Company - BMY - close: 27.98

06/04 update: The three-day correction in BMY has pulled shares under short-term support at $28.00 but the stock managed a meager bounce at technical support near the 50-dma. The correction may not be over yet. I would wait for a dip near $27.00 and its 200-dma before considering new bullish positions. Please note that I am raising our stop loss to $25.90.

Our long-term target is $32.00. Investors might want to consider turning this trade into a calendar spread or vertical spread to maximize its potential.

- Suggested Positions -
Mar 14, 2011 - entry price on BMY @ 26.14, option @ 1.13
symbol: BMY1221A27.5 2012 JAN $27.50 call - current bid/ask $ 1.68/ 1.73

- or -

Mar 14, 2011 - entry price on BMY @ 26.14, option @ 1.63
symbol: BMY1319A27.5 2013 JAN $27.50 call - current bid/ask $ 2.42/ 2.50

06/04/11 New stop loss @ 25.90

Chart of BMY:

Current Target: $32.00
Current Stop loss: 24.95
Play Entered on: 03/14/11
Originally listed in the New Plays 03/12/11


CACI International - CACI - close: 60.17

06/04 update: Warning! CACI's relative strength has vanished. Shares reversed at the $64.00 level and plunged back toward the three-month trend of higher lows. The weekly chart has produced a big bearish engulfing reversal pattern candlestick. We have a stop loss at $59.25. That might be a little bit high since the 100-dma is at $59.00. I'm tweaking our stop down to $58.75 instead. I am not suggesting new positions at this time.

Earlier Comments:
I do consider this a more aggressive trade and if we keep our position size small we can limit our risk. Our first upside target is $69.00. CACI doesn't have LEAPS so we'll have to use the 2011 September calls.

- Current (small) Positions -
Apr 4, 2011 - entry price on CACI @ 62.04, option @ 3.30
symbol: CACI1117I65 2011 SEP $65 call - current bid/ask $ 1.40/ 1.60

- 2nd Position -

May 31, 2011 - entry price on CACI @ 63.14, option @ 2.65*
symbol: CACI1117I65 2011 SEP $65 call - current bid/ask $ 1.40/ 1.60

06/04/11 Adjustment - new stop @ 58.75
*5/31/11 estimate on the entry point of our 2nd position
05/28/11 New stop loss @ 59.25.
05/28/11 New entry point on the bounce. 2nd position above.
05/07/11 New stop loss @ 57.75

Current Target: $69.00
Current Stop loss: 58.75
Play Entered on: 04/04/11
Originally listed on the Watch List: 02/12/11


Canadian Natl. Railway Co. - CNI - close: 76.37

06/04 update: Transport stocks were underperformers on Friday but CNI managed a bounce from its Friday morning lows near $74.50. Taking a step back you can see that CNI has been consolidating sideways the last four weeks plus weeks. This consolidation is inside the larger, longer-term up trend. I wouldn't be surprised to see CNI dip to technical support at its 100-dma. Let's wait and see if shares can bounce off this moving average before considering new positions.

- Current Positions -
Feb 28, 2011 - entry price on CNI @ 72.39, option @ 2.90
symbol: CNI1221A80 2012 JAN $80 call - current bid/ask $ 3.20/ 3.50

05/21/11 new stop loss @ 71.75
05/05/11 new entry point @ 75.00
04/02/11 New stop loss @ 69.00

Current Target: $89.00
Current Stop loss: 71.75
Play Entered on: 02/28/11
Originally listed in the New Plays 02/26/11


Coach Inc. - COH - close: 61.01

06/04 update: COH was a new watch list candidate a week ago. The luxury retail stocks had been outperforming the market. Unfortunately the group reversed this past week. We were waiting to buy a dip at $61.00, which COH hit on Friday. Technically this pull back looks like a new entry point. Yet the market's five-week downtrend does not inspire a lot of confidence. The $58.00 level should be additional support. Let's wait and see if COH holds $60 or dips to $58.00 before considering new bullish positions.

We have a stop loss at $57.40. More aggressive traders may want to use a stop under $55 and its 100-dma instead. The plan was to keep our position size small to limit our risk. Currently our target is $75.00.

