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Daily Newsletter, Saturday, 6/27/2015

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Nuclear Option Invoked

by Jim Brown

Click here to email Jim Brown

The Greek crisis was quickly winding down to what everyone thought would be a last minute resolution after the EU, ECB and IMF offered Greece a deal that unlocked 15 billion euros in aid. The deadline for acceptance was Sunday evening in order to get parliament approvals before Tuesday's aid expiration deadline. Instead Tsipras invoked the nuclear option to spoil those plans.

Market Statistics

Late Saturday EU Finance Ministers were due to meet in Brussels for a last minute attempt to get Alexis Tsipras to accept the offer and end current crisis. The current bailout deal that has seen Greece receive over 300 billion euros in bailout loans expires on Tuesday June 30th. Early Saturday Tsipras made a TV appearance and called for a surprise referendum on July 5th to accept or reject the latest offer. No, you did not misunderstand. The deadline for the deal was midnight on June 30th and Tsipras called the referendum for July 5th. At the same time he called on voters to reject the offer.

Tsipras said, "The Greek government has been asked to accept a proposal that places new unbearable burdens on the Greek people. Right now, we bear an historic responsibility concerning ... the future of our country. And this responsibility obliges us to answer the bailout creditors (EU, ECB, IMF) ultimatum based on the sovereign will of the Greek people." He said the Greek government had already rejected the proposals but because of the severity of the repercussions, he felt obligated to let the people decide for themselves. If the offer is rejected, the Greek banks could close, the Greek government could be forced to print its own money, which would be worthless and it could lead to an exit from the eurozone.

Just when everyone thought there would be a last minute deal to rescue Greece from those problems Tsipras effectively killed that option and is apparently committing country suicide. However, there is a catch. While there have been numerous daily demonstrations demanding he reject the deals there is a quiet segment of the public that does not want the country to be dragged down further and forced to leave the eurozone. Some analysts have said as many as 60% of Greek citizens want to continue using the euro and remain in the eurozone.

It is entirely possible that Tsipras knows this and he is holding the election to pacify the highly vocal minority but expecting the majority to take the matter out of his hands and accept the deal. That way he can say "I tried my best" but the voters spoke and I had to do the will of the voters.

The Saturday headlines mean we are going to have yet another week of uncertainty in the financial markets. Late Saturday the EU Finance Ministers shelved efforts to rescue Greece and turned their attention to controlling the collateral damage from the Tsipras move. Greeks of all classes lined up at ATMs to withdraw as much cash as possible ahead of the possible closure of Greek banks next week. By late Saturday the majority of the 7,000 ATMs in Greece were out of cash. The ECB is expected to pull the plug on the continued assistance to the Greek banks because they have little hope of ever seeing that 89 billion euros again. Monday could be a bank holiday as the government tries to find a way to stave off disaster. Some banks are already limiting the amount of money a customer can withdraw. Serious capital controls will probably be imposed next week. The IMF said the referendum was a waste of time because the proposal expires at midnight on Tuesday.


Some FX brokers have already changed the rules on currency transactions to "close only" in an attempt to prevent huge losses in the currency market. (Mayzus.com) Other brokers (FxPro) has raised the margin requirements to trade EUR currencies in order to provide a safeguard against a highly volatile market. "We also reserve the right to limit orders to closing positions."

To say the markets may be volatile on Monday would be an understatement. This could be a Lehman event for the eurozone.

The U.S. markets were already struggling after the Shanghai Composite declined another -6.4% on Friday and is now down -18% from its high just two weeks ago. Another -2% and it will be in bear market territory.


There were no major economic reports on Friday to move the market. The Consumer Sentiment revision for June was revised higher from 94.6 to 96.1. This is up from a drop from 95.9 to 90.7 in May and completely reverses that drop. January's 98.1 was an 11-year high and we are rapidly moving in that direction again.

The present conditions component surged from 100.8 to 108.9 and the expectations component posted a lesser gain from 84.2 to 87.8. More than 44% of respondents said they were better off now than the same period in 2014. That is up from 41% in May. Sixty-three percent said business conditions were better today than a year ago, up from 56% in May.


The calendar for next week is headlined by the payroll reports and the national ISM Manufacturing Index. The ADP Employment is expected to show just over 200,000 job gains in the private sector. The Nonfarm Payrolls on Friday are expecting a gain of 225,000 jobs. That is well below the 280,000 in May. The odds are very good that May number will be revised lower.

The ISM Manufacturing on Wednesday is expected to show only minimal improvement from the 52.8 headline from May. Recently we have seen some positive gains in the regional manufacturing reports so there is the potential for an upside surprise in the ISM. However, the manufacturing sector is still the weakest part of the economy other than energy and much of the manufacturing weakness is due to the slowdown in the energy sector.


Kroger (KR) joined the stock split calendar last week with the announcement of a 2:1 split. The date of the split is July 13th. The announcement was not expected since the stock was only trading at $72 at the time. Full Split Calendar


There were two big names in the news on Friday. One of those was Nike (NKE). After the close on Thursday Nike reported earnings of 98 cents that easily beat the consensus estimates for 84 cents. Revenue of $7.78 billion also beat estimates for $7.68 billion. Future orders for delivery through November rose +2% to $13.5 billion. Without the impact of the strong dollar those orders would have risen +13%.

On a constant currency basis, sales in North America rose +14%, China +22%, Japan +20%, Western Europe +14% and +17% in Central and Eastern Europe. Those are outstanding numbers. Nike was able to sell even its highest priced shoes. Sales in the current quarter are expected to grow in the low to mid single-digit range compared to estimates for 7.4% gains. The headwind preventing that is the strong dollar. Shares spiked $4.50 on the news and provided nearly 35 points of the Dow's gains.


Foot Locker (FL) and Finish Line (FINL) both spiked higher on the Nike news since they are both big sellers of Nike shoes and apparel. Under Armour (UA) was the laggard since they compete with Nike. However, strong sales of athletic apparel by one company suggests the other will also do well. Under Armour reports earnings on July 23rd.


The other big name was Micron (MU). Shares fell -18% after the company warned of slowing PC demand. The company posted earnings and guidance and they were not good. The company said earnings and revenue fell in the quarter as demand for PCs continued to decline. Earnings of 54 cents missed estimates for 57 cents. Revenue of $3.85 billion missed estimates for $3.9 billion.

They guided for the current quarter to revenue of $3.45 to $3.7 billion and that was well below analyst estimates for $4.16 billion. Micron did say demand could improve later in the year when Windows 10 PCs begin shipping for the holidays.

Micron found no love in the analyst community with 13 firms cutting the price target for Micron shares. The general consensus was to avoid Micron shares until later in the year and not try to catch this falling knife.

Volume of 149 million shares was six times normal.


The Micron warning on PC demand crushed the semiconductor sector with the Semiconductor Index ($SOX) falling -2.45%. Even companies like Ambarella (AMBA) that do not make PC chips were knocked for a loss. Intel lost -3%, PMCS -3.8%, XLNX -2%, etc. The SOX was knocked back to the 150-day average, which has been support on all the major dips since October. You can play the Semiconductor Index with the SMH ETF.


Zoetis (ZTS) probably have the most volatility over the last two days of any stock. On Thursday shares spiked from $49 to $55 on headlines that Valeant Pharmaceuticals (VRX) had made a preliminary approach to buy the animal health company. Zoetis was spun off from Pfizer in 2013 and is one of the largest sellers of vaccines and medicines for livestock and household pets. It had a market cap of roughly $25 billion on Thursday.

Bill Ackman took an 8% stake in the company in November and received a seat on the board. Immediately things began to change. They trimmed workers and closed facilities and improved profitability and cash flow. Ackman also teamed with Sachem Head Capital Management, also a large owner of ZTS shares. Ackman has teamed up with Valeant before in an acquisition attempt of Allergan (AGN). About four weeks ago somebody bought $1.1 million in the October $55 calls and rumors began to swirl that a deal was coming.

However, on Friday shares imploded when analysts began to question the metrics and mechanics of any potential deal. Analysts began to question whether Valeant had even made an offer or just expressed interest to see if they were for sale. The Wall Street Journal, which broke the story, said it was unclear whether Zoetis was even receptive to an offer from the serial acquirer. One positive event was the Wednesday expiration of the tax liabilities of the spinoff from Pfizer two years ago. Any acquisition today would not incur any significant tax liability. Other analysts said at the $55 price of ZTS after the spike on Thursday that was a PE of 29 and the potential for a deal over $55 was slim.

However, given the fact that Ackman is in play and somebody bought $1.1 million of the October $55 calls, possibly him, the odds of a deal price over $55 by October would appear to be a pretty good bet. I doubt Ackman or any other major hedge fund would have bought $55 calls in that quantity if they did not think the final price would not be over $55.

With all the confusion on Friday shares of ZTS collapsed -12% to $48.65. That was a $6 move in alternating directions on back-to-back days.


Netflix (NFLX) was awarded another target price increase from MKM Partners on Friday. Their new target price is now $885 because of the potential for significant upside from growth outside the USA. MKM expects international subscribers to exceed 100 million by 2021. Pay TV subscribers are expected to exceed 1 billion by 2020 but the cost of Pay TV is much higher than Netflix making the streaming company a highly desirable alternative. Shares declined on the post split announcement depression.

BTIG Analyst Richard Greenfield raised his price target to $950 earlier in the week on the same international fundamentals.


With the year half over all the analysts are brushing off their end of year forecasts and deciding if they need updating. Currently with the S&P at 2,101 the average of the top 26 analysts is for a rise to 2,229 by the end of December. That would be a +6% gain from here.

