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Daily Newsletter, Wednesday, 7/1/2015

Table of Contents

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

Market Wrap

Dead-Cat Bounce or Bullish Reversal?

by Keene Little

Click here to email Keene Little
By several measures the market became quickly oversold on Monday and more so on Tuesday. Some measures were at levels where previous strong rallies have started, which makes today's bounce potentially bullish. But a bounce of the dead-cat variety is what bulls need to worry about.

Wednesday's Market Stats

It's been a bit of a wild ride this week, thanks to what's going on with Greece and the EU. The stock market rallied from June 15th into the June 22/23 highs based on an expectation that a solution to Greece's next bailout would be found and traders were front-running an expected rally. Sunday night, when Alexis Tsipras effectively thumbed his nose at the EU finance heads, indicating a willingness to take a gamble that Greece would default on its loans and get kicked out of the EU, all those who bought into an expected rally suddenly found themselves underwater Monday morning.

The selling continued into Tuesday but today we got an oversold bounce and now we're left wondering if it's just a dead-cat bounce or something more bullish. There's still hope that the Greek tragedy will be resolved in a market-friendly way. We'll find out a lot more after the Greek vote this Sunday. Tsipras has been encouraging voters to vote "no" to the EU demands and accept the risk of leaving the EU and higher inflation due to going back to the drachma currency and printing their way out of their problems (that won't work in the long run either). A "yes" vote to stay in the EU and accept higher taxes and more austerity (reducing pensions, raising retirement ages, etc.) would be market friendly

If Greece ends up leaving the EU, either voluntarily or not, it will open the door to other nations leaving. It could be the first domino to fall and that's what worries the markets. I've read analysis by some very smart people and they couldn't be more diametrically opposed in their opinions, leaving me thinking no one has a clue what might happen, and the market hates uncertainty, which makes for a more volatile market.

Greece owes about $260B (240B euros) and they defaulted on the $1.7B payment that was due yesterday. It is now believed Tsipras overplayed his hand, which was weaker than the EU's, and is now scrambling to make a deal. He might not have thought through the consequences of shutting down the banks (bank "holiday") and essentially shutting down businesses and people's ability to transact business. Even credit card purchases are not being allowed since that's considered withdrawals from banks, which are limited to 60 euros/day. But not much, if anything will be accomplished until the Greek vote and then the two sides will figure out the next move.

Greek citizens have been fearful of a bank closure and that's why so many have been withdrawing money from their accounts. Since November 2014 they've cleared out about $34B euros, about one fifth of total deposits. The ECB had been lending money to the Greek banking system to keep it afloat but they've now cut that off, hence the bank "holiday," which of course is not like your typical bank holiday. In this case the government simply prevents access to bank accounts and is essentially free to do what they want with the money. More bail-ins? Quite possible. How this plays out should be quite instructive for people in other countries facing similar financial problems. Think Portugal, Spain, Italy and Ireland.

If Greece ends up leaving the EU and survives, with lots of pain of course, we could see the other financially weaker countries (owing lots of money to the EU) follow in Greece's footsteps. This would of course unravel the EU as we know it and that's what scare EU leaders. What happens to the people's money in Greek banks will also be instructive. If the people end up losing their accounts, either through forfeiture (government theft) or high inflation, people from other countries will have learned what they need to do to protect themselves. That would of course mean withdrawing their money from bank accounts.

Below is a chart showing the European countries in order of government debt as a percentage of their GDP:

EU country Debt-GDP percentage, chart courtesy CaseyResearch

The U.S. is not immune to such a problem either. The chart below shows our debt climbing steadily since 1980 with only a brief break from about 1997 to 2000. The current rate, updated today, is 101.5%, which places us between Spain and Belgium on the above chart. For reference, the U.K. is currently 89.4 and Japan is a whopping 224 (a bug in search of a windshield).

U.S. government Debt-to-GDP percentage, chart courtesy TradingEconomics.com

Bank "holidays" are always a surprise -- if the government warned of a bank holiday it would alert people to get their money out. Once the "holiday" is announced, usually over the weekend, people find they no longer have access to their money. The government institutes capital controls as it essentially takes over the banking system. For this reason it's important for all of us to be thinking about alternative investments to shield our money. Don't have all your eggs in one basket in case that basket gets stolen.

