Editor's Note:

Investors may want to buckle their seat belts. Volatility is rising with the VIX index up +30% from its lows just two weeks ago. The market looks vulnerable to profit taking as we approach summer.

We did not have any closed trades this week. However, I am suggesting that we exit BBBY, DLTR, and our MRVL trades on Monday morning, June 3rd, at the opening bell.

Investors may want to take profits early on our Ford (F) trade.


Closed Plays



None. No closed plays this week.




Play Updates


Bank of America - BAC - close: 13.66

Comments:
06/01/13: Financials have continued to outperform the broader market. Investors are counting on a widening yield spread as interest rates increase to help banks become more profitable. Unfortunately for BAC the stock did hit new 52-week highs but it is struggling with a trend of higher highs and can't seem to breakout past the trend line.

I am still expecting a pullback. Once BAC sees a correction it could provide us another entry point.

More conservative investors with the 2014 calls may want to take profits now since the bid has hit 70 cents (+59%).

- Suggested Positions -
MAR 18, 2013 - entry price on BAC @ 12.29, option @ 0.44
symbol: BAC1418a15 2014 JAN $15 call - current bid/ask $0.70/0.71

- or -

MAR 18, 2013 - entry price on BAC @ 12.29, option @ 1.13
symbol: BAC1517a15 2015 JAN $15 call - current bid/ask $1.55/1.58

05/04/13 BAC did not participate in the market's rally this past week. Investors should turn more defensive here.

Current Target:$ 18.00
Current Stop loss: 10.90
Play Entered on: 03/18/13

Originally listed on the Watch List: 03/09/13


Bed Bath & Beyond - BBBY - close: 68.25

Comments:
06/01/13: Both consumer sentiment and consumer confidence are hitting multi-year highs. That should be bullish for retail-related stocks. Yet consumer spending actually went down in the latest report. There appears to be a disconnect between consumer attitudes and their wallet.

BBBY has been struggling with resistance near $70.00. I am longer-term bullish here but I strongly suspect BBBY will correct lower and could dip toward $65.00 or possibly toward the $62.50 zone. Therefore I am suggesting we go ahead and exit immediately on Monday morning, June 3rd, to lock in gains. We can re-visit BBBY after it's corrected lower as a potential entry point for a new trade.

- Suggested Positions -
MAR 21, 2013 - entry price on BBBY @ 63.06, option @ 5.20
symbol: BBBY1418a65 2014 JAN $65 call - current bid/ask $7.40/7.50

06/01/13 prepare to exit immediately on Monday, June 3rd
05/18/13 BBBY could be poised for a painful pullback here.
05/11/13 new stop loss @ 64.65
05/04/13 new stop loss @ 63.75
04/13/13 new stop loss @ 62.25
03/30/13 Nimble traders could exit now (for a small profit) and re-enter positions on a pullback.
03/21/13 trade opens with BBBY opening at $63.06
03/20/13 BBBY meets our entry requirement (close over $62.50) with a close at $63.34

Current Target:$ 74.50
Current Stop loss: 64.65
Play Entered on: 03/21/13
Originally listed on the Watch List: 03/16/13


Dollar Tree, Inc. - DLTR - close: 48.04

Comments:
06/01/13: My comments in the BBBY update about retail and consumers apply to DLTR as well. It proved to be a bearish week for DLTR. The stock failed at the $51.00 level on Tuesday (2nd time in three days) and then has declined every day since. Friday's session left DLTR breaking down below technical support at its 50-dma. Plus, the weekly performance has created a huge bearish engulfing candlestick reversal pattern on DLTR's weekly chart. It looks like a correction is imminent.

I am suggesting an immediate exit on Monday morning before our winning trade turns into a losing trade. Like BBBY, I am still longer-term bullish, but we can re-visit DLTR after its had corrected.