Barclays and Goldman Sachs remain the most bearish with 2,100 price targets. Stifel Nicolaus is the most bullish with 2,375 as a target. The forecasts for S&P earnings have not come down that much but after the Q2 earnings cycle that could happen in a hurry. Q2 earnings are expected to decline -4.3%. The energy sector continues to burn cash and reduce activity so that will be a major drag on the overall earnings totals.

At Friday's close the Dow was up only 0.7% for the year or just barely over breakeven. The S&P was up +2% and the Nasdaq +7%. The Russell 2000 gained +6.2%. The big leader was the biotech sector at +22.5% and the biggest loser was the Transports at -9.8%.


The Russell rebalance happened at the close on Friday and volume of 8.66 billion was nearly 3 billion shares higher than Thursday's 5.8 billion. Volume more than doubled in the final 15 minutes of trading as the portfolio restructuring was completed.

Stocks with active buyback programs saw their weightings in the Russell indexes reduced. Those included companies like Exxon and Apple. Stocks that have been issuing shares saw their weightings increased. Examples would be Hyatt and Facebook.

Overall there were 29 stocks that moved from the Russell 2000 to the Russell 1000 because they grew larger during the last 12 months. There were 50 stocks that moved from the Russell 1000 down to the Russell 2000 because they shrank during the year. There were 120 new stocks added to the Russell 2000 and the equivalent number removed.

Everything went as planned for the traders responsible for the restructuring. The Russell 2000 fluctuated in only a 5 point range from 1:PM until the close and the closer to 4:PM the more stable that range became. It is amazing that the markets can reweight 3,000 stocks in the Russell indexes with volume of nearly 3 billion shares and $50 billion in valuation in the last 30 minutes of trading and not have any material move in the indexes.

The Russell indexes declined for the last three days, which is normal for the rebalance week. The stocks being removed or reduced are still in the index so that produces a negative bias. The stocks to be added are not in the index so their individual moves have no impact on the indexes. That is reversed next week. For those slow pokes that did not get their restructuring done last week the purchases of the stocks being added will impact the indexes next week. This gives the Russell indexes a positive bias for next week.

However, if Greece is going down in flames it will take a lot more than a positive bias on the Russell indexes to rescue the market.

Hindsight is 20:20. If you had bought the Russell 3000 index (IWV) in October 2013 you would have had better than a 50% gain. When you look at the long-term charts the moves are really apparent. Unfortunately, we normally get caught up in the daily moves and lose site of the overall picture.


The volatility in crude oil has completely disappeared. The chart pattern suggests a breakout is coming but that would ignore the seasonal weakness that develops after the July 4th holiday. However, there is a bigger event at play here. The negotiations with Iran are not going well. The artificial deadline of June 30th is here and both sides are locked into positions that are not likely to change. President Obama has said more than once that the deadline is firm and will not be changed again. After all they have been working on this for the last five years. However, deadlines and red lines have been changed in the past so expect some can kicking here.

The problem for the oil sector is the Iranian oil that could hit the market if a deal is reached. Iran could almost immediately increase oil production by about one million barrels per day and drop it into an already flooded market. In addition they have between 30-40 million barrels stored on tankers and ready to be sold the instant the sanctions are lifted. An Iranian deal that removes sanctions is going to be very negative to crude prices.

However, both sides seem to have reached an impasse. Iran said they will not sign a deal that does not remove all sanctions upon signing. The P5+1 nations claim that is not going to happen. Sanctions will only be removed after Iran has complied with its requirements to reduce nuclear enrichment capacity and the amount of enriched uranium they have on hand. Last week Iran's supreme leader, Ayatollah Ali Khamenei vowed Iran would not freeze nuclear enrichment.

The P5+1 nations claim they will not sign any deal that does not include unannounced spot checks on any nuclear facility as well as any military site where inspectors believe nuclear testing has been conducted. Khamenei said under no circumstances would inspectors be allowed spot checks without advance notice and no inspectors would ever be allowed on any military site. Iran's parliament passed a bill last week banning nuclear inspections at any military site.

Rational people would look at the facts and assume a deal is not going to be completed. However, in politics nothing is ever rational and there are always handshake deals that circumvent whatever is actually committed to paper and signed. The president has said there will be by necessity secret components to any Iranian deal and those components will not be disclosed to the press, public or Congress. That suggests the 7 nations can sign/say whatever they want in public because the secret side deals could negate the public documents.

Crude prices are flat lining at $60 while we await the resolution of the Iranian negotiations. With no deal and a breakdown in talks prices could rise sharply. With a deal that removes sanctions prices could decline sharply.


Active rigs rose last week for the first time in 28 weeks. The total number of rigs rose by +2 to 859 but oil rigs continued to decline with -3 to 628. Gas rigs rose +5 to 228 and the highest level in several months. We may be nearing the bottom with active rigs at a ten-year low. The results of the Iranian negotiations and their impact on oil prices could have a dramatic impact on active rigs.

U.S. production of 9.604 million barrels per day was only slightly below the 40 year high of 9.610 mbpd from two weeks ago. Oil production is not declining as many expected and that is confusing to analysts.


Markets

The historical trend asserted itself and now we have had 23 out of 26 post expiration weeks in June with a loss. Fortunately, it was not as bad as the historical norm of -1.1% on the Dow. The actual decline of -0.38% is just a hiccup rather than a decline. The near term support is still in place although the internals worsened slightly.

The percentage of S&P stocks under their 200-day average declined to 59.6%. The percentage under the shorter 50-day average declined to 45.4% but that was still an improvement over the prior week. The most bearish chart remains the Bullish Percent Index, which declined to 61.6% after only barely rebounding earlier in the week. This is the equivalent of a slightly longer-term look at stocks because it takes a definite move of several dollars to move a stock in or out of the bullish signal position.

Approximately 45% of S&P stocks are already in a bear market with declines of -20% or more.




The S&P itself made a lower high that could be seen as the right shoulder in a head and shoulders formation. However, the decline on Friday stopped right on the 100-day average and the stronger 150-day was still 20 points lower. The 150-day and the horizontal support at 2078 should contain everything except a significant change in market sentiment. Traders are still in buy the dip mode but the lack of volume signifies lack of conviction.

Too many investors are still holding out in hopes or in fear of a 10% correction or worse. Some are afraid we are approaching a correction and some are hoping we will get one for a buying opportunity. Both camps are not buying stocks for obvious reasons.


The Dow picture did not change. The resistance at 18,165 is still rock solid with support at 17,750. That gives the Dow a big range of more than 400 points to swing without causing any material damage. A quick spin through the charts of all 30 stocks told me nothing had changed. The charts are starting to look a little choppier but about 20 of the 30 stocks still have a longer term downtrend in place.

The Nike gains added about 35 points to the Dow on Friday with McDonalds adding about 12 and 3M adding about 8. That is 55 points and the Dow gained 56 so the other 27 stocks were no help.

Note that Apple, Intel and IBM were the bottom three with Cisco and Microsoft at 5 and 6. The tech sector was hit hard by the Micron warning on slowing PC sales.


The Dow chart is an easy one to trade with the clear resistance at 18,165 and support at 17,750. Buy the dips and sell resistance until one direction wins.


The Nasdaq crashed back under support at 5100 on three days of declines. However, despite the change in direction, the Nasdaq Composite only lost 36 points for the week. Considering it was at a new high on Tuesday, we really cannot complain. There is much stronger support at 5000 and that is still 80 points away. The uptrend remains intact.



The big cap Nasdaq 100 failed right at resistance at 4345 and returned to support at 4485. There was no major change since the big caps have been struggling to move higher for some time. A decline under 4485 should target 4400 and the support from the prior week. With big cap earnings expected to be weak it could be a struggle for the index to move to a new high or even hold its gains.


The Russell 2000 remains the winner. Even with a three-day decline, the index still managed to hold the majority of its gains and remain over 1275. The negative bias caused by the rebalance may have knocked a few points off in the last several days but that should shift to a positive bias next week. I would expect to see new highs if it were not for Greece. With Tsipras committing country suicide with his referendum, we could see some serious negativity next week that could weigh on the markets.


The Dow Transports fell back into correction territory with a decline to a new 7-month low. The railroads are a serious drag and the minor airline bounce did not hold. We could be looking at a retest of the October lows and that would be a major drag on the broader market.


Yields on the ten-year Treasury closed at 2.476% and the highest level since September. Bonds were being sold across the board last week on comments from Fed heads and improving economics. The comments regarding the possibility of two rate hikes in 2015 compared to no hikes expected just a few weeks earlier dramatically changed the outlook for rates. With bonds falling and yields rising we could be seeing the start of the great rotation. If Greece self-destructs next week that should lift bonds once again but that spike will probably be sold.


I am in buy the dip mode this week. If it were not for Greece I would be expecting an early week rebound. Because of the Greek referendum we could see some serious market volatility on Monday. I am hoping U.S. investors have grown so tired of this weekly saga that they ignore the negative headlines but we won't know for sure until Monday.

The FBI and Homeland Security are both issuing warnings for this week because of a significant uptick in ISIS chatter on the internet. ISIS is pushing for all out attacks against infidels everywhere. Because it is also the Ramadan holiday they are promising their legion of wannabe terrorists an extra reward in the afterlife if they die in an attack this week. ISIS leaders have called for a time of "calamity for the infidels." If you are going out this week into areas where there are large crowds I would be especially observant of the people around you. Fireworks shows could be an opportunity because they take place outside in the dark and suspicious people would be harder to spot.

We have been lucky in America and have not had any serious attacks since 9/11. That will not last forever. Have fun but be careful.

