Editor's Note:

Growing concerns over the debt ceiling extension and lawmakers inability to get a deal done has powered a widespread decline in the U.S. market. A round of negative economic data did not help matters. It was one of the worst weeks for stocks all year long. We saw a handful of trades get stopped out.

If we don't see a deal in Washington by Monday morning we're going to see even more trades get stopped out.

-James


Closed Plays


CACI, CNI, DPS, NGLS, and PEP were stopped out.


Play Updates


Bristol-Myers Squibb Company - BMY - close: 28.66

07/30 update: BMY slowly faded lower toward support near $28.50. Although shares did see a pop on Thursday thanks to the earnings news. BMY reported profits one cent better than expected and raised its 2011 guidance. If the market doesn't bounce soon BMY will break support and then shares are probably facing a drop toward the 200-dma near $27.

Our plan was to take some money off the table on Wednesday, July 27th at the closing bell just in case BMY missed the earnings numbers. The 2012 Jan. $27.50 call was trading with a bid at $2.19 (+93.8%) and the 2013 Jan. $27.50 call had a bid at $2.95 (+80.9%).

I am not suggesting new positions at this time.

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 $ 2.13/ 2.18

- or -

Mar 14, 2011 - entry price on BMY @ 26.14, option @ 1.63
symbol: BMY1319A27.5 2013 JAN $27.50 call - current bid/ask $ 2.96/ 3.05

07/27/11 taking profits. Options @ $2.19 (+93.8%) & $2.95 (+80.9%)
07/23/11 Plan taking some profits on July 27 at the close. Or consider taking so money off the table now.
06/25/11 New stop loss @ 26.95
06/04/11 New stop loss @ 25.90

Current Target: $32.00
Current Stop loss: 26.95
Play Entered on: 03/14/11
Originally listed in the New Plays 03/12/11


Coach Inc. - COH - close: 64.56

07/30 update: After two weeks of consolidating sideways above the $65 level shares of COH have finally started to correct. Shares dipped toward their 50-dma on Friday. If you are worried that COH might sell-off on its earnings report then Monday is your last chance to exit. COH will report earnings on Tuesday morning (Aug. 2nd). Wall Street is looking for a profit of 65 cents a share.

I've been warning readers to expect a dip toward $62. Now we have to worry how far will COH fall if there is no debt deal in Washington come Monday. I am not suggesting new positions at this time.

The plan was to keep our position size small to limit our risk.

- Current Positions -
Jun 03, 2011 - entry price on COH @ 61.00, option @ 4.40
symbol: COH1221A65 2012 JAN $65 call - current bid/ask $ 5.70/ 5.90

- or -

Jun 03, 2011 - entry price on COH @ 61.00, option @ 6.80
symbol: COH1319A70 2013 JAN $70 call - current bid/ask $ 7.80/ 8.10

07/09/11 New stop loss @ 59.00, targets are $74.00 & $79.00
07/02/11 Look for some profit taking after the big rally
06/25/11 COH appears to be forming an H&S pattern. Consider an early exit now.
06/18/11 COH looks weak. Readers may want to consider an early exit.

Current Target: $74.00 & $79.00
Current Stop loss: 59.00
Play Entered on: 06/03/11
Originally listed on the Watch List: 05/28/11


Costco Wholesale - COST - close: 78.25

07/30 update: Our COST play is in jeopardy here. The stock has dipped toward its early June lows and closed under what should have been technical support at the 100-dma. COST did rebound off its Friday low of $77.19 but the rebound was stalling under new short-term resistance at $79.00. If there is no debt ceiling deal by Monday I would expect COST to hit our stop loss at $76.75. More aggressive traders might want to consider placing their stop loss under $75.00 or under the 200-dma instead. If there is a deal on Monday then I would expect a bounce. I am not suggesting new bullish 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 $ 3.85/ 4.00