- Current Positions -
Jun 03, 2011 - entry price on COH @ 61.00, option @ 4.40
symbol: COH1221A65 2012 JAN $65 call - current bid/ask $ 4.20/ 4.40

- or -

Jun 03, 2011 - entry price on COH @ 61.00, option @ 6.80
symbol: COH1319A70 2013 JAN $70 call - current bid/ask $ 6.00/ 6.80

Chart of COH:

Current Target: $75.00
Current Stop loss: 57.40
Play Entered on: 06/03/11
Originally listed on the Watch List: 05/28/11


Costco Wholesale - COST - close: 77.81

06/04 update: Ouch! It was a painful week for COST. In the last three days the stock has fallen from $82.50 to under $78.00 and under its 50-dma. I am concerned that shares are probably headed for their 100-dma near $75.78 and most likely the $75.00 level. If that's the case then we need to either exit now or adjust our stop lower. Cautious traders will want to exit now. I am adjusting our stop loss to $74.75. At least this way COST has an opportunity to bounce from the $75.00 level without closing the trade. I will repeat that cautious traders will want to exit now since another $3.00 drop will not be healthy for our option values. You could exit now and avoid a loss. I am not suggesting new positions at this time.

- Current Positions -
Apr 7, 2011 - entry price on COST @ 76.37, option @ 3.80
symbol:COST1221A80 2012 JAN $80 call - current bid/ask $ 4.05/ 4.20

- or -

Apr 7, 2011 - entry price on COST @ 76.37, option @ 5.05
symbol:COST1319A85 2013 JAN $85 call - current bid/ask $ 5.40/ 5.65

06/04/11 Adjusting our stop to $74.75
05/21/11 Take Profits - Sell Half now! COST @ 83.40.
2012 $80 call @ $7.55 (+98.6%), 2013 $85 call @ $8.30 (+64.3%)
05/14/11 New stop loss @ 75.75
04/30/11 New stop loss @ 73.40

Current Target: $89.50, 99.00
Current Stop loss: 75.75
Play Entered on: 04/07/11
Originally listed on the Watch List: 01/29/11


Walt Disney Co. - DIS - close: 39.38

06/04 update: Uh-oh! DIS could be in serious trouble. The stock delivered a very bearish weak with Tuesday's failed rally near $42 and its 50-dma followed up with three down days in a row. Friday's breakdown under support at $40 is very bearish. Shares did manage a meager bounce off their exponential 200-dma but the trend is definitely down. DIS should have additional support at its simple 200-dma near $38.70 and at the $38.00 level as well. We have a stop loss at $37.85. Even though there is a chance DIS will bounce at one of these support levels more conservative traders may want to abandon ship anyway and just exit now. I am not suggesting new positions at this time.

- Current Positions -
Oct 27, 2010 - entry price on DIS @ 35.60, option @ 2.23
symbol: DIS1221A40 2012 JAN $40 call - current bid/ask $ 2.63/ 2.67

- or -

Oct 27, 2010 - entry price on DIS @ 35.60, option @ 3.63
symbol: DIS1319A40 2013 JAN $40 call - current bid/ask $ 4.70/ 4.85

06/04/11 DIS is breaking key support. consider an early exit now.
02/12/11 New stop loss @ 37.85
02/09/11 1st Target Hit. Options @ +137% and +103%
02/05/11 New stop loss @ 35.75
01/08/11 New stop loss @ 34.95
01/08/11 Target changed to $43.00 and $46.00
10/27/10 Play opened, DIS opened @ $35.60

Current Target(s): $43.00, 49.00
Current Stop loss: 37.85
Play Entered on: 10/27/10
Originally listed on the Watch List 10/24/10


Dr. Pepper Snapple Group, Inc. - DPS - close: 40.30

06/04 update: This pull back to $40.00 should be a new entry point to launch bullish positions but with the market trending lower readers may want to wait. Consider waiting for shares to bounce from $40.00 before initiating new positions. Currently our exit target is $46.00. DPS does not have LEAPS so we'll have to use the November 2011 calls.