 

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Random Thoughts

It must be nice to be a billionaire. Alibaba's Jack Ma bought 28,100 acres in the Adirondacks in New York for $23 million. This includes 9 miles of the St Regis River as well as trout streams, ponds and two homes. The property is heavily wooded and Ma says he plans to make it a conservation project and part time personal retreat. Personal Retreat


It was only a year ago on June 29th that ISIS proclaimed itself and announced a caliphate consisting of portions of Syria and Iraq. To celebrate the anniversary of their coming out party they called for violence on a global scale. The ISIS Ramadan message specifically preaches that jihad is 10 times more obligatory during Ramadan and those who die in jihad will be rewarded by Allah ten times as much as during the rest of the year. There will be ISIS supporters who have waited until now to strike in order to get the maximum reward. Those who were tentatively considering an attack will now feel more pressure to actually do it according to national security analyst Ryan Mauro. ISIS has come a long way in only a year. They started out with only 7-10,000 fighters and are now up to 50-60,000 thanks to their highly publicized victories and no concentrated effort to defeat them. According to Google Ramadan is June 17th to July 17th this year.


The U.S. power grid may be the battlefield for the next war. By destroying or disabling only 9 critical substations in the U.S. power grid the entire system would come crashing down and power could be out for up to 18 months. With this kind of information easily obtainable on the internet, it would be absurd to think that terrorists had not at least thought about attacking the electrical grid. The Federal Energy Regulatory Committee (FERC) released a report claiming the power grid could be knocked out for "weeks if not months" by taking out only 9 substations. How hard is that to do? A lone gunman knocked out one substation last year by shooting 17 large transformers with an AK47 type rifle and was gone long before police arrived. Grid Down Easily


The Chinese markets are crashing. Should you buy this dip? Morgan Stanley Says No


The IMF is suddenly a lot more interested in the Federal Reserve and their plans for rate hikes. A couple weeks ago Christine Lagarde told Janet Yellen not to raise rates until mid 2016 because the strong dollar would be a significant drag on the global economy. Now the IMF staff has asked the Fed to "ditch the dots" referring to the dot plot that shows each person's forecast on what interest rates should be for the next two years.

The "dot plot" is confusing and IMF researchers wrote "It is not straightforward to connect the dots to get a coherent vision of the path ahead," the dots "do not provide a clear picture of the Federal Open Market Committee's majority view." A more transparent forecast, prepared by staff and perhaps presented at least as the majority view of the Fed's policy committee, would make the central bank more effective and is "the main next step for modifying the existing framework at the Fed," the IMF researchers wrote. The IMF is not alone. There are plenty of critics of the dot plot. Ditch the Dots

Each dot represents the forecast of one Fed official for anticipated rates for that period. Four dots on the same line represents 4 officials individually projecting the same interest rate for that period.



There was a huge surge in bullish sentiment last week rising 10.1% to 35.6%. Bearish sentiment declined -12.6% to 21.7%. Neutral rose +2.5% to 42.8%. If you were a contrarian investor, the jump in bullish sentiment and decline in bearish sentiment would be a red flag for the market. Bearish sentiment is now well under the long term average of 30.3% and bullish sentiment is surging. It will be interesting to see how the market plays out in relation to this change in sentiment.



The S&P has now gone 174 days without a 5% dip. That is the longest streak since a 219-day streak that ended on February 11th 2004. While that seems like a long streak, there have been 15 longer since 1957. The longest was 409 days that ended on 8/3/1959.

Deutsche Bank said as of May 23rd there had been 916 trading days since the last 10% correction. Fast forwarding to June 26th that number rises to 941 and the third longest streak since the 1950s. It has been more than 3.5 calendar years since the last correction. This is why everyone is so gun shy about going long the market with earnings declining.



The hard deadline of June 30th for a deal with Iran may "slip a few days but we will be close" according to a senior US official. Based on the increasing hard line stance of Iranian politicians the deadline may slip a lot because they are making it harder to agree as each day passes. If there is a deal within a "few days" of June 30th the odds are very good that it will not be a "good" deal.

France is turning into a hard liner on the side of the P6 nations and said this weekend there will be no deal unless three things are accepted by Iran without any qualifications. Those are suspending a majority of uranium enrichment, agreeing to immediate spot inspections of any facility in Iran including military bases as well as questioning of Iranian scientists and no sanctions relief until all of Iran's responsibilities can be verified by inspectors. Iran has said that under no circumstances will those points be accepted.

On Wednesday, five former members of President Obama's inner circle of advisers on Iran wrote an open letter expressing concerns that a pending deal "may fall short of meeting the administration's own standard of a 'good' agreement." Insiders Warning on Bad Deal

The U.S. has prepared a 30,000 pound bomb that could be used against Iran's underground nuclear facilities if the negotiations fail. The Massive Ordnance Penetrator (MOP) can penetrate 60 feet of concrete and 200 feet of earth before exploding. For massively hardened sites like Fordow they are designed to be dropped back to back with the second bomb hitting in the crater of the first bomb for another 200 feet of penetration before setting off an underground earthquake. Massive Ordnance Penetrator


 

Enter passively and exit aggressively!

Jim Brown

Send Jim an email

"Your trading emotions are often a reverse indicator of what you ought to be doing."

John F. Hindelong

 


New Plays

Potential Short Squeeze Candidate

by James Brown

Click here to email James Brown


NEW BULLISH Plays

Wayfair Inc. - W - close: 38.18 change: +0.94

Stop Loss: 35.90
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on June -- at $---.--
Listed on June 27, 2015
Time Frame: exit PRIOR to earnings in August
Average Daily Volume = 884 thousand
New Positions: Yes, see below

Company Description

Trade Description:
Tonight's new candidate has been outperforming the market and could see a short squeeze. Year to date W is up +92% and shows no signs of slowing down.

According to the company, "Wayfair Inc. offers an extensive selection of home furnishings and decor across all styles and price points. The Wayfair family of brands includes:
Wayfair.com, an online destination for all things home
Joss & Main, an online flash sales site offering inspiring home design daily
AllModern, a go-to online source for modern design
DwellStudio, a design house for fashion-forward modern furnishings
Birch Lane, a collection of classic furnishings and timeless home decor
Wayfair is headquartered in Boston, Massachusetts, with additional locations in New York, Ogden, Utah, Hebron, Kentucky, Galway, Ireland, London, Berlin and Sydney."

Shares of W came to market with an IPO in October last year and priced at $29.00. They opened at $36.00 and spiked up to $39.43 on the first day of trading.

The company seems to be growing at a tremendous pace. Their first earnings report as a public company was November 10th, 2014. Revenues soared +41.7% to $336.2 million. Their direct retail business surged +57%. W said their gross profit was $79.0 million versus $58.6 million a year ago.

Additional 2014 Q3 highlights included the number of active customers for their direct retail business rose +61% to $2.9 million year over year. Their LTM Net revenue per active customer increase $342 or +8.6% year over year and +3.0% from the second quarter of 2014.

W reported their Q4 results on March 4, 2015. The company delivered a loss of ($0.18) per share, which was 10 cents better than expected. Revenues were up +38.4% to $408.6 million, above expectations. Management raised their Q1 guidance significantly above Wall Street estimates.

The company beat expectations again with their Q1 report on May 11th. Results were a loss of ($0.23) per share. Revenues accelerated with a +52% gain to $424.4 million.

Naturally, with this much growth, the management is very optimistic. Niraj Shah, co-founder, CEO and co-chairman of Wayfair, commented on his company's results, saying,

"We are off to a strong start this year and are particularly pleased with the revenue strength and accelerated growth in our Direct Retail business. We believe the growth rate this quarter underscores the size of the market opportunity, the rapidly changing, and favorable dynamics of how customers purchase home goods and Wayfair's unique position in this large and rapidly growing market segment. Additionally, the increase in our advertising spend last year helped attract new, and higher value customers, driving both revenue growth and advertising spend leverage this quarter. We remain excited about the opportunity ahead as we continue to gain market share and grow."
On the company's conference call the CEO noted that their potential markets are huge. Estimates suggest that spending in their industry will hit $264 billion in the U.S. and $308 billion in Europe by 2018 (a combined total of $572 billion market).

Bears will argue that W's valuations are outrageous. They're probably right. The recent rally in the stock has bumped the company's market cap to $3.24 billion. At the same time analysts are expecting W to operate at a loss for the next two fiscal years. On a short-term basis the market doesn't seem to care. If this rally continues W could see a short squeeze.

A few months ago in an interview one of the co-founders said that together the two co-founders own between 40% and 50% of the stock. The current float is only 28.8 million shares, which is relatively small. The most recent data listed short interest at 47% of the float.

I noted earlier that on the first day of trading W peaked at $39.43. A few days ago the rally peaked at $39.43 (June 22nd). Afterwards traders jumped in to buy the dip when W tagged its 10-dma. Once W crosses above $39.43 the short squeeze could blast off. That's why tonight we are suggesting a trigger to launch bullish positions at $38.35.

Traders should consider this an aggressive, higher-risk trade. W has been a volatile stock in the past. There's no reason to expect that to change in the near future. Consider small positions to limit risk. We are listing a call option with this trade but I want to caution you that the option spreads are pretty wide.

Trigger @ $38.35 *small positions to limit risk*

- Suggested Positions -

Buy W stock @ $38.35

- (or for more adventurous traders, try this option) -

Buy the AUG $40 CALL (W150821C40) current ask $3.30
option price is a current quote and not a suggested entry price.