- Suggested Positions -
FEB 28, 2013 - entry price on DLTR @ 45.25, option @ 4.76
symbol:DLTR1418a45 2014 JAN $45 call - current bid/ask $ 5.90/5.60

06/01/13 prepare to exit immediately on Monday morning
05/18/13 Readers may want to take profits prior to the earnings report
04/13/13 new stop loss @ 44.75
03/30/13 new stop loss @ 43.45
More conservative investors might want to take profits as DLTR moves into the $49-50 zone.
03/16/13 new stop loss @ 41.40
02/28/13 trade opened following gap higher, above our trigger

Current Target: $53.50
Current Stop loss: 44.75
Play Entered on: 02/28/13
Originally listed on the Watch List: 02/23/13


Ford Motor Co. - F - close: 15.68

Comments:
06/01/13: Ford resumed its up trend last week with a breakout to new 18-month highs. Although it looks like the stock has found new resistance near $16.00, which has been a lid on the stock these last two sessions.

If the stock market corrects lower I do expect Ford will follow and that could mean a pullback toward the $14.00 area, which should be support. If you don't want to endure that move then I suggest you lock in profits now with the bid on our 2015 calls at $2.34 (+91.8%).

We are leaving the trade active but I am adjusting our long-term target to $17.75.

- Suggested Positions -
(closed the 2014 calls on May 20th, at the open)
APR 29, 2013 - entry price on F @ 13.73, option @ 0.60
symbol: F1418a15 2014 JAN $15 call - exit $1.18 (+96.6%)

- or -

APR 29, 2013 - entry price on F @ 13.73, option @ 1.22
symbol: F1517a15 2015 JAN $15 call - current bid/ask $ 2.34/2.39

06/01/13 investors may want to exit our 2015 calls now with a bid at $2.34 (+91.8%)
06/01/13 adjust long-term target to $17.75
05/20/13 closed the 2014 calls at the open. Option @ +96.6%
05/18/13 prepare to exit the 2014 calls on Monday, May 20th
05/18/13 new stop loss @ 13.40

Current Target:$ 17.75
Current Stop loss: 13.40
Play Entered on: 04/29/13
Originally listed on the Watch List: 04/20/13


Honeywell Intl. - HON - close: 78.46

Comments:
06/01/13: Just like the major indices shares of HON have posted a loss two weeks in a row. The stock's technical momentum indicators are crossed into bearish signals. HON looks poised to breakdown under the $78.00 level soon. I expect shares to correct lower toward what should be support near the $75.00 mark. No new positions at this time. We will re-evaluate after the pullback.

Earlier Comments:
Let's keep our position size small to start.

- Suggested Positions -
(closed the 2014 calls on May 20th at the open)
MAY 07, 2013 - entry price on HON @ 76.20, option @ 2.68
symbol: HON1418a80 2014 JAN $80 call - exit $5.10 (+90.2%)

- or -

MAY 07, 2013 - entry price on HON @ 76.20, option @ 4.10
symbol: HON1517a85 2015 JAN $85 call - current bid/ask $ 5.50/5.75

05/20/13 closed the 2014 calls at the open. option @ +90.2%
05/18/13 prepare to exit 2014 Jan. calls immediately on Monday, May 20th
05/18/13 new stop loss @ 74.50
05/07/13 Our trade opens
05/06/13 HON meets our entry requirement with a close above $76.00

Current Target:$ 95.00
Current Stop loss: 74.50
Play Entered on: 05/07/13
Originally listed on the Watch List: 05/04/13


Intel Corp. - INTC - close: 24.28

Comments:
06/01/13: The SOX semiconductor index managed to post a gain for the week and tag a new 52-week high on an intraday basis. INTC was helping with a slow and steady drift higher. INTC is trying to breakout past resistance near $24.50, which has been an obstacle for three weeks now.

If INTC does correct lower I would look for a pullback into the $23.00-22.00 zone.

Earlier Comments:
Our long-term target is $26.50 but we may have to exit our 2014 calls before then.