- Current Positions -
May 11, 2011 - entry price on DPS @ 40.55, option @ 2.85
symbol: DPS1119K40 2011 NOV $40 call - current bid/ask $ 2.40/ 2.60

- or -

May 11, 2011 - entry price on DPS @ 40.55, option @ 1.00
symbol: DPS1119K45 2011 NOV $45 call - current bid/ask $ 0.70/ 0.90

Current Target: $46.00
Current Stop loss: 37.95
Play Entered on: 05/11/11
Originally listed on the Watch List: 05/07/11


Darden Restaurants - DRI - close: $48.08

06/04 update: The holiday shortened week turned out to be an ugly one for DRI. Previous winners like luxury retail and restaurants were hammered lower. DRI is now down five days in a row. Shares have fallen through several short-term layers of support. It stalled on Friday near $48 and its 100-dma. The surge in volume on the sell-off is another bearish signal.

I will point out that DRI has a long-term trendline of support near $47.50 and the simple 200-dma near $47.00. I am suggesting we adjust our stop loss to $46.75 to give DRI room to test this level of significant support before it closes our trade. Of course this does raise our risk and potential loss if DRI continues to drop and breaks down through these key levels. I am not suggesting new positions at this time. I also want to add that DRI is due to report earnings on June 30th and conservative traders may want to exit prior to the report and/or avoid launching new positions in front of the report.

- Current Positions -
May 19, 2011 - entry price on DRI @ 52.03, option @ 2.74
symbol: DRI1221A55 2012 JAN $55 call - current bid/ask $ 1.25/ 1.35

- or -

May 19, 2011 - entry price on DRI @ 52.03, option @ 5.50
symbol: DRI1319A55 2013 JAN $55 call - current bid/ask $ 3.30/ 3.90

06/04/11 adjusted stop loss to $46.75, under the 200-dma.

Chart of DRI:

Current Target: $59.50, 64.75
Current Stop loss: 47.40
Play Entered on: 05/19/11
Originally listed on the Watch List: 05/14/11


Brinker International - EAT - close: 24.18

06/04 update: EAT is another restaurant stock that has gone from hero to goat in just a week. Granted the long-term trend is still higher but it is definitely in jeopardy with the bearish reversal this past week. EAT failed at resistance near $26.00 and plunged toward $24.00 and technical support at its 100-dma. I am not suggesting new positions at this time. If there is any follow through lower we will likely get stopped out at $23.90. FYI: We have less than two full months before July options expire.

- Current Positions -
Feb 23, 2011 - entry price on EAT @ 22.50, option @ $ 1.10
symbol: EAT1116G25 2011 JUL $25 call - current bid/ask $ 0.50/ 0.70

05/28/11 New stop @ 23.90
04/02/11 New stop @ 22.90
03/26/11 New stop @ $21.95

Current Target: $29.50
Current Stop loss: 23.90
Play Entered on: 02/23/11
Originally listed on the Watch List: 02/12/11


Fiserv, Inc. - FISV - close: 62.24

06/04 update: I am urging caution on FISV. Shares have reversed at resistance near $65.00 and now the stock is flirting with a breakdown under its 50 and 100-dma. Further weakness will make this look like a bearish double top pattern for FISV. The simple 200-dma has risen to $58.70 so I am raising our stop loss to $58.45. More conservative traders might want to consider a stop closer to the $60 level instead. I'm not suggesting new positions at these levels.

- Suggested Positions -
Feb 14, 2011 - entry price on FISV @ 62.30, option @ 3.20
symbol: FISV1117I65 2011 SEP $65 call - current bid/ask $ 1.65/ 1.80

06/04/11 new stop loss @ 58.45

Current Target: $74.75
Current Stop loss: 58.45
Play Entered on: 02/14/11
Originally listed on the Watch List: 01/29/11
Originally listed in the New Plays 02/12/11


Intel Corp. - INTC - close: 21.73

06/04 update: The correction in INTC continues. As expected the stock hit our buy-the-dip trigger at $22.00. I had cautioned readers to wait and suggested traders wait for a dip near the 50-dma or the 100-dma. INTC hit its 50-dma near $21.75 on Friday. The trend is still down so if you're looking for a new entry point I'd wait. We might get a better entry point near the $21.00 area. Currently we have a stop loss at $20.45, which is under the 200-dma. Our long-term (multi-month targets) is the $26-28 zone.