- or -

Apr 7, 2011 - entry price on COST @ 76.37, option @ 5.05
symbol:COST1319A85 2013 JAN $85 call - current bid/ask $ 5.35/ 5.65

07/16/11 Cautious traders may want to exit now
07/09/11 new stop loss @ 76.75
06/25/11 expecting a dip toward the 100-dma
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: 76.75
Play Entered on: 04/07/11
Originally listed on the Watch List: 01/29/11


Energy XXI Ltd. - EXXI - close: 32.81

07/30 update: Our buy-the-dip trigger in EXXI was hit on July 27th. Shares have been slowly consolidating lower with a short-term bearish trend of lower highs and lower lows. The stock should have support at $32.00 but if the $32 level breaks then it could be a quick trip toward support near $30 and its 200-dma. Readers may want to wait on launching new positions. While EXXI is not normally a volatile stock the resolution to the debt ceiling deal might cause some swings. If we do see a dip toward $30.00 I'd take it.

We started this play with a stop loss at $27.75, which is just under the June low. More conservative traders may want to use a stop closer to the $30.00 level instead. Our long-term targets are $44.00 and $49.50.

NOTE: Right now the spreads on the Jan. 2013 calls are outrageously wide. I would not use them at this time although you could try placing a limit order inside the spread.

- Current Positions -
Jul 27, 2011 - entry price on EXXI @ 32.50, option @ 2.00
symbol:EXXI1221A40 2012 JAN $40 call - current bid/ask $ 1.75/ 2.05

- or -

Jul 27, 2011 - entry price on EXXI @ 32.50, option @ 6.00
symbol:EXXI1319A40 2013 JAN $40 call - current bid/ask $ 2.90/ 6.70

07/30 spreads on the 2013 calls are too wide!
07/27 triggered @ 32.50.

Chart of EXXI:

Current Target: $44.00, 49.50
Current Stop loss: 27.75
Play Entered on: 07/27/11
Originally listed on the Watch List: 07/09/11


Fiserv, Inc. - FISV - close: 60.36

07/30 update: FISV reported earnings on July 26th. The company beat the estimate by 5 cents with revenues that were slightly above expectations. Guidance was only in-line with estimates. Shares spiked higher on the news and immediately reversed. That's the failed rally you see on Wednesday morning. Now the stock is testing key support near $60.00 and its 200-dma. FISV actually looks poised for a breakdown but its short-term future probably depends on the debt ceiling deal. If we do see a deal then I'm expecting the market to gap open higher. If there is no deal then FISV will likely gap open lower and under our stop loss at $59.45. I am not suggesting new bullish positions at this time.

NOTE: We only have seven weeks before these September options expire. If FISV does gap down these options will likely see the bid vanish. The newsletter will close this trade at a loss but personally I'd hold these just in case FISV rebounds before expiration to try and recoup some capital.

- Suggested Positions -
Feb 14, 2011 - entry price on FISV @ 62.30, option @ 3.20
symbol: FISV1117I65 2011 SEP $65 call - current bid/ask $ 0.35/ 0.55

07/23/11 new stop loss @ 59.45
07/09/11 readers may want to consider a 2nd position.
06/25/11 new stop loss @ 58.95
06/04/11 new stop loss @ 58.45

Current Target: $74.75
Current Stop loss: 58.95
Play Entered on: 02/14/11
Originally listed on the Watch List: 01/29/11
Originally listed in the New Plays 02/12/11


Flotek Industries Inc. - FTK - close: 9.43

07/30 update: Our aggressive trade in FTK is off to a rough start. The market just saw one of its worst weeks of the year! FTK has retreated -10% in a week. I did caution readers that it was a very aggressive entry point and that I wanted to buy calls on a dip near $9.50 instead. Bingo! We're at $9.50. I would buy calls here but the stock is likely to gap open one way or the other come Monday morning due to the debt debacle in Washington.

