Editor's Note:

Good evening traders. Google's earnings didn't impress anyone today after the bell and the stock is under pressure. We'll see if this drags the NASDAQ down tomorrow and helps our short QQQQ trade. SRS also followed through nicely, albeit I was confused this morning on the heels of a 1:5 reverse stock split which is explained in the play update.

Over the past year there have been fairly decent sell-offs after options expiry on more than one occasion. I'm not saying this will happen again but I believe the conditions are ripe. If we get a rally tomorrow I would seriously consider selling positions into strength to preserve capital and lock in any profits.

Current Portfolio:


BULLISH Play Updates

AU Optronics - AUO - close: 11.38 change: -0.12 stop: 10.90

AUO is playing moving average ping pong between its 20-day, 50-day, and 100-day SMA's. The stock is coiling and 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

BWA is exhibiting bullish action (shocker) but I don't know if it will trade above our trigger before retreating. Our comments remain the same as we wait to get triggered. 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: 41.68 change: +0.40 stop: 40.59 *NEW*

CSH closed higher +0.97% today and is experiencing overhead trend line resistance. There is support that came in today at the $40.80. I would like to move our stop up to $40.59 to limit risk in this trade in case the market sells-off tomorrow. CSH made new highs today and surpassed $41.50. I suggest conservative traders tighten stops or sell into strength to lock in any gains. We need to see CSH follow through or we will be looking exit our position if our new stop is hit. 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: 64.15 change: +0.71 stop: 59.75

MMS surged higher again today closing +1.12%. This is another new all time high for MMS so I urge readers to be careful. We are up +3% in the trade right now. Our target on MMS of $64.75 was almost hit today as the stock reached a high of $64.53 before backing off. As such, I am recommending we exit this position at the open tomorrow and take our profits. The rally is a little long in the tooth and getting greedy here is not the right thing to do. Aggressive traders could stay in the position with a tight stop at $63.60. 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: $25.60 change +0.16 stop: $23.45

MRX peaked its head above its 20-day SMA before retreating, but still managed to gain +0.63%. The stock has support at the $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. We will probably be looking to move this stop next week as the 50-day SMA continues to rise.

Current Position: MRX stock @ $25.00

Entry on April 14 at $25.00
Earnings Date 5/06/2010 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on April 13th, 2010


Patterson Companies - PDCO - close: 31.81 change: -0.01 stop: 29.95

PDCO found support today right at our entry price of $31.50 and closed $0.31 higher. If PDCO happens to surge tomorrow traders may want to consider exiting for a quick gain. Otherwise, our stop remains at $29.95 which is below PDCO's 50-day SMA as well below a prior support and resistance level from early March and late February, respectively. Our 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: 27.99 change: +1.34 stop: 26.50 *NEW*

I couldn't figure out what was going on when I looked at my SRS position this morning. I quickly realized that ProShares initiated a 1:5 reverse split and then it started to make sense. However, my charting system did not reflect the split and it was difficult to make sense of what was going on. Here are the results. SRS closed yesterday at $5.33 and at the start of today for every 5 shares you owned at $5.33 you now had one at $26.65 (or $5.33 x 5). The value of your shares did not change. That is until the real estate stocks started tanking which enable our SRS position to tack on almost a +5% gain. I will provide a new chart this weekend. But for now our first target is $28.90 which is just below SRS's 20-day SMA. Our second target is $30.20 which near the late March highs. Our stop is $26.50 which will ensure us of a small winning trade if SRS reverses. If a broader market correction gets going this play has a lot of potential but must be managed properly to protect profits. Aggressive traders can consider initiating new positions on any pullback with a tight stop in place.

I want to remind readers that I consider this a very aggressive trade 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. We are long and bullish on SRS.*

Current Position: Long SRS @ $26.25

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: 50.13 change: +0.22 stop: 50.95

QQQQ surged higher again today but Google earnings after the bell didn't impress anyone and the stock is under pressure. This should help our short QQQQ position tomorrow. I am sticking to the set-up but we need QQQQ to trade back below $49.50 to get things rolling in 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