The U.S. might be in a lot better shape than other countries but we still should be prepared for a sudden and surprise announcement that we can no longer have full access to our money and the possibility of a bail-in to help the government pay its bills. Confiscation of retirement accounts, replaced with Treasury certificates, is a real possibility in the not-too-distant future. If you think this can't happen here then you could be considered as naive as many Greeks who didn't think this could happen to them either.

The common pattern to be aware of over the next few years is: 1) the financial system is in trouble -- too much leverage and not enough capital to protect against losses; 2) the country's leaders deny there's any problem, which is your clue that they're lying; 3) wealth confiscation begins, through tax increases, bail-ins, etc.; 4) additional capital controls to take over the banking system, at which point you are completely at the mercy of the government. As Doug Casey, at Casey Research says, "The diminution of personal and financial freedom looks like a hyperbolic curve, at first with an almost unnoticeable slope, then one that gets steeper and steeper, at an accelerating rate." The trick is to recognize the early part of this pattern.

Ways to protect your investments include precious metals, land (real estate), especially farm land (food will always be needed), and foreign bank accounts (be careful in which country you place your money). We of course hope that these protections will never be needed but there's a reason it's called contingency planning. It's like buying insurance on your house -- you hope you'll never need to use but you're sure glad to have it when some yahoo torches his garage and the flames leap over onto your house and burn it to the ground.

But enough about planning for the future, what the heck does this week's price action mean for next week and this month? Unfortunately, the longer-term picture hasn't cleared up yet. It looks a whole lot more bearish than it did last week but as I'll show on the charts, it's possible we've seen (or are seeing) the completion of an a-b-c pullback off May's highs, which will be followed by another rally to new highs. While that possibility looks less likely than the start of a more serious selloff, it must be considered when making your trading plans (where to place stops).

Starting with the DOW's weekly chart below, you can see how yesterday's low at 17590 came very close to its 50-week MA at 17575. It's also close to its uptrend line from October 2011 - October 2014, currently near 17510. Things would turn more bearish below 17500 but in the meantime it's not hard to see the potential for another rally back up to the trend line running along the highs from last December, near 18500 by the end of July. Obviously that would be a nice trade on the long side if that's what we're looking for. I remain unconvinced we'll see that kind of move but bears need to recognize the potential and why stops need to be managed carefully.

Dow Industrials, INDU, Weekly chart

The bearish picture for the DOW is shown on its daily chart below, which is a H&S topping pattern. The neckline, which is the shallow uptrend line from March 26 - June 15, was broken Monday but recovered today. It was back-tested with yesterday's high at 17714, as well as its 200-dma at 17684, and today it closed back above both. That leaves a possible head-fake break that will be followed by a new rally leg. Another point in the bull's favor is the fact that the 3-wave pullback from May nearly achieved two equal legs down at 17553 with yesterday's low at 17590. That strengthens the idea that it completed an a-b-c pullback from May as a correction to the longer-term uptrend and now the uptrend will resume. Even if we get a new low tomorrow it doesn't negate the bullish potential and if the DOW finds support at roughly 17500-17550 I'll be looking for at least a bigger bounce early next week. Then next week I'd be looking for evidence of something more bullish or instead just a bounce before turning back down. A new low tomorrow that sets up a higher bounce suggests a positive market reaction next Monday following the Greek vote. But it would turn more bearish below 17500.

Dow Industrials, INDU, Daily chart

Key Levels for DOW:
- bullish above 18,000
- bearish below 17,500

SPX has the same pattern as the DOW (a little uglier H&S top). It too broke the neckline on Monday, popped above it today but then closed at the line, leaving the potential for just a back-test and bearish kiss goodbye tomorrow. But a new low on Thursday would still be a setup for a larger bounce/consolidation before continuing lower this month. If we do get a new low on Thursday I'll be looking for support in the 2048-2054 area, which includes its 200-dma near 2054.

S&P 500, SPX, Daily chart

Key Levels for SPX:
- bullish above 2109
- bearish below 2048

The 60-min chart below shows the afternoon bounce back up to the H&S neckline near 2078, leaving both sides guessing whether or not the line will hold as resistance. A drop lower would complete the 5th wave of the leg down from June 22nd and it would equal the 1st wave near 2048. Below that level would look more bearish but if it finds support in the 2048-2054 area I'll be looking for a higher bounce and/or larger consolidation pattern through next week before continuing lower. It takes a rally above 2105 to turn things more bullish but a strong impulsive rally (not evident yet) would provide a bullish heads up.

