Editor's Note:

Good evening traders. The "sell the news" event after Intel earnings I mentioned in my updates last night didn't exactly happen this time around as the rally was stoked by stellar results from CSX and JP Morgan. JP Morgan's earnings were so good this morning that it may be setting other banks up for an earnings disappointment. Any sort of earnings miss by the banks in the coming days/weeks could get a market correction going. This could be the "excuse" traders are looking for to take profits off the table and could spark some selling. Whether this happens or not will soon play out but we have positions that will benefit from a decline.

Current Portfolio:


BULLISH Play Updates

AU Optronics - AUO - close: 11.50 change: +0.10 stop: 10.90

AUO closed on its 20-day moving average today. The stock needs to get above a resistance area at $11.60 which I think would get the stock moving toward the $12.00 area fast. I am still cautious of a broader market sell-off and suggest conservative traders tighten stops. Officially we are keeping our stop at $10.90 but a logical higher stop could be placed at $11.10 which is just below AUO's 50-day SMA and recent support. This is about 2% higher than our official stop. Aggressive traders may still consider positions as I believe there is a lot of support with the SMA's and support just below. Note: I consider this an aggressive trade and recommend small position size to limit risk.

Current Position: AUO stock @ 11.77

Entry on April 05 at $11.77
Earnings Date 04/22/10 (unconfirmed)
Average Daily Volume: 2.5 million
Listed on April 3rd, 2010


BorgWarner Inc. - BWA - close: 39.04 change: +0.15 stop: 37.95

My comments on BWA remain the same. The stock continues to melt-up and looks bullish; however, I am viewing this trade as an aggressive trade at this point. If the overall market rallies it should work just fine, however, I don't want the stock to trigger our entry and then reverse. Officially our trigger to open positions is at $40.25. If triggered our target is $44.75. I am moving our stop loss up to $37.95 to limit our risk in the trade if we get triggered. Aggressive traders may consider opening positions if BWA stays above $38.40 but I would view this as a quick trade with a tight stop. The Point & Figure chart looks very bullish and is forecasting a long-term $55 target.

Trigger to open bullish positions $40.25

Suggested Position: BWA stock @ 40.25 (unopened)

Option Traders:
Suggested Position: Buy CALL May $40.00 (BWA 10E40.00) current ask $1.10

Entry on April xx at $xx.xx
Earnings Date 04/29/10 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on April 3rd, 2010


Cash America - CSH - close: 41.28 change: +0.80 stop: 38.99

CSH closed higher +1.98% today and looks poised to break out higher. There is support at the $41.00 level which is about break-even for our trade. We are looking for the stock to at least retest its highs from last week at $41.50. If the stock trades to this level conservative traders should begin to tighten stops or sell into strength. We need to see CSH follow through or we will be looking exit our position. I am not suggesting new positions at this time. Our target on CSH is $42.90.

Current Position: CSH stock at $41.05

Entry on April 06 at $41.05
Earnings Date 04/22/10 (unconfirmed)
Average Daily Volume: 263 thousand
Listed on April 5th, 2010


MAXIMUS Inc. - MMS - close: 62.60 change: +0.27 stop: 59.75

MMS keeps on going and tacked on another +1.34% today. The stock looks poised to continue breaking out. This is another new all time high for MMS so I am suggesting readers be careful. I would like to place a stop at $59.75 to give this some room but if there is overall market weakness readers may want to exit the position early. Our target on MMS is $64.75. This has nothing to do with the relative strength in the stock but more to do with managing an overbought market and being nimble. I want to remind traders that this is a somewhat aggressive trade since we normally do not trade stocks with average volume under 250K a day.

Current Position: MMS stock at $62.25

Entry on April 9 at $62.25
Earnings Date 05/06/10 (unconfirmed)
Average Daily Volume: 83 thousand
Listed on March 31st, 2010


Medicis Pharmaceutical Corp. – MRX – close: $25.00 change +0.49 stop: $23.45

We bought MRX at the open today for $25.00. MRX bounced off of the support we mentioned in the new plays last night. The stock has been finding support at $24.75 level for the past couple of weeks, which is also just above prior resistance from October 2009. The stock's 50-day and 100-day SMA's are just below current levels and there is also upward trend line support. Our first target is $26.50 and our second target is $27.75, which is just below its 52-week high. Our stop is $23.45 which is near a prior resistance level and also below the aforementioned SMA's.

Current Position: MRX stock @ $25.00

Entry on April xx at $xx.xx
Earnings Date 5/06/2010 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on April 13th, 2010


Patterson Companies - PDCO - close: 31.82 change: +0.59 stop: 29.95

PDCO finally broke through resistance and hit our trigger at $31.50 and followed through. We are now long PDCO stock. Our stop of $29.95 is below PDCO's 50-day SMA as well below a prior support and resistance level from early March and late February, respectively. Our stop is $29.95 and target is $34.50.

Current Position: PDCO stock at $31.50

Entry on April 14th at $31.50
Earnings Date 05/17/10 (unconfirmed)
Average Daily Volume: 975 thousand
Listed on April 6th, 2010


Powershares UltraShort Real Estate - SRS - close: 5.34 change: -0.28 stop: 4.95

SRS quickly traded down to our new entry this morning and we are now long SRS. We are using a fairly tight stop at $4.95 and will be right out of the trade if this doesn't work. Our first target is $6.10 which is just below the highs from March 22. Our 2nd target is $6.85 which is prior support from December. And our third more aggressive target is $7.15 which is just below the low on January 19. Aggressive traders can consider positions at current levels.

I want to remind readers that I consider this is a very aggressive play so please use smaller position size to limit risk. *NOTE: Although this is listed as a long position in our portfolio, this is a bearish position on real estate stocks.*

Current Position: Long SRS @ $5.25

Entry on April 14th, 2010
Earnings Date Not Applicable
Average Daily Volume: 11.0 million
Listed on April 8, 2010


BEARISH Play Updates

Powershares QQQQ Trust - QQQQ - close: 49.91 change: +0.59 stop: 50.95

On the heels of Intel's earnings, QQQQ closed higher by +1.20% and the trade is not working in our favor. I must admit that I did not think the index would rally up to this level prior to correcting, obviously. However, I am sticking with the set-up as QQQQ is still below highs last seen in May 2008 and July 2007. We need QQQQ to trade below $48.86 to get this trade going on our direction. QQQQ moving averages will also provide support if it sells off. Our target remains $47.00 which is just above the lows from March 15. Our stop is $50.95. Traders that have not entered positions could do so now and be rewarded nicely if the trade works.

Current Position: Short QQQQ at $49.05, Stop Loss $50.95

Option Traders:
Suggested Position: Buy PUT May $49.00, Ask at entry, $1.00

Entry on April 12th, 2010
Earnings Date Not Applicable
Average Daily Volume: 49.4 million
Listed on April 10, 2010


CLOSED BEARISH PLAYS

Warner Chilcott - WCRX - close: 26.83 change: +1.15 stop: 26.26

WCRX gapped up this morning and never looked back closing higher by +4.48%. Our short set-up did not get triggered and we are dropping the trade as WCRX looks poised to continue higher. WCRX is approaching a downtrend line that began in January near the $27.50 level. We may be consider this short set-up down the road with a stop at $28.50.

Suggested Position: Dropped

Annotated chart:

Entry on March xx at $xx.xx
Earnings Date 05/11/10 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on March 29th, 2010