The plan was to keep our position size very small, either 1/2 or 1/4 our normal trade size to keep some cash in reserve in case we see a pull back. Well now we have the pull back. I am suggesting new positions (you can see the 2nd position below) but only if both the S&P 500 and FTK open in positive territory on Monday morning. Remember, I'm expecting a gap open.

Earlier Comments:
FTK has above average short interest (about 12%) and a very small float (39 million shares) so there is a chance the stock could see another short squeeze higher. We want to keep positions small.

- Small Positions (1/4 or 1/2 your normal trade) -
Jul 25, 2011 - entry price on FTK @ 10.41, option @ 2.40
symbol: FTK1217C10 2012 MAR $10 call - current bid/ask $ 1.70/ 1.85

- or -

Jul 25, 2011 - entry price on FTK @ 10.41, option @ 1.50
symbol: FTK1217C12.5 2012 MAR $12.50 call - current bid/ask $ 1.00/ 1.15

- 2nd Position, listed 07/30/11 -

Aug 1, 2011 - entry price on FTK @ --.--, option @ -.--
symbol: FTK1217C10 2012 MAR $10 call - current bid/ask $ 1.70/ 1.85

07/30/11 Listed 2nd Position to buy the dip near $9.50 but only if FTK and the S&P 500 open higher on Monday, Aug. 1st.

Current Target: $14.75
Current Stop loss: 8.90
Play Entered on: 07/25/11
Originally listed in the New Plays 07/23/11


Intel Corp. - INTC - close: 22.33

07/30 update: Semiconductor stocks have been struggling. The SOX index failed near short-term resistance at 410 on Tuesday and has now fallen back toward its July lows near support at 380. The current trend is a bearish one of lower highs for the SOX. Meanwhile INTC has retreated from the top of its recent trading range near $23.25 back down toward the $22.20-22.00 zone. The $22.00 level is support and I would be tempted to buy calls again if we see a resolution to the debt ceiling issue.

- 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 $ 1.40/ 1.44

- or -

Jun 01, 2011 - entry price on INTC @ 22.00, option @ 2.38
symbol: INTC1319A22.5 2013 JAN $22.50 call - current bid/ask $ 2.42/ 2.51

07/09/11 new stop loss @ 20.85

Current Target: $26.00-28.00 zone
Current Stop loss: 20.85
Play Entered on: 06/01/11
Originally listed on the Watch List: 05/07/11


Kaiser Aluminum - KALU - close: 55.82

07/30 update: KALU reported earnings on July 27th and beat estimates by 10 cents with a profit of 63 cents a share. Revenues rose +20%. The stock did not see much reaction on Thursday morning. Then Thursday afternoon saw a dip toward the rising 50-dma but KALU quickly rebounded. Friday produced a +3.6% gain in a big display of relative strength.

Unfortunately, I am very frustrated to report that the option spread problem with KALU's December options has gotten worse. Last week the spread was a bid of $2.15 to $6.50. Today there is no bid and the ask is $3.60. My comments from last week remain unchanged. If these spreads do not improve we will not trade KALU again. I remain bullish on the stock so investors may want to consider just buying the stock instead.

Earlier Comments:
Our long-term targets are $64.00 and $69.00 but that might be a little too optimistic since KALU does not have LEAPS. FYI: The Point & Figure chart for KALU is forecasting a long-term target of $65.00. NOTE: KALU does not have LEAPS so we are choosing to play the 2011 December calls.

- Suggested Positions -
Jul 11, 2011 - entry price on KALU @ 53.56, option @ 2.35
symbol: KALU1117L60 2011 DEC $60 call - current bid/ask $ -.--/ 3.60

07/30 still have problems with the spreads (bid 0.00/3.60)
07/23 problems with the December option spreads ($2.15/6.50)

Current Target: $64.00, 69.50
Current Stop loss: 49.75
Play Entered on: 07/11/11
Originally listed in the New Plays 07/09/11


The Coca-Cola Co. - KO - close: 68.01

07/30 update: The market lost about -4% for the week. KO gave up -2.4%. Shares opened at $69.12 last Monday and have slowly faded toward the $68 level. Short-term technical oscillators are turning bearish but the long-term trend is still up. I would still consider new positions here but readers may want to wait. This coming week could be volatile as stocks react to the debt ceiling news.