S&P 500, SPX, 60-min chart

The Nasdaq failed to hold its breakout attempt above 5132 (the March 2000 high) last week and it quickly dropped below the little parallel up-channel that it was in since its May 6th low. It bounced back up to the bottom of the channel this morning, near 5035 (with a high at 5038), but then dropped away, leaving a bearish back-test and kiss goodbye. Based on this pattern it should continue lower on Thursday and keep it aligned with what I see for the blue chips. A new low, especially with bullish divergence against Monday's low at 4956, would be a good setup for a higher bounce next week. The bounce, if it plays out, should make it at least back up to its 20- and 50-dma's, which will be near 5050 next week. A higher bounce could make it back up to the trend line along the highs from January 2004 - October 2007, near 5110 next week. Back above 5132 would have me looking for higher highs, potentially up to the 5200 area.

Nasdaq Composite index, COMPQ, Daily chart

Key Levels for NDX:
- bullish above 5132
- bearish below 4888

The RUT was the weaker index today, which is not what the bulls want to see. It only managed to bounce back up to its broken uptrend line from October 2014 - May 2015, which is the line that supported all pullbacks since May 6th. As you can on its daily chart below, traders think this is an important trend line and today's failure to get back above the line leaves a bearish kiss goodbye instead. If it drops lower on Thursday there's good support in the 1240-1243 area to watch for at least a short-term bottom to set up a bounce into next week, perhaps back up for another back-test, near 1270, or up to price-level S/R near 1279. Above 1280 would have me thinking more bullishly about the RUT but not before -- shorting rallies appears to be the better bet until proven otherwise.

Russell-2000, RUT, Daily chart

Key Levels for RUT:
- bullish above 1280
- bearish below 1233

Another index that is more bearish than bullish at the moment is the NYSE. As can be seen on its daily chart below, it has been using its 200-dma as S/R since March. It bounced sharply off it on June 9th but broke below it on Monday. Notice too where it opened on Monday -- just below its uptrend line from last December, which was last tested on June 9th and 15th. The break of that trend line was important, as was the break of the 200-dma. This morning it managed to bounce back up to the 200-dma, at 10885 (with a high at 10890), and then sold off, leaving a bearish kiss goodbye (so far). As with the others, a minor new low on Thursday would be a good setup for a higher bounce next week, one where NYA could make it back up to its broken uptrend line, near 11K next week and maybe even high enough to close Monday's gap at 11040.

NYSE Composite index, NYA, Daily chart

Treasuries have been volatile for the past few weeks as bond traders try to figure out the longer-term impact from Fed policies and global events. The projection at 2.453% (two equal legs up from January) and the uptrend line from July 2012 - May 2013 have been exceeded twice since June 10th but both times have failed to hold. Monday's sharp decline has been followed by another bounce back up toward both, which cross next week. A sustained rally above 2.5% would be bullish but only if it's able to negate the bearish divergence that's been building since May's high. Otherwise I continue to believe Treasury yields will be heading much lower this year (rally in bond prices), especially if the stock market is getting ready for a swan dive.

10-year Yield, TNX, Daily chart

While many of the other indexes are in synch with the big ones reviewed above, it's the TRAN that has been out in front of this decline and I continue to watch it for clues. The pattern remains bearish as it consolidates Monday's loss and it takes a rally above its last shelf of support near 8260 to give us a bullish heads up. Not until it can get above 8515 would it turn bullish and for now there's downside potential to the bottom of a parallel down-channel from March, currently near 7965. It could make it down to a price projection at 7841 after failing to hold at the projection at 8266 (two equal legs down from February 25th). Today's price action produced a long-legged doji at the trend line along the lows from April 6 - May 29 and as long as that line holds as resistance, after breaking on Monday, the bears maintain control.

Transportation Index, TRAN, Daily chart

No change for the U.S. dollar -- I continue to watch to see if it forms a big sideways consolidation this year. As long as it stays between 93 and 100 I don't see any reason to think otherwise.

U.S. Dollar contract, DX, Weekly chart

It's been two weeks since I've updated gold's chart (since I missed last Wednesday) and my last update (June 17) called for a bounce up to about 1202-1205 before heading lower. Near that level was a projection for two equal legs up from June 5th (for an a-b-c bounce correction), near 1202, and the 38% retracement of the February-March decline is at 1205. Not shown on the chart, a 62% retracement of the May-June decline is also near 1205 and that made a tough zone of resistance for gold bugs. Gold topped out at 1205.70 on June 18th and is now back down near its June 5th low at 1162. I expect that to break and see gold sell off toward 1090, if not lower.