- Current Positions -
Jun 01, 2011 - entry price on INTC @ 22.00, option @ 1.41
symbol: INTC1221A22.5 2012 JAN $22.50 call - current bid/ask $ 1.24/ 1.27

- or -

Jun 01, 2011 - entry price on INTC @ 22.00, option @ 2.38
symbol: INTC1319A22.5 2013 JAN $22.50 call - current bid/ask $ 2.18/ 2.25

Chart of INTC:

Current Target: $26.00-28.00 zone
Current Stop loss: 20.45
Play Entered on: 06/01/11
Originally listed on the Watch List: 05/07/11


James River Coal Co. - JRCC - close: 20.33

06/04 update: Once again JRCC is threatening the bulls with a breakdown under support at the $20.00 level. It was an ugly week with shares reversing near resistance at $22.00 and closing under its 200-dma a couple of days later. The trend does look bearish and I would seriously consider an early exit right now. The only reason I'm not is that both JRCC and the S&P 500 are still trading above support ($20 for JRCC, 1300 for the S&P 500). We have a stop loss at $19.90 so if the stock continues to sink our trade will be closed soon. More conservative traders may want to exit now anyway. I am not suggesting new positions at this time.

- Current Positions -
Apr 12, 2011 - entry price on JRCC @ 22.50, option @ 3.10
symbol: JRCC1221A25 2012 JAN $25 call - current bid/ask $ 1.40/ 1.75

- or -

Apr 12, 2011 - entry price on JRCC @ 22.50, option @ 4.70
symbol: JRCC1319A27 2013 JAN $27 call - current bid/ask $ 2.40/ 3.00

06/04/11 JRCC has reversed and is now back under its 200-dma. Consider an early exit now.

Current Target: $29.50
Current Stop loss: 19.90
Play Entered on: 04/12/11
Originally listed on the Watch List: 01/22/11


Monsanto Co. - MON - close: 68.79

06/04 update: I warned readers a week ago that MON was poised for some profit taking. What surprised me was the pop over resistance at $70 on Tuesday. That particular move higher appears to be a reaction to an analyst upgrade (Citigroup) for rival agriculture companies Potash Corp. (POT) and Mosaic (MOS). The correction on MON found support Friday near $68 and its 50-dma. That doesn't mean the correction is over. I'm not suggesting new positions at this time. MON is due to report earnings on June 29th.

Prior Comments:
Our plan was to keep our position size small to limit our risk since MON can be so volatile at times. Our long-term targets are the $85-90 zone.

- Current (SMALL) Positions -
Mar 15, 2011 - entry price on MON @ 65.50, option @ 6.75
symbol: MON1221A70 2012 JAN $70 call - current bid/ask $ 6.05/ 6.15

- or -

Mar 15, 2011 - entry price on MON @ 65.50, option @ 8.75
symbol: MON1319A75 2013 JAN $75 call - current bid/ask $ 7.65/ 8.10

04/09/11 New stop loss @ 61.75, Readers may want to exit early now.

Current Target(s): $85.00
Current Stop loss: 61.75
Play Entered on: 03/15/11
Originally listed on the Watch List: 01/08/11


Scotts Miracle Grow Co. - SMG - close: 55.30

06/04 update: The relative strength we saw in SMG two weeks ago has vanished. Shares have reversed sharply lower and SMG broke down under its 100-dma on Friday. Now the stock is flirting with a breakdown under the $55 level. SMG has additional support near $54.00 at its long-term trendline of higher lows. Plus there could be additional support at its 200-dma near $53.30. I'm also concerned that the recent sell-off almost looks like the right shoulder to a bearish head-and-shoulders pattern. More conservative traders may want to exit immediately. I am adjusting our stop loss to $53.00 so it's under the 200-dma. No new positions at this time.

Earlier Comments:
We want to keep our position size small to limit our risk. SMG doesn't have LEAPS so we'll have to buy September calls. Our target is the $65-70 zone.

- Current (SMALL) Positions -
Mar 25, 2011 - entry price on SMG @ 58.00, option @ 3.00
SMG1117I60 2011 SEP $60 call - current bid/ask $ 0.95/ 1.10

06/04/11 new stop loss @ 53.00 (under the 200-dma).

