Editor's Note: Good Evening. The SP-500 closed above its 200-day SMA today, but not by much. The major indexes have plenty of resistance above including the 100-day and 50-day SMA's. Volume has been light and I am having a hard time trusting this rally. Most of the economic news from today wasn't good but the market rallied in spite of it. It appeared to me that shorts were getting squeezed and when this stops we may turn right back down. Nonetheless, we have to deal with the conditions that our dealt to us and the recent spike through the 200-day SMA was enough to hit our stops in IWM and BNS. One sector that I am interested in is energy. We are waiting to be triggered in our long NOG trade which is in the space and I expect a nice profit.

My strategy in the coming days is to build more short positions, especially if the markets continue to melt-up. I will also continue to look for strategic long plays so that we are hedged and can participate on any further upside. I also want to reiterate that if you can not trade intraday the conditions remain difficult to manage swing trades. The markets are moving fast and furious in both directions and trying to pinpoint entries and exits without being able adjust them intraday is difficult.

Current Portfolio:


BULLISH Play Updates

Direct TV - DTV - close 39.25 change -0.68 stop 35.70

Target(s): 38.20, 38.50, 39.50, 41.50
Key Support/Resistance Areas: 38.60, 37.00, 36.30
Current Gain/Loss: N/A
Time Frame: Several weeks
New Positions: Waiting to be triggered

Comments:
DTV has ran away from us a bit here as we have waited 7 trading days and still haven't gotten filled. $37.20 is a key support area and the 50-day SMA is rising towards this level everyday. Let's use this as our trigger to enter positions. Essentially we are playing for a bounce near the stock's 50-day SMA which it has not touched since the flash crash. The stock also has two trend lines underneath our entry which should provide further support if we get filled. The 50-day SMA is currently $36.87 and it is rising but placing an order slightly above this is suggested.

Suggested Position: Long DTV stock if it trades down near $37.20, which is just above its 50-day SMA

Option Traders:
Suggested Position: Buy July $37.00 CALL, current ask $2.74, estimated ask at entry $1.40

Entry on June xx
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 12.3 million
Listed on 6/5/10


Northern Oil & Gas - NOG - close 14.13 change +0.12 stop 13.05

Target(s): 14.90
Key Support/Resistance Areas: 15.00, 13.60, 13.15
Time Frame: 1 to 2 weeks

Comments:
We are waiting for our trigger to enter long positions at $13.80. The stock's 20-day SMA (currently $13.62) is starting to turn up and I expect this to hold if we get filled. This area is also near the upward trend line that has formed with the lows from 5/25 and 6/8. Our trigger to enter could get hit early tomorrow but if the stock gaps close to or below our entry I suggest waiting to enter the position until the opening range is broken to the upside. This will ensure the position is moving in the right direction prior to going long. My comments from the play release remain the same. NOG has broken a recent downtrend line and looks like it is trying to form a higher low that would be confirmed if the stock trades above its recent highs. The stock also has solid support at $13.60 which is a prior resistance area from early 2010 and also near the 20-day SMA. NOG has taken back its 20-day SMA and I believe a trip up to 50-day SMA will follow in short order. I would like to see a retracement of some the gains late last week and use a trigger to enter bullish positions if NOG trades down near $13.80 which is just above Friday's low. I expect NOG to at least retest its June 3rd high which is above our target of $14.90 (adjusted down 5 cents) and below the 50-day SMA. If the trade plays out how we expect the gain will be +8%. We are risking 75 cents to make $1.10. NOTE: I consider this a volatile stock and industry so please use proper position size to limit risk.

Suggested Position: Long NOG stock if it trades down near $13.80

Option Traders:
Suggested Position: Buy July $12.50 CALL, current ask $2.25, estimated ask at entry $2.05

Entry on June xx
Earnings Date 8/13/10 (unconfirmed)
Average Daily Volume: 19.6 million
Listed on 6/8/10


CLOSED BULLISH PLAYS

Quest Software - QSFT - close 19.60 change +0.36 stop 18.58

Target(s): 19.50, 20.00, 20.50, 21.00
Key Support/Resistance Areas: 18.40, 18.70, 19.36, 19.60, 20-day SMA, 50-day SMA
Current Gain/Loss: +2.84%
Time Frame: Several weeks
New Positions: Closed 6/14/10

Comments:
QSFT opened yesterday at $19.54 which was above our target so we are flat at the position at $19.54 for +2.84% gain. The stock regained most of the losses from yesterday afternoon's sell-off but never took out the highs from yesterday. This would concern me if I was long the stock. There is resistance at $19.60 to $19.65 and there is a big head and shoulders pattern on the daily and hourly chart. This suggests a move lower from here but the broader market strength or weakness will probably determine the fate of the stock.

Closed Position: Long QSFT stock at $19.54, entry was at $19.00

Annotated chart:

Entry on June 7, 2010
Earnings Date 8/10/10 (unconfirmed)
Average Daily Volume: 1.9 million
Listed on 6/2/10


CLOSED BEARISH PLAYS

Bank of Nova Scotia Halifax - BNS - close 49.98 change +1.52 stop 49.55

Target(s): 46.30, 45.15, 44.05, 42.50
Key Support/Resistance Areas: 49.00, 48.30, 48.00, 47.40, 46.30, 45.00
Current Gain/Loss: -4.10%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
BNS found our stop so we are flat on the positions for a -4.10% loss. The stock closed above its 50-day SMA and has broken the downtrend line that was one of the reasons for initiating a short play. If readers still have positions there is resistance up to $50.75 but anything above this probably means BNS will test its 52-week highs near $52.50.

Closed Position: Short BNS stock at $49.55, entry was at $47.60

Annotated chart:

Entry on June 9, 2010
Earnings 8/26/2010 (unconfirmed)
Average Daily Volume: 685,000
Listed on June 8, 2010


iShares Russell 2000 - IWM - close 66.99 change +1.64 stop 66.60

Target(s): 62.10, 60.75, 59.50, 58.75
Key Support/Resistance Areas: 64.50, 63.30, 62.60, 61.50, 60.70, 58.00
Current Gain/Loss: -3.66%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
IWM found our stop at $66.60 so we flat on the position for -3.66% loss. It appears the indexes, including IWM, want to go test their 50-day SMA's from below. IWM's 50-day SMA is almost 2 points higher and just below $68.61. If this in fact happens it may set-up another shorting opportunity. For now, we need to step aside as risk appetite is back as evidenced by the +10% rally in IWM since its lows last Tuesday, just one week ago. For readers who may still have positions there is additional resistance in $67.50 to $68.80 area (see shading on chart) and the 50-day SMA. I would not be surprised to see IWM turn back to test its 20-day SMA near $65.00 prior to trying to bust through the aforementioned resistance. NOTE: After IWM was opened on Friday I adjusted the stop to $65.75 in the weekend play updates but failed to update the portfolio snapshot. For record keeping purposes we are flat at the higher stop of $66.60. I apologize for the error.

Closed Position: Short IWM stock at $66.60, entry was at $64.25

Annotated chart:

Entry on June 11, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 101 million
Listed on June 9, 2010