Gold continuous contract, GC, Daily chart

Silver's weekly chart below shows it's back down to its shelf of support near 15.25 (Monday's low was 15.42). As noted on the chart, a breakdown, assuming it will, should lead to a drop down to the $12 area, which is where it would meet downside price objectives out of its previous descending triangle (June 2013 - August 2014) and its rectangular consolidation pattern (November 2014 - present). The bottom of a parallel down-channel for its decline from April 2011 will be near 11.50 by the end of August and that remains a potential downside target as well. I show the start of a bullish rally following that kind of move down but that will have to be evaluated when the time comes.

Silver continuous contract, SI, Weekly chart

I continue to believe oil will head back down but it's not clear if it will drop to a new low or just consolidate sideways this year before dropping lower. At the moment it looks like it's ready to roll over and as long as it stays below the June 24th high at 61.57 I'd stay bearish oil for now.

Oil continuous contract, CL, Weekly chart

The market is not paying much attention to economic reports right now but the NFP report tomorrow before the bell could certainly be a market mover. This morning we had the ADP report, which came in at +237K, higher than the expected 220K and better than the 203K in May. Tomorrow's NFP report is expected to show an increase of 250K jobs, which is less than the 280K in May but might come in a little stronger if today's ADP report is a good indication. Of course we still have the problem of trying to figure out if a strong number is bullish or bearish for the market. A strong employment number could embolden the Fed to lean more strongly to a rate hike, which the market doesn't like.

We also received the ISM Index report this morning and that also came in a little stronger than expected, 53.5 vs. 53.2, and better than May's 52.8. Construction spending dropped to +0.8%, from 2.1%, but it was better than the expected +0.3%. Auto sales were expected after the bell but I never saw any numbers.

Other than the employment numbers tomorrow, we'll get the Factory Orders report after the open. It's expected to show a little more deterioration, dropping to -0.5% for May, from -0.4% in April. It's old news so very likely it will have no effect on the market.

Economic reports and Summary

Conclusion

Following the market's reaction to the NFP report before the open tomorrow we could see a relatively quiet market since it's the day before a holiday weekend and traders will likely not want to place any big bets in front of the Greek vote on Sunday. Monday could be another wild day, one way or the other, and there are strong arguments for either way. It's the reason I will be basically flat in front of the weekend (with a small strangle position just in case the market tanks on Monday, in which case it could crash, or in case it takes off on another hopium-induced rally.

The EW pattern calls for one more leg down on Thursday before setting up a long play into next week. Fear of the Greek vote could cause some selling on Thursday and unless the market is going to crash next week I think we'll see a positive reaction on Monday (assuming we first get a new low on Thursday). A new low with bullish divergence tomorrow would provide a decent signal for a long play into next week. A strangle position with OTM puts and calls is a little risky because premiums could deflate quickly without a big move and I could lose on both positions. Hence a small position with known and acceptable risk.

If we do get a new low on Thursday followed by a big bounce next week I'll be looking at it as a shorting opportunity later next week. Hopefully by this time next week we'll have a good opportunity to evaluate a bounce to see if it should be shorted or instead look to buy pullbacks. And if we don't get a bounce on Monday, short will be the place to be and just hang onto your hat for a wild ride down the slope.

Good luck and I'll be back with you next Wednesday.

Keene H. Little, CMT

In the end everything works out and if it doesn't work out, it is not the end. Old Indian Saying


New Plays

Holiday + Greek Referendum = Low Volume Tomorrow

by James Brown

Click here to email James Brown

Editor's Note:

The U.S. stock market is closed on Friday, July 3rd, for the Independence Day holiday. A lot of market participants are already on vacation for the rest of the week.

In addition to the holiday on Friday the Greek referendum to vote on accepting a new bailout deal is scheduled for July 5th. Investors are likely to sit on the sidelines until after the referendum.

The combination of a short trading week and the Greek referendum will produce very, very low trading volume tomorrow.

Odds are the market drifts sideways tomorrow. However, we will get the June nonfarm payrolls (jobs) report out tomorrow morning. If this number comes in too hot or too cold it could generate some volatility in the U.S. market.

We are not adding any new trades tonight.




In Play Updates and Reviews

The Bounce Continues

by James Brown

Click here to email James Brown

Editor's Note:
Stocks looked a little short-term oversold after Monday's big drop. Traders bought the dip yesterday and that dip buying continued on Wednesday. There seems to be new hope for a deal for Greece.

NBIX and MUR both hit our entry triggers today.