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike

Daily Chart:



In Play Updates and Reviews

Review Your Stop Losses

by James Brown

Click here to email James Brown

Editor's Note:
The week ahead could be volatile. Greece looks poised to default on its IMF payment due June 30th. The market reaction could generate some rough waters for stocks.

SGEN hit our stop loss on Friday.

We want to exit our TASR trade on Monday morning.

Several stop losses have been updated tonight.


Current Portfolio:


BULLISH Play Updates

Natus Medical Inc. - BABY - close: 43.49 change: -0.27

Stop Loss: 41.85
Target(s): To Be Determined
Current Gain/Loss: +0.9%
Entry on June 18 at $43.10
Listed on June 16, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 249 thousand
New Positions: see below

Comments:
06/27/15: After hitting new record highs on Thursday BABY saw some profit taking on Friday. Shares slipped -0.6% but still closed up for the week. The stock is up five out of the last six weeks.

Tonight we are raising the stop loss to $41.85. No new positions at the moment.

Trade Description: June 16, 2015:
Healthcare stocks are getting a lot of press because of the merger speculation among the big healthcare insurers. One area of healthcare that's doing well without the press is medical equipment makers. The S&P 500 index is up +1.8% year to date. The XHE healthcare equipment ETF is up +8.9%. BABY is in this industry and their stock is up +18% in 2015.

Here is a brief company description, "Founded in 1989, Natus Medical Incorporated is a leading manufacturer of medical devices and software and a service provider for the Newborn Care, Neurology, Sleep, Hearing and Balance markets. Natus products are used in hospitals, clinics and laboratories worldwide. Our mission is to improve outcomes and patient care in target markets through innovative screening, diagnostic and treatment solutions."

BABY has been steadily growing earnings. They have beaten Wall Street's bottom line earning estimate the last four quarters in a row. They raised guidance the last three quarters in a row. Their most recent earnings report was April 22nd.

BABY reported that their Q1 earnings were up +19% from a year ago to $0.31 per share. Revenues were up +3.7% to $94.0 million. Management raised their 2015 guidance above analysts' estimates.

Jim Hawkins, President and Chief Executive Officer of BABY, commented on his company's results, "I am very pleased with our first quarter results as we achieved record revenues and earnings. Revenue came in at the high end of our guidance while earnings exceeded our guidance. I am most satisfied that we were able to achieve these results in the face of approximately $2 million of negative currency effects on revenue during the quarter."

Earlier this month (June 5th) BABY announced they were increasing their stock buyback program. A year ago they launched a $10 million share repurchase program. They just added another $20 million to their program.

Technically BABY has been showing relative strength the last three weeks. The point & figure chart is very bullish and forecasting a long-term target of $73.00. At the moment BABY is hovering just below resistance in the $42.75-43.00 area. Tonight I am suggesting a trigger to launch bullish positions at $43.10. FYI: I am urging caution on the options. The spreads are pretty wide for all of BABY's October calls.

- Suggested Positions -

Long BABY stock @ $43.10

- (or for more adventurous traders, try this option) -

Long OCT $45 CALL (BABY151016C45) entry $2.85

06/27/15 new stop @ 41.85
06/18/15 triggered @ $43.10
Option Format: symbol-year-month-day-call-strike

chart:


Chimerix, Inc. - CMRX - close: 46.27 change: +0.41

Stop Loss: 42.95
Target(s): To Be Determined
Current Gain/Loss: +0.3%
Entry on June 26 at $46.15
Listed on June 25, 2015
Time Frame: exit PRIOR to earnings in August
Average Daily Volume = 428 thousand
New Positions: see below

Comments:
06/27/15: Our new trade on CMRX is open. Shares managed to outperform its peers in the biotech space on Friday. CMRX rallied more than +3% and hit a new high before paring its gains back to +0.89% on the session. Our trigger to open bullish positions was hit at $46.15.

Trade Description: June 25, 2015:
Biotech stocks have been outperforming the broader market for the last couple of years. That outperformance continues in 2015. The IBB biotech ETF is up +23% in 2015 versus a +8% gain in the NASDAQ and a +2% gain in the S&P 500. CMRX has been lagging its peers with a +13.9% gain this year but that could be about to change as the stock looks poised to run.

According to the company, "Chimerix is a biopharmaceutical company dedicated to discovering, developing and commercializing novel, oral antivirals in areas of high unmet medical need. Chimerix's proprietary technology has produced brincidofovir (CMX001), a clinical-stage nucleotide analog lipid-conjugate, which has potent in vitro antiviral activity against many clinically relevant dsDNA viruses and a favorable safety profile in clinical studies conducted to date. Chimerix has completed enrollment of SUPPRESS, a Phase 3 study of brincidofovir for the prevention of cytomegalovirus (CMV) in adult hematopoietic cell transplant (HCT) recipients. In addition, Chimerix is enrolling the Phase 3 AdVise trial of brincidofovir for treatment of adenovirus (AdV) infection. Chimerix is working with BARDA to develop brincidofovir as a potential medical countermeasure to treat smallpox due to a threat of bioterror or accidental release."

In April this year CMRX was award an exclusive contract from the U.S. government to build a new smallpox vaccine. The Biomedical Advanced Research and Development Authority (BARDA) wants another treatment available just in case enemies of the U.S. try to use smallpox as a weapon or if there is some sort of accidental breakout from a lab. The 60-month contract is valued at $100 million but if all the options are awarded it could be worth up to $435 million in revenue to CMRX. The company's revenues for the trailing twelve months are only $4.5 million.

Earlier this month (June) CMRX announced they were going to raise $150 million in capital by selling 3,775,000 shares of stock. That was later bumped up to 4.3 million shares. These priced at $39.75. You can see how CMRX stock briefly dipped toward $39.00 on June 10th and investors immediately bought the dip. It's impressive to see CMRX increase its shares outstanding by 10% and the impact only lasted a few days as buyers gobble up the stock.

Technically CMRX appears to be in breakout mode. The stock consolidated sideways in the $35.00-43.50 range for five and a half months before finally breaking out a few days ago. The stock encountered some profit taking yesterday but traders bought the dip today. The point & figure chart is bullish and forecasting at $61.00 target.

Tonight we are suggesting a trigger to launch bullish positions at $46.15. Plan on exiting prior to CMRX's earnings report in August.

- Suggested Positions -

Long CMRX stock @ $46.15

- (or for more adventurous traders, try this option) -

Long AUG $50 CALL (CMRX150821C50) entry $2.10

06/26/15 triggered @ $46.15
Option Format: symbol-year-month-day-call-strike

chart:


Hanesbrands Inc. - HBI - close: 34.35 change: +0.10

Stop Loss: 33.85
Target(s): To Be Determined
Current Gain/Loss: +6.2%
Entry on May 21 at $32.35
Listed on May 20, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 2.74 million
New Positions: see below

Comments:
06/27/15: HBI tried to rally on Friday morning but shares failed at resistance in the $34.75-34.80 zone. Shares faded to a +0.29% gain on the day.

I am still suggesting that more conservative traders consider taking some money off the table. We are raising our stop loss to $33.85.

No new positions at this time.

Trade Description: May 20, 2015:
HBI was founded back in 1901. Today you will find Hanes products in more than 80 percent of U.S. homes.

HBI is in the consumer goods sector. According to the company, "HanesBrands, an S&P 500 company, is a socially responsible leading marketer of everyday basic apparel in the Americas, Europe and Asia under some of the world's strongest apparel brands, including Hanes, Champion, Playtex, DIM, Bali, Maidenform, Flexees, JMS/Just My Size, Wonderbra, Nur Die/Nur Der, Lovable and Gear for Sports.

We sell bras, panties, shapewear, sheer hosiery, men's underwear, children's underwear, socks, T-shirts and other activewear in the United States, Canada, Mexico and other leading markets in the Americas, Asia and Europe. In the United States, we sell more units of intimate apparel, male underwear, socks, shapewear, hosiery and T-shirts than any other company."

What makes HBI different than most of its competitors is that HBI owns and operates its own manufacturing facilities. About 90% of their apparel comes from company-run plants. That helps them control costs throughout the production process.

This year the company has been very shareholder friendly. Back in January they raised their dividend 33% and announced a 4-for-1 split. The stock split took place in March this year.

HBI's most recent earnings report was April 23rd. HBI reported their Q1 earnings were up +16% from a year ago to $0.22 a share. That missed estimates of $0.23. Revenues were up +14% to $1.21 billion. This was just below expectations of $1.22 billion.

In the company press release HBI Chairman and CEO Richard Noll commented on their results, saying, "We are off to a great start in 2015, once again delivering a double-digit increase in EPS, while tracking to our full-year growth plans. Our acquisition strategy continues to create value with DBApparel, Maidenform and Gear for Sports all contributing substantially to our double-digit growth. In addition, we are raising our 2015 performance outlook to reflect the recent acquisition of Knights Apparel."

Management raised their earnings guidance for 2015 from $1.58-1.63 to $1.61-1.66 per share. Wall Street estimates were at $1.64. HBI also raised their 2015 revenue guidance from $5.78-5.83 billion to $5.90-5.95 billion. Consensus estimates were already at $5.95 billion.

The stock was hammered on the earning miss as investors ignored the improved earnings and revenue guidance. The stock corrected from about $34.60 to under $31.00 in four days (-10 correction).

Analysts' reaction to HBI's results have been positive. Some have noted that Q1 is normally a slower season for HBI. They see the pullback in HBI's stock as a buying opportunity. Multiple firms have raised their price target since the earnings report (new targets are $37, $38, and $40 per share).