Our plan was to keep our opening positions small, 1/4 to 1/2 your normal trade size.

Earlier Comments:
The Point & Figure chart is forecasting a long-term target of $95. Our long-term targets are $79 and $84. I see this as an 18-month investment. We will list the 2012 January calls but don't expect KO to hit our targets by then.

- Suggested (SMALL) Positions -
Jul 25, 2011 - entry price on KO @ 69.12, option @ 2.25
symbol: KO1221A70 2012 JAN $70 call - current bid/ask $ 1.76/ 1.81

- or -

Jul 25, 2011 - entry price on KO @ 69.12, option @ 2.40
symbol: KO1319A75 2013 JAN $75 call - current bid/ask $ 2.07/ 2.17

Current Target: $79.00 & 84.00
Current Stop loss: 64.90
Play Entered on: 07/25/11
Originally listed in the New Plays 07/23/11


Monsanto Co. - MON - close: 73.48

07/30 update: MON gave up -2.5% versus the market's -4% drop last week. Shares managed to hit a new 52-week high on Monday but the rally didn't last. The move now looks like a potential bull-trap maneuver with the close over $76 and then Tuesday's reversal. Shares are currently testing short-term support near $73. If the market sells off on lack of a debt deal in Washington then I would not be surprised to see MON drop toward $70 and its 50-dma. I am not suggesting new bullish positions at this time.

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 $ 8.05/ 8.15

- or -

Mar 15, 2011 - entry price on MON @ 65.50, option @ 8.75
symbol: MON1319A75 2013 JAN $75 call - current bid/ask $10.00/10.30

07/23/11 new stop loss @ 67.00
07/02/11 new stop loss @ 64.00
06/25/11 Earnings are June 29th. Consider exiting ahead of the announcement.
06/18/11 Get defensive. Consider raising your stop loss or reducing your position size. Decide if you're willing to hold over the earnings report or if you'll exit early prior to the announcement.
04/09/11 New stop loss @ 61.75, Readers may want to exit early now.

Current Target(s): $85.00
Current Stop loss: 67.00
Play Entered on: 03/15/11
Originally listed on the Watch List: 01/08/11


Southwestern Energy Co. - SWN - close: 44.56

07/30 update: Ouch! The combination of earnings and the market's widespread plunge on Friday morning knocked SWN for a big loss. The stock gapped open lower on Friday at $45.98 and then plunged to a -6.1% decline. We were worried about a sell-off on earnings, which is why I suggested we take some money off the table on July 28th at the closing bell. The 2012 Jan $45 call closed with a bid of $5.75 (+98.2%) and the 2013 Jan $45 call closed with a bid of $9.05 (+54.7%). Both options were hammered lower on Friday.

The company reported earnings that were four cents better than expected with a profit of 48 cents a share. Revenues surged almost +30%. These results garnered SWN some bullish analyst comments on Friday morning but it wasn't enough. I will point out that shares stalled near prior resistance and what should be support in the $44.50-44.00 zone. A bounce from this level could be used as a new entry point. Unfortunately, if we do get a debt ceiling deal in Washington then SWN will likely gap open higher. If we don't see a deal, well, you get the idea.