- Suggested Positions -
APR 24, 2013 - entry price on INTC @ 23.28, option @ 0.89
symbol:INTC1418a25 2014 JAN $25 call - current bid/ask $ 1.23/1.25

- or -

APR 24, 2013 - entry price on INTC @ 23.28, option @ 1.74
symbol:INTC1517a25 2015 JAN $25 call - current bid/ask $ 2.10/2.12

05/18/13 The rally has stalled. INTC might correct lower soon
05/11/13 new stop loss @ 21.90

Current Target: $26.50
Current Stop loss: 21.90
Play Entered on: 04/24/13
Originally listed on the Watch List: 04/20/13


The Coca-Cola Company - KO - close: 39.99

Comments:
06/01/13: Defensive names and traditional dividend trades like KO have been underperforming this past week. The stock got crushed with a three-day plunge back toward round-number support at $40.00. It was the worst week in months. I cautioned readers last week to expect a pullback.

KO should find support near at $40.00. If this level breaks then KO will hit our stop loss at $39.65.

- Suggested Positions -
(closed 2014 calls on April 1st, 2013 at the open)
FEB 12, 2013 - entry price on KO @ 38.05, option @ 1.01
symbol: KO1418a40 2014 JAN $40 call - exit $1.97 (+95.0%)

- or -

FEB 12, 2013 - entry price on KO @ 38.05, option @ 1.75
symbol: KO1517a40 2015 JAN $40 call - current bid/ask $3.55/3.65

05/25/13 adjust long-term target to $46.00
04/20/13 new stop loss @ 39.65, readers may want to take profits now.
04/01/13 exited 2014 calls at the open. Option @ $1.97 (+95.0%)
03/30/13 prepare to exit our 2014 Jan $40 calls on Monday, April 1st, 2013 at the opening bell to lock in gains. Current bid is $2.09.
03/30/13 new stop loss @ 38.25
03/23/13 new stop loss @ 37.65
Our 2014 calls have almost doubled and readers may want to take profits early right now

Current Target: $46.00
Current Stop loss: 39.65
Play Entered on: 02/12/13
Originally listed on the Watch List: 02/09/13


Lowe's Companies - LOW - close: 42.11

Comments:
06/01/13: LOW's annual meeting came and went and the stock didn't see any fireworks. Actually shares have been churning sideways for two weeks and look poised to correct lower. Last week's performance has created a bearish engulfing candlestick reversal pattern on the weekly chart. I am expecting LOW to decline toward $40.00, which should be support.

Currently our stop loss is at $39.00. More conservative investors could raise that closer to $40.00. More aggressive traders may want to move their stop below the simple 100-dma, which was support back in April.

- Suggested Positions -
MAY 07, 2013 - entry price on LOW @ 40.87, option @ 1.57
symbol: LOW1418a45 2014 JAN $45 call - current bid/ask $ 1.80/1.87

- or -

MAY 07, 2013 - entry price on LOW @ 40.87, option @ 3.52
symbol: LOW1517a45 2015 JAN $45 call - current bid/ask $ 4.05/4.25

05/22/13 LOW reported earnings and missed estimates.
05/18/13 new stop loss @ 39.00, LOW could see a pullback after its earnings report
05/07/13 Our trade opens.
05/06/13 LOW meets our entry requirement with a close above $40.25

Current Target: $49.50
Current Stop loss: 39.00
Play Entered on: 05/07/13
Originally listed on the Watch List: 05/04/13


Marvell Technology - MRVL - close: 10.85

Comments:
06/01/13: Ouch! MRVL underperformed the market and its peers with a -4.3% decline for the week. If you look at the weekly chart the stock has created what appears to be a three-candle bearish reversal pattern. It is possible that MRVL bounces off its 50-dma and 300-dma that are converging in the $10.65 area. However, I am suggesting we cut our losses immediately and exit positions on Monday morning.

- Suggested *Small* Positions -
MAY 13, 2013 - entry price on MRVL @ 11.25, option @ 0.78
symbol: MRVL1418a13 2014 JAN $13 call - current bid/ask $0.58/0.61

- or -

MAY 13, 2013 - entry price on MRVL @ 11.25, option @ 0.97
symbol: MRVL1517a15 2015 JAN $15 call - current bid/ask $0.80/0.85

06/01/13 MRVL is not cooperating. Prepare to exit immediately on Monday morning, June 3rd.