Current Portfolio:


BULLISH Play Updates

Natus Medical Inc. - BABY - close: 42.29 change: -0.27

Stop Loss: 41.85
Target(s): To Be Determined
Current Gain/Loss: -1.9%
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:
07/01/15: It was not a good day for BABY bulls. The stock tried to rally but failed at short-term resistance near $43.00. On the plus side traders did buy the dip near $42.00. I doubt BABY will be stuck in this $42-43 zone for very long. Odds are the stock will break out one way or the other in the next day or two.

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


Chimerix, Inc. - CMRX - close: 45.80 change: -0.40

Stop Loss: 42.95
Target(s): To Be Determined
Current Gain/Loss: -0.8%
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:
07/01/15: CMRX tried to rally this morning too. Unfortunately the rally failed near short-term resistance in the $47.25-47.50 zone. CMRX eventually underperformed the market with a -0.8% decline.

I am not suggesting new positions at this time.

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


Neurocrine Biosciences Inc. - NBIX - close: 47.66 change: -0.10

Stop Loss: 44.85
Target(s): To Be Determined
Current Gain/Loss: -1.3%
Entry on July 01 at $48.27
Listed on June 30, 2015
Time Frame: Exit PRIOR to earnings in August
Average Daily Volume = 1.0 million
New Positions: see below

Comments:
07/01/15: Our brand new play on NBIX is already open. The plan was to launch bullish positions at $48.15 but NBIX gapped open higher at $48.27 this morning. Shares if NBIX, like most of the market today, saw its early gains fail pretty quickly. NBIX faded back toward unchanged on the session.

At this point I would wait for a new rally past $48.25 or you could wait for a rally past today's high ($48.89).

Trade Description: June 30, 2015:
Biotech stocks remain one of the best performing groups in the market this year. Year to date the IBB is up +21% versus a +0.2% gain in the S&P 500 and a +5.3% gain in the NASDAQ composite. NBIX is outpacing its peers with a +113% gain in the first half of 2015.

NBIX is in the healthcare sector. According to the company, "Neurocrine Biosciences, Inc. discovers and develops innovative and life-changing pharmaceuticals, in diseases with high unmet medical needs, through its novel R&D platform, focused on neurological and endocrine based diseases and disorders. The Company's two lead late-stage clinical programs are elagolix, a gonadotropin-releasing hormone antagonist for women's health that is partnered with AbbVie Inc., and NBI-98854, a vesicular monoamine transporter 2 inhibitor for the treatment of movement disorders. Neurocrine intends to maintain certain commercial rights to its VMAT2 inhibitor for evolution into a fully-integrated pharmaceutical company."

I like to remind readers that biotech stocks can be tough to trade. Normally they are volatile with lots of headline risk. The right headline about a successful test or clinical trial or FDA approval can send shares soaring. The wrong headline could see a biotech stock crash or even gap down several points. Due to the nature of biotech work and how many smaller companies get paid with milestone payments as they develop treatments tends to make their earnings are very lumpy.

While we normally don't focus on earnings for the smaller biotech companies, I will point out that NBIX's most recent earnings report was much better than expected. Their 2014 Q1 results were a loss of ($0.17) per share. Analysts were expecting 2015 Q1 results to be a loss of ($0.30). NBIX reported a loss of ($0.01) per share. Revenues were $19.76 million for the first quarter. Management held a successful secondary offering last quarter and raised $270 million. This increased the company's cash and cash equivalents to $518 million. Hopefully investors won't have to worry about NBIX needing to raise capital any time soon.

After NBIX's Q1 results the stock was upgraded by two analysts. One raised their price target to $64. The other raised their price target to $69. Currently the point & figure chart is forecasting at $66 target.

Technically NBIX looks bullish following its breakout past resistance near $45.00. The recent pullback among the biotech stocks saw NBIX dip back toward this area, which is now support. Today's bounce looks like a potential entry point. Tonight we're suggesting a trigger to open bullish positions at $48.15.

- Suggested Positions -

Long NBIX stock @ $48.15

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

Long AUG $50 CALL (NBIX150821C50) entry $3.60

07/01/15 triggered on gap open at $48.27
Option Format: symbol-year-month-day-call-strike


PacWest Bancorp - PACW - close: 47.03 change: +0.27

Stop Loss: 46.40
Target(s): To Be Determined
Current Gain/Loss: -3.1%
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:
07/01/15: It was a relatively quiet day for PACW. The morning rally failed near its 10-dma. Shares settled with a +0.57% gain on the session.