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 $ 4.00/ 4.15

- or -

Apr 7, 2011 - entry price on SWN @ 40.50, option @ 5.85
SWN1319A45 2013 JAN $45 call - current bid/ask $ 7.25/ 7.65

07/28/11 Planned exit to take some money off the table at the closing bell. 2012 Jan. $45 call bid $5.75 (+98.2%), 2013 Jan. $45 call bid $9.05 (+54.7%)
07/23/11 new stop loss @ 43.90
07/23/11 Prepare to take profits on July 28th at the close.
07/16/11 new stop loss @ 41.95, targets adjusted to $52.00 & 57.50
07/02/11 SWN has reversed higher and stalled at resistance near $44.
06/25/11 SWN looks poised to drop toward support near $40.00.
05/28/11 new stop loss @ 39.45
05/07/11 New stop loss @ 37.75

Current Target(s): $52.00, 57.50
Current Stop loss: 43.90
Play Entered on: 04/07/11
Originally listed on the Watch List: 04/02/11


Union Pacific Corp. - UNP - close: 102.48

07/30 update: The Dow Jones Transportation index is on the verge of a significant breakdown. This index violated its 200-dma on an intraday basis Friday morning. This is also near the long-term trendline of higher lows. Yet while the transports as a group saw some serious profit taking, the profit taking in UNP wasn't that bad. If we fail to get a debt deal by Monday morning then we will probably see UNP hit our stop loss at $98.00. If there is a deal then UNP will hopefully breakout past resistance near $105. I would hesitate to launch new positions here.

- Current Positions -
May 5, 2011 - entry price on UNP @ 100.15, option @ 5.00
UNP1221A110 2012 JAN $110 call - current bid/ask $ 4.25/ 4.40

- or -

May 5, 2011 - entry price on UNP @ 100.15, option @ 6.00
UNP1319A120 2013 JAN $120 call - current bid/ask $ 6.15/ 7.10

07/23/11 new stop loss @ 98.00
05/28/11 New stop loss @ 97.00

Current Target(s): $119.75-134.00
Current Stop loss: 98.00
Play Entered on: 05/05/11
Originally listed on the Watch List: 04/30/11


Wellpoint Inc - WLP - close: 67.55

07/30 update: Whoa! It's been a really, really bad week for WLP. The company reported earnings on July 27th. The company beat Wall Street's estimates by three cents and beat the revenue estimate as well. Guidance was mixed but it appeared inline with prior numbers. Yet the stock was getting hammered in pre-morning trading on Wednesday. Of course Wednesday was the same day the entire market plunged lower. The combination of investors unhappy with the earnings report and the market-wide plunge produced a big drop in WLP. The stock gapped open at $71.19 and then dropped to $68.70 at the close on the 27th. Our trigger to buy the dip at $70.00 was hit. Unfortunately, the market and WLP continued to fall for the rest of the week. Shares of WLP violated technical support at its rising 200-dma on Friday morning and hit a low of $66.68. Our stop loss happens to be $66.50.

This move lower seems to be extremely overdone. Of course now the short-term direction for WLP will depend on Washington's ability to get a debt ceiling resolution. If we get a deal WLP will likely rebound and gap open higher on Monday. If not, we'll shares will probably gap open below our stop loss. I would buy a bounce here but that depends on how big the gap up on Monday is.

Earlier Comments:
We want to keep our position size small to limit our risk.

- Current Positions -
Jul 27, 2011 - entry price on WLP @ 70.00, option @ 3.00
WLP1221A75 2012 JAN $75 call - current bid/ask $ 2.35/ 2.45

- or -

Jul 27, 2011 - entry price on WLP @ 70.00, option @ 5.75
WLP1319A80 2013 JAN $80 call - current bid/ask $ 4.80/ 5.15

Chart of WLP:

Current Target(s): $80.00 & 89.00
Current Stop loss: 66.50
Play Entered on: 07/27/11
Originally listed on the Watch List: 06/25/11


