Editor's Note: Good Evening. We experienced a technical glitch in last night's newsletter that was emailed. The error prevented our new short plays in Macy's (M) and Whirlpool (WHR) from being sent in the emailed newsletter. Neither of the stock's hit our trigger to enter short positions so they have officially not been opened. These new plays are now listed in tonight's play updates. I anticipate a bounce in both stocks and have adjusted the parameters of the plays and suggest we take advantage it. The Option Investor staff apologizes for the error.

We have had a good week and have booked several gains. I am expecting a relief rally tomorrow and possibly into Monday. I can not predict the extent of the rally but I do believe it will be short lived. We have two long positions to take advantage of any bounce and I am confident our targets will be achieved soon. I suggest readers be prepared to protect profits as these targets approach. I provided a couple of stocks on my watch list in the new plays section tonight. My bias is to the short side but ideally I would like to see a bounce prior to a bigger decline that I think will start next week. I doubt any events tomorrow will change my view so I plan to have several short candidates released this weekend. Please email me with any questions.

Current Portfolio:


BULLISH Play Updates

Cisco Systems - CSCO - close 22.57 change -0.29 stop 22.20

Target(s): 23.35, 23.65, 23.85, 24.20
Key Support/Resistance Areas: 23.65, 22.55, 22.35
Current Gain/Loss: -1.23%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
CSCO found support at $22.50 today which is near our key support level at $22.55. The stock also has support at $22.35 which were CSCO's February lows. We are playing for a bounce in the stock within the base it has built over the past month. This could be a quick trade and I suggest readers take profits if CSCO bounces as I anticipate. In light of today's pullback I have adjusted the targets and am listing a lower target of $23.35. If CSCO hits this first target we should make about 35 cents on the option position for a +21% gain. This isn't exactly what I expected when opening the position but we have to stay nimble and adjust to what the market gives us. If CSCO breaks out of the base it could rally to fill a gap which is up near our most aggressive target at $24.20 and below the stock's 200-day SMA. The overall strength or weakness in the broader market is likely to determine how far CSCO will bounce from here. NOTE: I view this trade as potentially being quick.

Current Position: Long CSCO stock at $22.85

Option Traders:
Suggested Position: Buy August $22.00 CALL

Entry on June xx
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 69 million
Listed on 6/16/10


Hanson Natural Corp - HANS - close 39.65 change +0.45 stop 38.25

Target(s): 40.20, 40.70, 42.40, 43.25
Key Support/Resistance Areas: 42.50, 41.00, 40.25, 39.30, 38.50
Current Gain/Loss: +0.58% Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
HANS printed a bullish engulfing candlestick today and closed +1.15% higher, despite the significant weakness in the broader market. The market should bounce soon, if not tomorrow, and this should bode well for HANS. The stock was turned back from its 50-day SMA today for the second time in the last 4 trading sessions. If it keeps knocking it should break through, and with the broader market in oversold conditions itching for a bounce, I expect this to happen and our targets to be hit. The 20-day and 200-day SMA are also providing support for the stock.

Current Position: Long HANS stock at $39.42

Options Traders:
Suggested Position: August $40.00 CALLS

Entry on June 23, 2010
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on 6/22/10


BEARISH Play Updates

Macy's - M - close 18.85 change -1.24 stop 21.70

Target(s): 18.90, 18.10
Key Support/Resistance Areas: 22.25, 21.25, 20.90, 20.25, 19.40, 18.00
Time Frame: 1 to 2 weeks

Comments:
M collapsed today closing -6% lower and near our 2nd target of $18.90. I still believe the stock will trade down to $18.10 but I do not suggest chasing it at these levels. The broader market should bounce from here and I suspect M will as well. But these bounces should be short lived and I suggest we take advantage them. As such, I have adjusted the entry trigger to $19.65 and the suggested option position. I'll leave my comments from the play release. M broke down on 6/23 out of a descending triangle but was saved with a rally. The stock is hanging on to a thread and I do not see any reason why the stock will not continue its descent. The broader market may bounce higher but there is plenty of resistance overhead to keep M in check. I suggest we use $20.25 (adjusted now to $19.65) as a trigger to enter short positions. M should easily trade down to its 200-day SMA (currently at $19.38) which is below our first target of $19.45. This area may provide some support but if the selling picks up the next level of meaningful support is all the down near $18.00 which are highs from December. I am going to place a wide initial stop at $21.70 to account for volatility and will adjust it once we are in the position.

Suggested Position: Short M stock if it trades up to $19.65

Option Traders: Buy August $20.00 PUTS, current ask $2.17, estimated ask at entry $1.70

Annotated chart:

Entry on June xx
Earnings 8/12/2010 (unconfirmed)
Average Daily Volume: 11.7 million
Listed on June 23, 2010


Whirlpool Corp - WHR - close 94.29 change -3.42 stop 105.50

Target(s): 95.10, 91.50, 86.05
Key Support/Resistance Areas: To Follow
Time Frame: 1 to 2 weeks

Comments:
WHR ran away from us today and closed below our first target of $95.10. I still believe WHR has a good chance to trade down to $91.50 and eventually $86.05 but I do not suggest chasing it at these levels. The broader market should bounce from here and I suspect WHR will as well. But these bounces should be short lived and I suggest we take advantage them. I have lowered our entry to short positions to $97.50. My comments from the play release remain the same. WHR has been making lower highs and has broken many trend lines. The stock has one more trend line providing support from the July lows to the February lows. However, I think it only a matter of time before this is broken and the stock retests or breaks its recent lows near $91.50. WHR is also below its 20-day and 50-day SMA's and I think there is enough overhead resistance to enter short positions $98.80 (adjusted now to $97.50) which is below today's highs and the 20-day SMA. I am going to place a wide initial stop at $105.50 to account for volatility and will adjust it once we are in the position.

Suggested Position: Short WHR stock if it trades up to $97.50

Option Traders: Buy August $95.00 PUTS current ask $8.20, estimated ask at entry $6.60

Annotated chart:

Entry on June xx
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 2 million
Listed on June 23, 2010