Technically HBI has been consolidating sideways in the $30.50-32.00 zone the last several days and have just recently started to breakout from this trading range. We want to hop on board if this bounce continues. Tonight we're suggesting a trigger to open bullish positions at $32.35.

Long HBI stock @ $32.35

- (or for more adventurous traders, try this option) -

Long JUL $32.50 CALL (HBI150717C32.50) entry $1.05

06/27/15 new stop @ 33.85
06/20/15 new stop @ 31.85
05/30/15 new stop @ 31.45
05/21/15 triggered @ 32.35
Option Format: symbol-year-month-day-call-strike

chart:


IMAX Corp. - IMAX - close: 41.21 change: -1.68

Stop Loss: 40.90
Target(s): To Be Determined
Current Gain/Loss: -3.6%
Entry on June 15 at $42.75
Listed on June 13, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 732 thousand
New Positions: see below

Comments:
06/27/15: Being added to the Russell index didn't do much for shares of IMAX on Friday. Instead a disappointing performance last week turned into a terrible performance with IMAX plunging -3.8% on Friday. The stock has essentially erased the last two week's worth of gains.

The intraday low on Friday was $40.94. Our stop loss is at $40.90. No new positions at this time.

Trade Description: June 13, 2015:
It's shaping up to be a blockbuster summer for IMAX. First there was the second Avenger movie in May. Now Jurassic World is stomping its way to box office success while IMAX gets to ride its coattails.

The "Avengers: Age of Ultron" delivered the second biggest opening day with $84.4 million in U.S. sales. That's just below the last Harry Potter movie, which brought in $91 million on its first day. The new Jurassic World movie, the fourth Jurassic Park dinosaur flick, notched the third biggest opening day with $82.8 million. The new dinosaur-themed juggernaut is poised to do $200 million over the weekend.

As of early May, this Avengers 2 movie has already raked in $425 million overseas and is poised to do more than $200 million this weekend. Estimates suggest it could hit $600 million in the U.S. It had already crossed the $1 billion mark for worldwide sales by the middle of May. This movie is produced by Marvel Studios, a division of Disney (DIS), but it also means big business for IMAX. The Ultron movie delivered the biggest opening night sales for any IMAX film ever.

IMAX is part of the services sector. They're considered part of the entertainment industry. According to the company, "IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theatres to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe. IMAX is headquartered in New York, Toronto and Los Angeles, with offices in London, Tokyo, Shanghai and Beijing. As of March 31, 2015, there were 943 IMAX theatres (820 commercial multiplexes, 18 commercial destinations and 105 institutions) in 63 countries."

Today there is a battle for consumer's viewing habits. People consume their content on all sorts of devices from their smartphones, tablets, laptops, desktops, and their big screen TVs at home. Netflix and other streaming services have changed viewer habits and expectations. When consumers choose to go to the movies they want something different. According to IMAX's CEO that's why IMAX tickets are doing so well. It's an experience that can't be replicated at home.

The company had a lot of momentum going into 2015 thanks to huge hits like "American Sniper". IMAX has managed to beat Wall Street's earnings and revenue estimates for the last four quarters in a row. Their most recent earnings report was April 30th. Income surged +50% from a year ago. Analysts were expecting $0.05 a share. IMAX delivered $0.07. Revenues rose +29% to $62.2 million, significantly above estimates for $55.4 million.

IMAX CEO Richard Gelfond commented on their results, "This is a very exciting time for IMAX. Our continued progress in expanding our theatre network globally, along with our strong film performance during the first quarter, resulted in robust financial results with almost 30% revenue growth and over 50% adjusted earnings growth compared to the same period last year. With record results from Furious 7 in April and a great start to the Avenger's sequel internationally, the momentum has continued into the second quarter."

2015 is expected to be a huge year. The "Fast & Furious 7" film kept the momentum going. IMAX will also benefit from high-profile movies like "Avengers: Age of Ultron", Jurassic World, Terminator Genisys, Hunger Games: Mockingjay Part 2, the new James Bond movie, another Mission Impossible film (#5), and the next episode of Star War (#7) this December.

IMAX is rolling out new laser systems and they've signed long-term film deals with Disney and Warner Brothers. IMAX is currently growing at about 120 theaters a year. They're doing well in China. The Chinese movie box office is expected to eclipse the U.S. market by 2020.

Shares of IMAX popped to new all-time highs on May 28th after announcing its majority owned subsidiary, IMAX China Holding Inc., had filed for an IPO in Hong Kong. According to Reuters, IMAX is "looking to benefit from booming entertainment demand in the world's second largest economy." IMAX owns 80% of IMAX China. Shares of IMAX have spent the last couple of weeks churning sideways in the $40-42 zone but with a bullish trend of higher lows.

Friday's breakout past resistance near $42.00 could spark some short covering. The most recent data listed short interest at 18.4% of the 53.7 million share float. We are suggesting a trigger to launch bullish positions at $42.75

- Suggested Positions -

Long IMAX stock @ $42.75

- (or for more adventurous traders, try this option) -

Long SEP $45 CALL (IMAX150918C45) entry $1.60

06/20/15 new stop @ 40.90
06/15/15 triggered @ $42.75
Option Format: symbol-year-month-day-call-strike

chart:


PacWest Bancorp - PACW - close: 48.10 change: -0.25

Stop Loss: 46.40
Target(s): To Be Determined
Current Gain/Loss: -0.9%
Entry on June 25 at $48.55
Listed on June 23, 2015
Time Frame: Exit prior to earnings in late July
Average Daily Volume = 771 thousand
New Positions: see below

Comments:
06/27/15: PACW only lost 25 cents on Friday but the action was bearish. The early morning rally reversed and shares closed near their low for the day. Put it altogether and PACW has created a bearish engulfing candlestick reversal pattern but it needs to see confirmation. At the moment, broken resistance at $48.00 is holding up as new support.

No new positions at the moment.

Trade Description: June 23, 2015:
There has been a lot of expectations for the financial stocks to outperform once the Federal Reserve starts raising rates. While the actual date of the Fed's first rate hike since 2006 is still not clear yet it's widely believed that higher rates are coming. If not this year then early next year.

Robert Albertson, at Sandler O'Neill, was recently quoted by CNBC. Albertson said, "if the Fed funds rate goes to 0.6 percent by the end of this year, and 1.7 percent by the end of next year, which is pretty much what the Fed is projecting, you could get a 20 to 30 percent increase in the bottom line of many banks."

The XLF financial ETF is trading at multi-year highs but it's only up +1.7% this year. Meanwhile the smaller regional bank ETF, the KRE, is outperforming with a +11.4% gain year to date. PACW is a regional bank and so far it's only up +6.2% but there is a good chance it could play catch up with its peers.

According to the company, "PacWest Bancorp (PacWest) is a bank holding company with over $16 billion in assets with one wholly-owned banking subsidiary, Pacific Western Bank (Pacific Western). Through 80 full-service branches located throughout the state of California, Pacific Western provides commercial banking services, including real estate, construction, and commercial loans, to small and medium-sized businesses. Pacific Western and its CapitalSource Division deliver the full spectrum of financing solutions nationwide across numerous industries and property types."

PACW is actively growing through acquisitions. In the last fifteen years they have made 27 acquisitions and are currently digesting another one (Square 1 Bank, SQBK).

Net interest margin (NIM) is a key component to a bank's profitability. The five largest U.S. banks (U.S. Bancorp, Wells Fargo, Citigroup, Bank of America, and JPMorgan) have been struggling to build their NIM. According to Forbes, the weighted average for the five banks for fiscal year 2014 was 2.5% while Q4 2014 was 2.55%. That's down from a 2.8% average in 2012. (source). PACW's most recent quarterly results reported their NIM above 5.0%.

Technically shares of PACW have been showing relative strength the last few weeks and just broke out past major resistance at $48.00 today. The point & figure chart is very bullish and forecasting a long-term target at $64.00. Today's breakout could signal the next leg higher. We are suggesting a trigger to open bullish positions at $48.55.

- Suggested Positions -

Long PACW stock @ $48.55

- (or for more adventurous traders, try this option) -

Long SEP $50 CALL (PACW150918C50) entry $1.20

06/25/15 triggered @ $48.55
Option Format: symbol-year-month-day-call-strike

chart:


Starbucks Corp. - SBUX - close: 54.62 change: +0.55

Stop Loss: 53.45
Target(s): To Be Determined
Current Gain/Loss: +7.0%
Entry on May 18 at $51.05
Listed on May 15, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 5.8 million
New Positions: see below

Comments:
06/27/15: Shares of SBUX bucked the market's down trend on Friday. Instead shares were in rally mode by gapping open higher and rising +1.0% to close at a new record.

Tonight we are turning significantly more conservative by raising the stop loss up to $53.45. Actual support is closer to $53.00 but we want to try and protect some of our potential gains.

No new positions at this time.

Trade Description: May 16, 2015:
The world seems to have an insatiable appetite for coffee. Starbucks is more than happy to help fill that need. The first Starbucks opened in Seattle back in 1971. Today they are a global brand with locations in 66 countries. SBUX operates more than 21,000 retail stores with more than 300,000 workers.

A few years ago Business Insider published some facts on SBUX. The average SBUX customer stops by six times a month. The really loyal, top 20% of customers, come in 16 times a month. There are nearly 90,000 potential drink combinations at your local Starbucks. The company spends more money on healthcare for its employees than it does on coffee beans.

The company's earnings results were only mediocre most of 2014 year. You can see the results in SBUX's long-term chart below. After incredible gains in 2013 SBUX has essentially consolidated sideways in 2014. SBUX broke out of that sideways funk after it reported earnings in January 2015.