Zimmer Holdings, Inc. - ZMH - close: 60.02

07/30 update: ZMH underperformed this past week with a -5% decline. The company reported earnings on July 27th. ZMH beat estimates by two cents and revenues were also a beat. Yet guidance was only in-line with expectations. The stock saw a temporary rebound from the $60 level but the rally stalled at $62 since the market was plunging on Wednesday. The retreat lower continued and now ZMH is facing support near $60 and its simple 200-dma. Of course now the short-term direction is probably up to lawmakers in Washington. If we get a deal then ZMH should bounce. If not then ZMH will most likely hit our stop loss at $58.90. I do have to point out that the recent weakness in ZMH has produced the right shoulder to a bearish head-and-shoulders pattern. Now these patterns do not guarantee a sell-off but it's a very worrisome signal. A close under $59.00 would produce a new sell signal that would forecast a drop toward $50.00. I am not suggesting new positions at this time.

Earlier comments:
Healthcare stocks had been one of the market's strongest sectors. When this market correction is over I expect healthcare to remain popular with investors. I like ZMH since an aging baby boomer population is going to see rising demand for ZMH's replacement joints and implants.

- Current Positions -
Jun 10, 2011 - entry price on ZMH @ 63.00, option @ 4.00
ZMH1221A65 2012 JAN $65 call - current bid/ask $ 3.20/ 3.50

- or -

Jun 10, 2011 - entry price on ZMH @ 63.00, option @ 5.50
ZMH1319A70 2013 JAN $70 call - current bid/ask $ 4.30/ 4.70

07/23/11 ZMH just failed at the 50-dma again. Cautious readers may want to scale back or exit early prior to the earnings report.
07/09/11 Look for a dip or a bounce near $63 as an entry point.
06/25/11 We are still expecting a dip toward $60.00. Wait for a bounce from this level before considering new positions.

Current Target(s): $78.50 & 88.50
Current Stop loss: 58.90
Play Entered on: 06/10/11
Originally listed on the Watch List: 04/30/11


CLOSED Plays


CACI International - CACI - close: 59.08

07/30 update: CACI finally broke support and now its long-term trend is in jeopardy. I warned readers four weeks ago that the action in early July looked like a potential top. Now the stock has fallen, almost nonstop, for three and a half weeks. This past week saw a breakdown under the $60.00 level. Our stop loss was hit at $59.75.

Earlier Comments:
I do consider this a more aggressive trade and if we keep our position size small we can limit our risk. 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 - exit @ 0.50 (-84.8%)

- 2nd Position -

May 31, 2011 - entry price on CACI @ 63.14, option @ 2.65*
symbol: CACI1117I65 2011 SEP $65 call - exit @ 0.50 (-81.1%)

07/27/11 Stopped out @ 59.75. Options @ -84.8% & -81.1%
06/25/11 new stop loss @ 59.75
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

Chart of CACI:

Current Target: $69.00
Current Stop loss: 59.75
Play Entered on: 04/04/11
Originally listed on the Watch List: 02/12/11


Canadian Natl. Railway Co. - CNI - close: 74.86

07/30 update: It was a terrible week for CNI. Shares failed at $80 on Monday and then proceeded to plunge past support near $76, past support near its 100-dma and past support near $75.00. The action this past week has broken the long-term trendline of support (see chart below). Our stop loss at $74.90 would have been hit on Friday but CNI actually gapped open lower at $74.60 instead.

- Current Positions -
Feb 28, 2011 - entry price on CNI @ 72.39, option @ 2.90
symbol: CNI1221A80 2012 JAN $80 call - exit $2.55 (-12.0%)

- 2nd Position, listed 7/9/11 -

Jul 11, 2011 - entry price on CNI @ 78.49, option @ 1.85
symbol: CNI1221A85 2012 JAN $85 call - exit $1.20 (-35.1%)

07/29/11 Stopped out/gap lower @ 74.60, Options @ -12% & -35.1%
07/11/11 CNI opened lower, 2012 Jan. $85 call opened @ $1.85
07/09/11 Add a 2nd position (2012 Jan $85 call)
07/02/11 new stop loss @ 74.90
06/25/11 new stop loss @ 72.75
05/21/11 new stop loss @ 71.75
05/05/11 new entry point @ 75.00
04/02/11 New stop loss @ 69.00