Chart of SMG:

Current Target(s): $65.00-70.00
Current Stop loss: 53.75
Play Entered on: 03/25/11
Originally listed on the Watch List: 03/05/11


Southwestern Energy Co. - SWN - close: 43.73

06/04 update: It was a rocky week for SWN but shares rallied sharply off their Friday morning lows to close up +3.5% on the day and helping SWN post a gain for the week. SWN is still struggling with resistance near $44.00. I am not suggesting new positions at this time.

Earlier comments:
We wanted to keep our position size small to limit our risk.

- Current (SMALL) Positions -
Apr 7, 2011 - entry price on SWN @ 40.50, option @ 2.90
SWN1221A45 2012 JAN $45 call - current bid/ask $ 3.90/ 4.00

- or -

Apr 7, 2011 - entry price on SWN @ 40.50, option @ 5.85
SWN1319A45 2013 JAN $45 call - current bid/ask $ 6.95/ 7.20

05/28/11 new stop loss @ 39.45
05/07/11 New stop loss @ 37.75

Current Target(s): $50.00-52.50
Current Stop loss: 39.45
Play Entered on: 04/07/11
Originally listed on the Watch List: 04/02/11


Union Pacific Corp. - UNP - close: 101.14

06/04 update: UNP tagged a new high on Tuesday only to erase four days of gains on June 1st. Shares found support on Friday near $100 and its 50-dma yet I remain cautious here. The transportation sector looks vulnerable. I am not suggesting new positions at this time. We currently have a stop loss at $97.00, which is under the 100-dma.

- Current Positions -
May 5, 2011 - entry price on UNP @ 100.15, option @ 5.00
UNP1221A110 2012 JAN $110 call - current bid/ask $ 4.30/ 4.40

- or -

May 5, 2011 - entry price on UNP @ 100.15, option @ 6.00
UNP1319A120 2013 JAN $120 call - current bid/ask $ 5.25/ 8.35

05/28/11 New stop loss @ 97.00

Current Target(s): $119.75-134.00
Current Stop loss: 97.00
Play Entered on: 05/05/11
Originally listed on the Watch List: 04/30/11


CLOSED Plays


Ford Motor Co - F - close: 14.01

06/04 update: I am giving up on Ford and suggesting an early exit now. Disappointing vehicle sales in May accelerated the stocks decline. Shares have broken potential support at $14.50. The next stop is likely the March lows near $13.75 but in reality what is there to stop this decline. Investors are growing worried about the consumer and a slow down in the U.S. economy. When we added the second position to the newsletter in early May it looked like Ford would bounce from technical support at its 200-dma. In the last month Ford has broken very significant support. I'm suggesting we hit the brakes and exit now.

FYI: After five weeks of declines and the chance that Ford might bounce from its March lows, more aggressive traders may want to risk holding on for another week or two and exit on a bounce near the $14.50-14.75 area to reduce our losses.

- Suggested Positions -
Feb 28, 2011 - entry price on F @ 15.29, option @ 2.17
symbol: F1221A15 2012 JAN $15 call - Exit @ $0.91 (-58.0%)

- or -

Feb 28, 2011 - entry price on F @ 15.29, option @ 1.50
symbol: F1319A20 2013 JAN $20 call - Exit @ 0.66 (-56%)

- Second Position, listed May 7th, 2011 -

May 9, 2011 - entry price on F @ 15.12, option @ 1.71
symbol: F1221A15 2012 JAN $15 call - exit @ 0.91 (-46.7%)

- or -

May 9, 2011 - entry price on F @ 15.12, option @ 1.09
symbol: F1319A20 2013 JAN $20 call - Exit @ 0.66 (-36.6%)

06/04/11 Exit early. Ford @ $14.01
06/04/11 Options @ -58.0%, -56%, 2nd position: -46.7%, -36.6%
05/28/11 Ford is growing weaker. Conservative traders may want to exit early now.
05/21/11 New stop loss @ 13.49
05/07/11 New entry point on bounce from $15.00
03/26/11 New stop loss @ $12.95

Chart of F:

Current Target: $19.75, and $24.00
Current Stop loss: 13.49
Play Entered on: 02/28/11
Originally listed in the New Plays 02/26/11