Five-Year Plan

In late 2014 SBUX announced their five-year plan to increase profitability. Here's an excerpt from a company press release:

"The seismic shift in consumer behavior underway presents tremendous opportunity for businesses the world over that are prepared and positioned to seize it," Schultz said (Howard Schultz is the Founder, Chairman, President, and CEO of Starbucks). "Over the next five years, Starbucks will continue to lean into this new era by innovating in transformational ways across coffee, tea and retail, elevating our customer and partner experiences, continuing to extend our leadership position in digital and mobile technologies, and unlocking new markets, channels and formats around the world. Investing in our coffee, our people and the communities we serve will remain at our core as we continue to redefine the role and responsibility of a public company in today's disruptive global consumer, economic and retail environments."

"Starbucks business, operations and growth trajectory around the world have never been stronger, and we are more confident than ever in our ability to continue to drive significant growth and meet our long term financial targets," said Troy Alstead, Starbucks chief operating officer. "We have more customers visiting more stores more frequently, both in the U.S. and around the world, than at any time in our history. And we expect both the number of customers visiting our stores and the amount they spend with us to accelerate in the years ahead. With a robust pipeline of mobile commerce innovations that will drive transactions and unprecedented speed of service, Starbucks is ushering in a new era of customer convenience. We believe the runway of opportunity for Starbucks inside and outside of our stores is both vast and unmatched by any other retailer on the planet."

The company believes they can grow revenues from $16 billion in FY2014 to almost $30 billion by FY2019. To do that they will expand deeper into regions like China, Japan, India, and Brazil. SBUX expects to nearly double its stores in China to over 3,000 locations in the next five years

They're also working hard on their mobile ordering technology to speed up the experience so customers don't have to wait in line so long at their busiest locations. This will also include a delivery service.

Part of the five-year plan is a new marketing campaign called Starbucks Evening experience. The company wants to be the "third place" between home and work. After 4:00 p.m. they will start offering alcohol, mainly wine and beer, in addition to new tapas-like smaller plates.

The company recently launched its first ever Starbucks Reserve Roastery and Tasting Room in Seattle, near their iconic first retail store. The new roastery is supposed to be the ultimate coffee lovers experience. CEO Schultz said they will eventually open up about 100 of these Starbucks Reserve locations.

SBUX is having a pretty good 2015 so far with the stock up +23%, outperforming the broader market. A lot of this gain was thanks to a post-earnings pops. SBUX reported its Q1 2015 results on January 22nd. Adjusted earnings, backing out one-time charges, were $0.80 a share. That's in-line with estimates. Revenues were up +13.3% to $4.8 billion, also in-line with estimates.

It was a very strong holiday period for SBUX thanks in part to astonishing gift card sales. The amount of money loaded onto SBUX gift cards during the holidays surged +17% to a record $1.6 billion. One out of every seven Americans received a SBUX gift card. The company also saw significant growth overseas with its China and Asia-Pacific business soaring +85% to sales of $495 million. Their mobile transactions have reached seven million transactions a week. Investors applauded the news in spite of the in-line results and sent SBUX soaring to new all-time highs the next day.

This earnings scenario, where SBUX delivers results in-line with estimates and rallies anyway, just happened again in late April. Of course it's worth noting that even in-line results still represent exceptional growth.

SBUX reported its Q2 (2015) on April 23rd. Earnings of $0.33 a share were in-line with estimates. Revenues were up +17.8% to $4.56 billion, slightly above expectations. It was their strongest growth in four years. Customers are responding well to new drink options and an updated food menu. They're also developing new delivery options, mobile pay options, and alcoholic drinks available at select locations.

Worldwide same-store sales grew +7%. This was significantly above estimates. It also marked the 21st consecutive quarter where SBUX's comparable store sales were +5% or more.

The company issued mixed guidance. The stronger dollar is having an impact. They see fiscal 2015 results in the $1.55-1.57 range. That compares to Wall Street estimates for $1.57 per share. However, the company's revenue estimates are more optimistic. They're forecasting +16-18% sales growth into the $19.1-19.4 billion zone compares to analysts' estimates of $19.1 billion.

SBUX popped to new highs following its results and then spent the next week consolidating lower. Investors started buying the dips again at its bullish trend of higher lows. It looks like the consolidation is over and SBUX is pushing higher. We want to hop on board. Tonight we are suggesting a trigger to open bullish positions at $51.05.

- Suggested Positions -

Long SBUX stock @ $51.05

- (or for more adventurous traders, try this option) -

Long JUL $50 CALL (SBUX150717C50) entry $2.07

06/27/15 new stop @ 53.45
06/16/15 SBUX expands it mobile service app coverage to more than 4,000 locations
06/04/15 new stop @ 49.95
05/18/15 triggered @ $51.05
Option Format: symbol-year-month-day-call-strike

chart:


Spirit AeroSystems - SPR - close: 56.26 change: +0.41

Stop Loss: 53.75
Target(s): To Be Determined
Current Gain/Loss: -0.3%
Entry on June 22 at $56.44
Listed on June 18, 2015
Time Frame: 6 to 8 weeks, exit prior to earnings in very late July
Average Daily Volume = 1.2 million
New Positions: see below

Comments:
06/27/15: SPR's performance on Friday was starting to look a lot like Thursday with a quiet consolidation sideways. Then in the last few minutes of trading SPR surged higher and outperformed the market with a +0.7% gain.

If SPR and the market are both positive on Monday I would consider new bullish positions here.

Trade Description: June 18, 2015:
Airline stocks have gotten crushed lately as investors worry about the airliner industry overbuilding capacity. It's a different story for the airplane makers. Shares of SPR just closed near all-time highs. The Dow Industrial Average is up +1.6% year to date. The S&P 500 is up +3.0%. SPR is outpacing them both with a +30% gain this year.

SPR is in the industrial goods sector. According to the company, "Spirit AeroSystems, with headquarters in Wichita, Kan., USA, is one of the world's largest non-OEM designers and manufacturers of aerostructures for commercial aircraft. In addition to its Wichita and Chanute facilities in Kansas, Spirit has locations in Tulsa and McAlester, Okla.; Kinston, N.C.; Prestwick, Scotland; Preston, England; Subang, Malaysia; and Saint-Nazaire, France.

In the U.S., Spirit's core products include fuselages, pylons, nacelles and wing components. Additionally, Spirit provides aftermarket customer support services, including spare parts, maintenance/repair/overhaul, and fleet support services in North America, Europe and Asia. Spirit Europe produces wing components for a host of customers, including Airbus."

On their website SPR notes that they "have long-term agreements in place with our largest customers, Boeing and Airbus. Other major customers include Bombardier, Rolls-Royce, Mitsubishi, Sikorsky and Bell Helicopter." SPR does so much business with Boeing (BA) that buying SPR is almost a stealth trade on BA's backlog. Looking at BA's most recent earnings report their backlog hit a record high of $495 billion. That's about 5,700 new planes. BA plans to significantly increase production in 2017 and again in 2018, which should mean an increase in revenues for SPR.

Earnings from SPR have been somewhat mixed. On February 3rd they reported their 2014 Q4 results with earnings at $0.87 per share. That was 10 cents better than expected. Yet revenues were only up +5% to $1.57 billion, which missed expectations.

Results improved in the first quarter. On April 29th SPR said earnings were up +18% from a year ago. Their $1.00 per share beat expectations. Revenues were almost flat at $1.74 billion but that still came in better than analysts were expecting. SPR management issued somewhat bullish guidance on 2015 earnings but their revenue estimate was soft.

The stock initially sold off on its Q1 report but traders bought the dip the very next day. SPR continues to build on its bullish pattern of higher lows. Today the stock is poised to breakout past short-term resistance at $56.20. We are suggesting a trigger to launch bullish positions at $56.35. Plan on exiting prior to SPR's Q2 earnings report in very late July or early August.

- Suggested Positions -

Long SPR stock @ $56.35

- (or for more adventurous traders, try this option) -

Long OCT $60 CALL (SPR151016C60) entry $1.60

06/22/15 triggered on gap open at $56.44
Option Format: symbol-year-month-day-call-strike

chart:


Sarepta Therapeutics - SRPT - close: 31.26 change: -1.40

Stop Loss: 29.85
Target(s): To Be Determined
Current Gain/Loss: +13.1%
Entry on June 10 at $27.65
Listed on June 09, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 1.2 million
New Positions: see below

Comments:
06/27/15: After big gains in recent weeks SRPT was overbought. Shares hit some profit taking on Friday. Thankfully on Friday afternoon traders started buying the dip and SRPT pared its loss to -4.2%.

Tonight we are raising our stop loss to $29.85.

No new positions at this time.

Trade Description: June 9, 2015:
Often biotech stocks can turn into a binary trade. You win big or lose big based on the company's clinical trials and success or failure with the FDA. SRPT is one such stock. Shares have seen some tremendous, gut-wrenching moves, both up and down, over the last couple of years.

If you're not familiar with SRPT they are a biotech stock (part of the healthcare sector). According to the company, "Sarepta Therapeutics is a biopharmaceutical company focused on the discovery and development of unique RNA-targeted therapeutics for the treatment of rare, infectious and other diseases. The Company is primarily focused on rapidly advancing the development of its potentially disease-modifying DMD drug candidates, including its lead DMD product candidate, eteplirsen, designed to skip exon 51. Sarepta is also developing therapeutics for the treatment of drug-resistant bacteria and infectious, rare and other human diseases."