Chart of CNI:

Current Target: $89.00
Current Stop loss: 74.90
Play Entered on: 02/28/11
Originally listed in the New Plays 02/26/11


Dr. Pepper Snapple Group, Inc. - DPS - close: 37.76

07/30 update: It was an ugly, ugly week for DPS. Shares broke down under multiple layers of support including the long-term trendline on the weekly chart, the 100-dma, the simple and exponential 200-dma, the $40.00 mark and the $38.00 level. Our stop loss was hit on July 27th at $39.40 after DPS reported earnings. The company reported results that were only inline with expectations. I doubt it was the earnings news that drove DPS lower but it didn't help. Wednesday was the big drop in the market and DPS merely went along for the ride.

Earlier Comments:
DPS does not have LEAPS so we are using the November 2011 calls.

- Current Positions -
May 11, 2011 - entry price on DPS @ 40.55, option @ 2.85
symbol: DPS1119K40 2011 NOV $40 call - Exit $1.50 (-47.3%)

- or -

May 11, 2011 - entry price on DPS @ 40.55, option @ 1.00
symbol: DPS1119K45 2011 NOV $45 call - Exit $0.35 (-65%)

07/27/11 stopped out @ 39.40, options @ -47.3% & -65%
07/02/11 new stop loss @ 39.40
06/25/11 DPS looks poised to correct toward the $38 level.

Chart of DPS:

Current Target: $46.00
Current Stop loss: 39.40
Play Entered on: 05/11/11
Originally listed on the Watch List: 05/07/11


Targa Resources - NGLS - close: 34.43

07/30 update: The market's spike lower on Friday morning was just enough to push NGLS to $33.69. Our stop loss was hit at $33.75. The stock managed an intraday rebound but shares are suffering a short-term bearish trend of lower highs. I would keep NGLS on your watch list. Shares still offer opportunity. We may want to wait for a bounce from the 200-dma or a close back above $36.50 before initiating new positions. Keep in mind the spreads are probably too wide and readers may want to just buy the stock instead. FYI: NGLS is due to report earnings on Aug. 8th.

Earlier Comments:
I do consider this a slightly more aggressive trade. NGLS does not have normal LEAPS. We have to settle for the 2011 December calls. Plus, the spreads are a little bit too wide. We need to keep our position size small to limit our risk.

- Suggested Positions -
Jul 11, 2011 - entry price on NGLS @ 35.61, option @ 2.50
symbol: NGLS1117L35 2011 DEC $35 call - exit $1.35 (-46%)

07/29/11 stopped out @ 33.75, option @ $1.35 (-46%)
07/16/11 Spreads on the 2011 DEC calls are now outrageously wide! Do not use market orders

Chart of NGLS:

Current Target: $39.75, 44.00
Current Stop loss: 33.75
Play Entered on: 07/11/11
Originally listed in the New Plays 07/09/11


Pepsico, Inc. - PEP - close: $64.04

07/30 update: Ouch! The sell-off in PEP has been relatively brutal. The stock is definitely underperforming its peers. The stock opened lower on Monday and just continued to fade lower. Our stop loss at $64.75 was hit on Monday.

- Suggested Positions -
Jul 21, 2011 - entry price on PEP @ 67.31, option @ 1.17
symbol: PEP1221A70 2012 JAN $70 call - exit $0.69 (-41.0%)

- or -

Jul 21, 2011 - entry price on PEP @ 67.31, option @ 2.95
symbol: PEP1319A70 2012 JAN $70 call - exit $2.16 (-26.7%)

07/25/11 stopped out @ 64.75. options @ -41% & -26.7%

Chart of PEP:

Current Target: $75.00, 79.00
Current Stop loss: 64.75
Play Entered on: 07/21/11
Originally listed on the Watch List: 05/14/11