Current Target: $15.00
Current Stop loss: 10.25
Play Entered on: 05/13/13
Originally listed on the Watch List: 05/04/13


NetApp, Inc. - NTAP - close: 37.53

Comments:
06/01/13: Hmm... I am cautious on our NTAP trade. The middle of May was very volatile for the stock. Shares rallied on Tuesday, May 28th but then spent the rest of the week drifting sideways under the $38 level. I am not suggesting new positions. If NTAP breaks support at $36.00 it will likely fall quickly to the next support level at $35.00. Beyond that NTAP will hit our stop loss at $34.90.

Earlier Comments:
FYI: NTAP's point & figure chart is bullish with a $58 target.

- Suggested *Small* Positions -
MAY 17, 2013 - entry price on NTAP @ 38.93, option @ 3.35
symbol: NTAP1418a40 2014 JAN $40 call - current bid/ask $2.36/2.47

- or -

MAY 17, 2013 - entry price on NTAP @ 38.93, option @ 5.20
symbol: NTAP1517a40 2015 JAN $40 call - current bid/ask $4.00/4.30

05/18/13 adjust stop loss to $34.90
05/17/13 trade opens on NTAP's gap open higher at $38.93
05/16/13 NTAP met our entry requirement with a close above $37.15

Current Target: $44.75
Current Stop loss: 34.90
Play Entered on: 05/17/13
Originally listed on the Watch List: 05/11/13


U.S. Oil (ETF) - USO - close: 32.61

Comments:
06/01/13: The USO spent most of May churning sideways in the $32.50-34.50 zone. Yet it finally looks like this oil ETF is about to resume the longer-term trend lower. You could almost argue that the USO has created a bearish head-and-shoulders pattern that is now forecasting a drop toward $30.50.

I am not suggesting new positions. Currently our stop loss is a close above $34.50 (exit the next morning).

NOTE: Right now this is a put play with 2013 September puts.

Earlier Comments:
There is still a significant risk that Israel and Iran eventually start shooting at each other as Israel tries to stop Iran's nuclear weapons program. If that happens oil will definitely skyrocket higher. However, no one expects any Israel/Iran conflict until late summer. Oil could plunge to new relative lows before that happens.

This is a PUT play

- Suggested Positions -
APR 15, 2013 - entry price on USO @ 31.94, option @ 1.39
symbol: USO1321u30 2013 SEP $30 PUT - current bid/ask $ 0.79/ 0.81

05/18/13 adjust stop loss strategy to: if we see the USO close above $34.50, then exit immediately the next day!

Current Target:$ 29.50
Current Stop loss: see above
Play Entered on: 04/15/13
Originally listed on the Watch List: 04/06/13


Wal-Mart Stores - WMT - close: 74.84

Comments:
06/01/13: Bingo! I warned readers last week that WMT would likely correct lower into the $75-74 zone. The bounce failed at $78 near a few moving averages and WMT reversed into a three-day plunge. I am expecting WMT to find some support near $74.00. If the decline doesn't stop then WMT will hit our stop loss at $73.45.

- Suggested Positions -
(exited 2014 Jan. $75 calls on Monday, April 29th, 2013)
MAR 05, 2013 - entry price on WMT @ 73.47, option @ 3.10
symbol: WMT1418a75 2014 JAN $75 call - exit $6.05*(+95.1%)

- or -

MAR 05, 2013 - entry price on WMT @ 73.47, option @ 2.97
symbol: WMT1517a80 2015 JAN $80 call - current bid/ask $ 3.90/4.05

06/01/13 WMT has pulled back just as expected.
05/16/13 WMT reports earnings that miss estimates, miss revenues, and guides lower.
05/11/13 adjust exit target to $89.00.
04/29/13 planned exit for 2014 calls
*exit price is an estimate. The option did not trade when we closed this part of the play.
04/27/13 prepare to exit our 2014 calls immediately on Monday morning (04/29/13)
04/13/13 new stop loss @ 73.45
04/06/13 new stop loss @ 71.40
03/30/13 new stop loss @ 69.45

Current Target: $89.00
Current Stop loss: 73.45
Play Entered on: 03/05/13
Originally listed on the Watch List: 02/02/13