SRPT does not have any products on the market, which is another reason they might be viewed as a binary trade. If they don't succeed with their Eteplirsen treatment for Duchenne Muscular Dystrophy (DMD) then its stock could collapse. DMD is a very rare disease. Only about 20,000 people a year are diagnosed with it in the U.S. It can be fatal by age 30.

SRPT made headlines on May 20th and the stock surged almost $10 with a +60% move to new eight-month highs. The reason behind the pop in the stock was the company's plan to submit a rolling New Drug Application (NDA) with the FDA for its Eteplirsen. This is a big deal. SRPT tried to get FDA approval to file an NDA back in 2013 but the regulators rejected their application saying they needed more data.

Now that SRPT can start the NDA process they should be able to meet with an advisory committee in the fourth quarter of this year, which could really generate a lot of volatility based on the committee's decision.

It's important to note that SRPT is facing competition from larger biotech firm BioMarin Pharmaceuticals (BMRN) who is working on a treatment for the same disease. If BMRN's treatment gets approved first it could send SRPT shares crashing.

Canaccord Genuity's analyst, Adam Walsh, issued an opinion on this SRPT news and multiple news outlets quoted him. According to Walsh,

"Looking forward, we see two potential catalysts to drive shares higher: 1) FDA acceptance of the NDA filing (60 days post-filing — est. late third quarter 2015); and 2) FDA announcement of Adcom to review the eteplirsen NDA. On the first, we fully expect FDA to accept the filing for review, given its blessing to submit the NDA. On the second, we believe an Adcom would allow for powerful testimony from DMD patients, parents, and advocacy groups in support of eteplirsen, which could sway committee members toward recommending approval. Thus, while we acknowledge that significant approval risks still remain, we would expect Sarepta shares to trend higher into an expected fourth quarter of 2015 Adcom."
The advisory panel is a major event for SRPT. One analyst suggested that if SRPT won approval their stock could shoot into the $40s. A different analysts said approval could launch SRPT's stock toward $100. Both said that another FDA rejection could send SRPT shares toward $10.

Part of the reason behind SRPT's big move in May was short covering. The most recent data listed short interest at 33% of the relatively small 35.8 million share float. Currently shares of SRPT are consolidating in a bullish pattern with resistance near $27.00-27.50. A breakout here could spark another wave of short covering.

There has been some speculation that SRPT is a buyout target although I did not see a lot of discussion about any potential suitors.

We are suggesting a trigger to launch small bullish positions at $27.65. We want to limit our position size because SRPT can be very volatile. I would consider this a higher-risk, more aggressive trade.

*small positions to limit risk* - Suggested Positions -

Long SRPT stock @ $27.65

- (or for more adventurous traders, try this option) -

Long AUG $30 CALL (SRPT150821C30) entry $3.00

06/27/15 new stop @ 29.85
06/23/15 new stop @ 29.25
06/20/15 new stop @ 26.75
06/10/15 triggered @ $27.65
Option Format: symbol-year-month-day-call-strike

chart:


TASER Intl. Inc. - TASR - close: 33.56 change: -0.26

Stop Loss: 32.95
Target(s): To Be Determined
Current Gain/Loss: -4.7%
Entry on June 16 at $35.20
Listed on June 15, 2015
Time Frame: Exit PRIOR to earnings in late July
Average Daily Volume = 2.3 million
New Positions: see below

Comments:
06/27/15: We are pulling the plug on this TASR trade. The stock has lost its energy. Shares have been underperforming and TASR now has a short-term bearish trend of lower highs over the last several days.

We want to exit immediately on Monday morning.

*consider using small positions to limit risk*

- Suggested Positions -

Long TASR stock @ $35.20

- (or for more adventurous traders, try this option) -

Long SEP $37 CALL (TASR150918C37) entry $2.65

06/27/15 Prepare to exit on Monday morning
06/24/15 Warning! TASR reversed again
06/22/15 new stop @ 32.95
06/16/15 triggered @ $35.20
Option Format: symbol-year-month-day-call-strike

chart:


Tempur Sealy Intl. - TPX - close: 67.18 change: +1.07

Stop Loss: 64.40
Target(s): To Be Determined
Current Gain/Loss: +6.4%
Entry on June 10 at $63.15
Listed on June 08, 2015
Time Frame: 6 to 8 weeks
Average Daily Volume = 890 thousand
New Positions: see below

Comments:
06/27/15: The relative strength in TPX continues. Shares rallied another +1.6% on Friday to close at multi-year highs. I would not chase it here. Tonight we are moving the stop loss up to $64.40.

Trade Description: June 8, 2015:
Activist investors seek to influence management to incorporate major changes in a company with the expectation of unlocking shareholder value. Sometimes the mere mention of an activist investor buying a stock can get shares to move. In TPX's case the activists have won a major battle with management.

TPX is in the consumer goods sector. According to the company, "Tempur Sealy International, Inc. (NYSE: TPX) is the world's largest bedding provider. Tempur Sealy International develops, manufactures and markets mattresses, foundations, pillows and other products. The Company's brand portfolio includes many of the most highly recognized brands in the industry, including Tempur, Tempur-Pedic, Sealy, Sealy Posturepedic, OptimumTM and Stearns & Foster. World headquarters for Tempur Sealy International is in Lexington, KY."

TPX's most recent earnings report was April 28th. They announced their 2015 Q1 results with earnings of $0.55 per share. That was seven cents above estimates. Revenues were up +5.4% to $739.5 million. This was also above expectations. Management raised their 2015 forecast for both earnings and sales. The stock popped to new multi-year highs on this news. Yet the real story is probably the activist investors involved.

Hedge fund H Partners has been urging change with TPX management for months. TPX executives choose to fight. It came down to a proxy fight and shareholders voted to oust the CEO. Two more directors, who were under fire by H Partners have also left the board. H Partners built a website to inform shareholders their opinion on the company (www.fixtempursealy.com). There they posted their 90 page slideshow on why TPX needed a management change. You can see their presentation at this webpage.

The stock has been oscillating sideways in the $58-63 zone the last few weeks. It's starting to look like the consolidation may be over. TPX displayed relative strength last week and it held up today as well while the rest of the market was sinking. If TPX can trade over $63.00 it will generate a new quadruple top breakout buy signal on the P&F chart. We are suggesting a trigger to launch bullish positions at $63.15.

- Suggested Positions -

Long TPX stock @ $63.15

- (or for more adventurous traders, try this option) -

Long SEP $65 CALL (TPX150918C65) entry $3.50

06/27/15 new stop @ 64.40
06/22/15 new stop @ 61.90
06/10/15 triggered @ $63.15
Option Format: symbol-year-month-day-call-strike

chart:


The WhiteWave Foods Co. - WWAV - close: 49.90 change: +0.23

Stop Loss: 48.75
Target(s): To Be Determined
Current Gain/Loss: -0.7%
Entry on June 23 at $50.25
Listed on June 22, 2015
Time Frame: Exit prior to earnings in August
Average Daily Volume = 1.9 million
New Positions: see below

Comments:
06/27/15: WWAV spent most of Friday in a sideways drift. Traders eventually bought the dip near $49.50 on Friday afternoon and the stock rallied to a +0.4% gain. The intraday high was $50.06. Consider waiting for a rally past this level before initiating new bullish positions.

Tonight we're raising the stop loss to $48.75.

Trade Description: June 22, 2015:
Consumer tastes and buying habits are changing and more people are opting for more natural and organic foods.

WWAV is in the consumer goods sector. You might not recognize the name but they are behind brands like Silk, Horizon Organic, Land-O-Lakes, International Delight, Alpro, and Earthbound Farm Organic.

WWAV considers themselves "a leading consumer packaged food and beverage company that manufactures, markets, distributes, and sells branded plant-based foods and beverages, coffee creamers and beverages, premium dairy products and organic produce throughout North America and Europe. The Company is focused on providing consumers with innovative, great-tasting food and beverage choices that meet their increasing desires for nutritious, flavorful, convenient, and responsibly-produced products. The Company's widely-recognized, leading brands distributed in North America include Silk plant-based foods and beverages, International Delight and LAND O LAKES* coffee creamers and beverages, Horizon Organic premium dairy products and Earthbound Farm' certified organic salads, fruits and vegetables. Its popular European brands of plant-based foods and beverages include Alpro and Provamel" (The Land-O-Lakes brand is licensed from the owners).

If you're looking for a company that is growing then keep an eye on WWAV. They have beaten Wall Street's estimates on both the top and bottom line relatively consistently for the last six quarters. In February they did miss the bottom line EPS number by three cents but beat the revenue estimate (with +34% growth). Then in May this year they beat on the bottom line but their revenue number was murky.

Looking at WWAV's most recent report (May 8th) the company delivered earnings of $0.24 per shares versus estimates for $0.22. Revenues were up +9.8% to $911 million. Depending who you ask this revenue number is either a small miss or it was in-line with estimates. One thing worth noting is that sales in Europe were hurt by currency headwinds.

WWAV management offered a bullish outlook on their fiscal Q2 earnings. They raised their 2015 sales estimate as well.

This month WWAV announced a big acquisition with a $550 million deal to buy plant-based nutrition maker Vega. Initially there was some concern that WWAV paid too much for Vega but the smaller company has seen its sales grow +50% in 2016. WWAV expects the Vega deal to close in the third quarter and it will add six cents per share to WWAV's 2016 earnings.

The stock has been a big winner this year. The S&P 500 is up +3.1% year to date. The NASDAQ is up +8.8%. Shares of WWAV are up +43% and show no signs of slowing down. The company has been mentioned as a potential acquisition target by multiple people this year.

Currently WWAV is hovering just below round-number resistance at $50.00. We are suggesting a trigger to launch bullish positions at $50.25.