I am not suggesting new positions at this time.

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


Spirit AeroSystems - SPR - close: 55.55 change: +0.44

Stop Loss: 53.75
Target(s): To Be Determined
Current Gain/Loss: -1.6%
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:
07/01/15: SPR managed to outpace the broader market with a +0.79% gain. I am suggesting caution here. The intraday chart shows SPR finding new short-term resistance at $55.70.

No new positions at this time.

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


Tempur Sealy Intl. - TPX - close: 67.60 change: +1.70

Stop Loss: 64.40
Target(s): To Be Determined
Current Gain/Loss: +7.0%
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:
07/01/15: TPX soared +2.5% and closed at new multi-year highs. I don't see any specific news behind today's display of relative strength.

I would not chase TPX here. No new positions at this time.

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


Wayfair Inc. - W - close: 37.98 change: +0.34

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

Comments:
07/01/15: Wayfair is inching closer and closer to a bullish breakout higher. I would be halfway tempted to go long the stock now. However, our plan is to use an entry trigger at $38.35.

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)

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




BEARISH Play Updates

Continental Resources, Inc. - CLR - close: 40.17 change: -2.22

Stop Loss: 44.85
Target(s): To Be Determined
Current Gain/Loss: +8.2%
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:
07/01/15: Energy stocks struggled after crude oil plunged to new relative lows. This morning the U.S. Energy Information Administration said crude oil inventories rose by 2.4 million barrels. It was the first rise in nine weeks. U.S. inventories remain near 80-year highs. This news helped push crude oil below $58 a barrel.

Shares of CLR dropped -5.2% to close on round-number support a $40.00. No new positions at this time.

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


Murphy Oil - MUR - close: 40.95 change: -0.62

Stop Loss: 43.05
Target(s): To Be Determined
Current Gain/Loss: +0.5%
Entry on July 01 at $41.15
Listed on June 29, 2015
Time Frame: Exit PRIOR to MUR earnings in very late July
Average Daily Volume = 1.9 million
New Positions: see below

Comments:
07/01/15: MUR, another energy stock, underperformed the broader market thanks to weakness in crude oil. MUR fell -1.49% and dropped to new multi-year lows. Our trigger to launch bearish positions was hit at $41.15.

Trade Description: June 29, 2015:
The crash in crude oil prices in the second half of 2014 was pivotal turning point for the U.S. energy industry. Suddenly the booming oil and gas sector had its future being question with the price of oil now unprofitable for many drillers. Oil has managed a bounce from its 2015 lows while many of the oil and gas producers are still seeing their stocks decline.

MUR is in the basic materials sector. According to the company, "Murphy Oil Corporation is an independent exploration and production company with a strong, oil-weighted portfolio of global offshore and onshore assets. Exploration activities are focused in four main regions: Deepwater Gulf of Mexico, the Atlantic Margin, Southeast Asia and Australia."

The company reduced its 2015 capex outlook by -33% when they reported their 2014 Q4 results back in January. MUR's Q1 results came out in May. Profits evaporated with MUR delivering a loss of ($1.11) per shares versus a profit of $0.96 a year ago.

Management is trying to prop up their floundering stock price. On May 20th the company announced an accelerated stock buy back program of $250 million. This is part of a previously announced $500 million repurchase program from August 2014. The buy back doesn't seem to be working.

Goldman Sachs downgraded MUR to a "sell" in late May. Nearly a month later UBS has also downgraded MUR to a "sell". The UBS analyst expressed concern that MUR's production would likely decline in 2015 and 2016 since the company has cut back on investment.

The stock's attempt at an oversold bounce failed near $44 a couple of weeks ago and now shares are breaking down to new multi-year lows. The point & figure chart is bearish and forecasting at $34.00 target. Tonight we are suggesting a trigger to open bearish positions at $41.15.

- Suggested Positions -

Short MUR stock @ $41.15

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

Long AUG $40 PUT (MUR150821P40) entry $1.30

07/01/15 triggered @ $41.15
Option Format: symbol-year-month-day-call-strike


On Deck Capital - ONDK - close: 11.39 change: -0.19

Stop Loss: 12.45
Target(s): To Be Determined
Current Gain/Loss: +20.6%
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:
07/01/15: ONDK continued to sink and fell another -1.6%. More conservative traders may want to move their stop closer to $12.00, which should be new resistance.

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

06/29/15 new stop @ $12.45
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