- Suggested Positions -

Long WWAV stock @ $50.25

- (or for more adventurous traders, try this option) -

Long OCT $55 CALL (WWAV151016C55) entry $1.69

06/27/15 new stop @ 48.75
06/23/15 triggered @ $50.25
Option Format: symbol-year-month-day-call-strike

chart:




BEARISH Play Updates

Continental Resources, Inc. - CLR - close: 43.31 change: -0.68

Stop Loss: 44.85
Target(s): To Be Determined
Current Gain/Loss: +1.0%
Entry on June 22 at $43.75
Listed on June 20, 2015
Time Frame: 6 to 8 weeks, exit prior to earnings in August
Average Daily Volume = 8.8 thousand
New Positions: see below

Comments:
06/27/15: Bingo! It looks like the sideways consolidation in CLR is over. Shares underperformed the market on Friday with a -1.5% decline and a drop to new three-month lows. This move looks like a new entry point. We are moving our stop loss sharply lower down to $44.85.

Trade Description: June 20, 2015:
There are a lot of currents moving the oil industry these days. Currency moves, OPEC production, access to capital, falling rig counts, and potential bankruptcies. The stock performance for U.S. shale oil drillers have been suffering. CLR is one such stock.

CLR is in the basic materials sector. According to the company, "Continental Resources (CLR) is a Top 10 independent oil producer in the United States and a leader in America's energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and one of the largest producers in the nation's premier oil field, the Bakken play of North Dakota and Montana. The Company also has significant positions in Oklahoma, including its SCOOP Woodford and SCOOP Springer discoveries and the Northwest Cana play."

Earnings have taken a hit. CLR reported their Q1 results on May 6th. They reported a net loss of $186 million or 36 cents a share. That's a big drop from a 61-cent profit a year ago. After adjusting for writedowns and one-time items CLR said their quarterly earnings were a loss of ($0.09) per share. That was actually four cents better than analysts' estimates for a ($0.13) loss. Revenues plunged -41% to $592.89 million even though CLR's production surged +36% from a year ago.

Bullish investors could argue that crude oil put in a bottom earlier this year and the commodity should rally toward year end. Bulls can also point to falling production costs as a tailwind for the industry. CLR said their completion costs for wells dropped -15% from the end of 2014. Obviously this makes the company more profitable (or at least cuts their losses). Optimistically CLR expects their cost reductions to hit 20% by mid-year. There are some on Wall Street who think the industry has seen a bottom. Shares of CLR were upgraded by Goldman Sachs to a "buy" in May.

Bulls also note that the plunge in active rigs should be bullish for oil and thus oil companies. Weekly rig count, compiled by Baker Hughes, showed that the number of active oil and gas rigs fell again last week. This is the 28th week in a row that the number of rigs has declined. We're now down to 857 active oil and gas rigs, which hasn't been this low since early 2003.

Naturally you might think that a plunge to 12-year lows for active rigs means that U.S. oil production would shrink as well. That hasn't happened yet. While costs are going down oil producers are actually more efficient at pumping per well so production is going up. The low rig count is a leading indictor that production will eventually decline but it could be months from now. The U.S. EIA doesn't expect U.S. production to fall until early next year.

A bigger problem for the oil industry is competition. The recent OPEC meeting showed that the Saudis are willing to pump as much oil as they can to maintain their market share regardless of the price of oil. These are state-run oil companies and don't have to report to shareholders like American drillers. Plus the average cost per barrel of oil is a lot lower in Saudi than the U.S.

Another challenge for many drillers is capital. Drilling shale oil wells and fracking costs a lot of money. The drop in crude oil prices has made lenders less likely to loan money to drillers. To compensate for the lack of capital the oil drillers might be forced to sell more stock to raise capital and this would dilute current shareholders and drive stock prices lower. This past week the Cowen research company said, ""We expect ... E&Ps to issue additional equity in 2H2015 to fund 2016 capex as borrowing bases will be declining and debt metrics deteriorating."

The issue of debt and access to capital could be a fatal one. There are growing predictions that we will see up to a dozen publicly traded oil and gas companies file for bankruptcy between July 2015 and June 2016. Now CLR is not on the list but if we see smaller rivals start to go bankrupt it is going to put pressure on all the oil-industry stocks.

Oil stocks are also going to react to currency moves. The Federal Reserve wants to raise rates and that will lift the dollar. Even if the Fed doesn't raise rates the QE programs in Japan and Europe could drive the yen and euro lower, which boosts the dollar. A rising dollar pressures commodity prices lower.

A lot of investors are already betting on CLR to decline. The most recent data listed short interest at 17.9% of the 84.8 million share float. We think the bears are right. CLR has been underperforming the broader market. The point & figure chart is bearish and forecasting at $35.00 target. I suspect the 2015 lows near $42.00 could be support. Tonight we are suggesting a trigger to open bearish positions at $43.75.

- Suggested Positions -

Short CLR stock @ $43.75

- (or for more adventurous traders, try this option) -

Long SEP $40 PUT (CLR150918P40) entry $2.00

06/27/15 new stop @ 44.85
06/25/15 new stop @ 48.35
06/22/15 triggered @ $43.75
Option Format: symbol-year-month-day-call-strike

chart:


On Deck Capital - ONDK - close: 12.52 change: +0.13

Stop Loss: 13.25
Target(s): To Be Determined
Current Gain/Loss: +12.8%
Entry on June 02 at $14.35
Listed on June 01, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 431 thousand
New Positions: see below

Comments:
06/27/15: ONDK dipped toward its recent lows and then bounced at support in the $12.10 area. The rebound lifted ONDK to a +1.0% gain but the rally stalled at technical resistance at the 10-dma.

If shares breakout past the 10-dma it might spark some short covering. More conservative traders may want to take some money off the table now or lower their stop loss.

No new positions at this time.

Trade Description: June 1, 2015:
You know something is wrong when a stock is down -50% from its post-IPO peak in less than six months.

ONDK is part of the financial sector. Here's how the company describes itself:

"OnDeck (ONDK), a leading platform for small business loans, is committed to increasing Main Street's access to capital. OnDeck uses advanced lending technology and analytics to assess creditworthiness based on actual operating performance and not solely on personal credit. The OnDeck Score, the company's proprietary small business credit scoring system, evaluates thousands of data points to deliver a credit decision rapidly and accurately. Small businesses can apply for a line of credit or term loan online in minutes, get a decision immediately and receive funds in as fast as the same day. OnDeck also partners with small business service providers, enabling them to connect their customers to OnDeck financing. OnDeck's diversified loan funding strategy enables the company to fund small business loans from various credit facilities, securitization and the OnDeck Marketplace, a platform that enables institutional investors to purchase small business loans originated by OnDeck.

Since 2007, OnDeck has deployed more than $2 billion to more than 700 different industries in all 50 U.S. states, and also makes small business loans in Canada. The company has an A+ rating with the Better Business Bureau and operates the website BusinessLoans.com which provides credit education and information about small business financing. On December 17, 2014, OnDeck started trading on the New York Stock Exchange under the ticker ONDK."

The company charges outrageous interest rates on its short-term loans. According to the SEC filings these can range from 20% to 99% APRs. They get away with this by only loaning to businesses and not individual consumers. Rising defaults are an issue. The company expects about 7% of their loans to go into default but some of the latest numbers suggest reality is closer to 20%. There is a concern that companies like ONDK will face future regulations that will limit how much interest they can charge. Another bear argument is valuations.

The company was valued around $1.4 billion at its IPO. Even with the decline it's still valued near $1 billion today. That's for a company without any profits. They lost ($0.01) per share in the fourth quarter and that jumped to a loss of ($0.05) per share in the first quarter.

Another potential landmine for shareholders is ONDK's six-month lockup expiration. Currently there are about 13.2 million shares outstanding. On June 15th, 2015 another 56 million shares are unlocked.

The stock broke down on its earnings report in early May. Now it's breaking down below its 2015 lows in the $14.50-15.00 zone. The point & figure chart is bearish and forecasting at $7.00 target.

The stock has seen some volatile moves. I would consider this a more aggressive, higher-risk trade. Tonight I am suggesting a trigger to launch bearish positions at $14.35. Traders may want to use put options to limit their risk.

- Suggested Positions -

Short ONDK stock @ $14.35

- (or for more adventurous traders, try this option) -

Long AUG $14 PUT (ONDK150821P14) entry $1.80

06/20/15 Caution! ONDK may have formed a bullish double bottom
06/16/15 new stop @ 13.25
06/15/15 new stop @ 14.25
06/10/15 new stop @ 15.15
06/02/15 triggered @ $14.35
Option Format: symbol-year-month-day-call-strike

chart:



CLOSED BULLISH PLAYS

Seattle Geneitcs, Inc. - SGEN - close: 47.45 change: -0.24

Stop Loss: 46.75
Target(s): To Be Determined
Current Gain/Loss: -0.8%
Entry on June 08 at $47.15
Listed on June 06, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 1.1 million
New Positions: see below

Comments:
06/27/15: The profit taking in SGEN continued for a third day on Friday. Shares pierced their 20-dma and hit our stop loss at $46.75.

- Suggested Positions -

Long SGEN stock @ $47.15 exit $46.75 (-0.8%)

- (or for more adventurous traders, try this option) -

SEP $55 CALL (SGEN150918C55) entry $2.45 exit $1.40 (-42.9%)

06/26/15 stopped out
06/25/15 new stop @ 46.75
06/16/15 new stop @ 45.75
06/08/15 triggered @ $47.15
Option Format: symbol-year-month-day-call-strike

chart: