Editor's Note:
The financial sector managed to bounce but gains were limited. I wouldn't get too excited yet. The banking indices pared their gains to close almost unchanged. Our bullish plays on COF and DFS were exceptions and both outperformed on Monday. The rest of the market looks vulnerable to more selling pressure.

-James

Current Portfolio:


BULLISH Play Updates

Autodesk Inc. - ADSK - close: 44.39 change: -1.18

Stop Loss: 42.75
Target(s): 48.50
Current Gain/Loss: + 0.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/16 update: We only have two days left on this trade and ADSK just erased most of our gains with a -2.5% decline. More conservative traders may want to exit immediately or up their stops closer to $44 instead.. I am not suggesting new positions at this time.

Current Position: Long ADSK stock @ $44.25

- or -

Long the May $45 calls (ADSK1121E45) Entry @ $1.19

05/10 New stop loss @ 42.75

Entry on May 3 at $44.25
Earnings Date 05/19/11 (confirmed)
Average Daily Volume: 2.1 million
Listed on April 23rd, 2011


Arrow Electronics, Inc. - ARW - close: 44.87 change: -0.99

Stop Loss: 43.90
Target(s): 49.90
Current Gain/Loss: - 3.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/16 update: ARW gave up -2.1% and closed under the $45.00 level. Readers may want to wait for a bounce from the $45 level before initiating new positions. Our target is $49.90. FYI: The Point & Figure chart for ARW is bullish with an $81 target.

Current Position: long ARW stock @ $46.30

- or -

long the June $47.50 call (ARW1118F47.5) Entry @ $1.20

Entry on May 11 at $46.30
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on May 10th, 2011


Capital One Financial - COF - close: 53.48 change: +1.14

Stop Loss: 50.85
Target(s): 57.00, 59.50
Current Gain/Loss: + 0.7%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
05/16 update: I was about ready to give up on COF but financials outperformed on Monday. Shares of COF rallied from its 50-dma and produced a bullish engulfing candlestick pattern with today's gain. More aggressive traders might want to launch new positions now. Or you can wait for a rally past short-term resistance near $54.00.

Current Position: Long COF stock @ $53.07

- or -

Long the June $55 calls (COF1118F55) Entry @ $0.96

Entry on May 5 at $53.07
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 3.7 million
Listed on May 4th, 2011


Discover Financial Services - DFS - close: 25.07 change: +0.83

Stop Loss: 23.40
Target(s): 27.25
Current Gain/Loss: + 4.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/16 update: DFS displayed relative strength today with a +3.4% rally to new multi-year highs. Fueling the move was improving credit card numbers. DFS said charge offs and delinquencies were improving. The stock's big bounce today was fueled by strong volume. I am not suggesting new positions at this time.

(Small Positions)

Current Position: long DFS stock @ $24.10

- or -

Long the May $24 calls (DFS1121E24) Entry @

05/04 Triggered at $24.10.
04/30 Added an alternative entry point @ $25.25
04/26 New trigger @ 24.10, New stop loss @ 23.40

Entry on May 4 at $24.10
Earnings Date 06/23/11 (unconfirmed)
Average Daily Volume: 5.9 million
Listed on April 12th, 2011


Dr. Pepper Snapple Group - DPS - close: 41.86 change: +0.08

Stop Loss: 37.90
Target(s): 44.90
Current Gain/Loss: unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see trigger

Comments:
05/16 update: Monday proved to be a quiet day for DPS. Shares consolidated sideways in a narrow range. I am suggesting a buy-the-dip trigger to open bullish positions at $40.25. If triggered we'll use a stop loss at $37.90. Our target is $44.90.

buy-the-dip Trigger @ $40.25

Suggested Position: buy DPS stock @ $40.25

- or -

Buy the August $45 call (DPS1120H45) current ask $0.80

Entry on May x at $xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 2.1 million
Listed on May 14th, 2011


EMC Corp. - EMC - close: 27.42 change: -0.18

Stop Loss: 26.45
Target(s): 29.95, 32.25
Current Gain/Loss: - 0.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/16 update: EMC held up reasonably well considering that tech stocks were some of the worst performers on Monday. Look for another dip near $27.00 and the 50-dma as a potential entry point. EMC has resistance at $28.75 but we're listing our targets at $29.95 and $32.25.

Current Position: Long EMC stock @ $27.55

- or -

Long the June $27.00 calls (EMC1118F27) Entry @ $1.35

Second Option Position (listed 05/12/11)

Long the June $29.00 calls (EMC1118F29) Entry @ $0.45

05/12 New entry point. Added second option position.

Entry on May 3 at $27.55
Earnings Date 04/20/11
Average Daily Volume: 21.4 million
Listed on April 27th, 2011


Gilead Sciences Inc. - GILD - close: 40.56 change: -0.64

Stop Loss: 39.75
Target(s): 44.75
Current Gain/Loss: - 1.9%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
05/16 update: GILD retreated to the bottom of its recent range with today's -1.5% decline. Readers may want to wait for a bounce from current levels or the $40.00 mark before considering new bullish positions. FYI: The Point & Figure chart for GILD is bullish with a $57 target.

Current Position: Long GILD stock @ $41.38

- or -

Long the June $41 calls (GILD1118F41) Entry @ $1.44

Entry on May 13 at $41.38
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume: 10.9 million
Listed on May 12th, 2011


Ingersoll-Rand - IR - close: 49.73 change: -0.39

Stop Loss: 48.75
Target(s): 54.75
Current Gain/Loss: - 0.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/16 update: I am cautious on IR. The morning rally failed near $50.50. If the stock market continues to sink there is a very good chance that IR will breakdown under $49.00 and hit our stop loss. I am not suggesting new positions at this time. Our target is $54.75.

Current Position: long IR stock @ $50.12

- or -

Long the June $50 call (IR1118F50) Entry @ $1.80

Entry on May 9 at $50.12
Earnings Date 07/22/11 (unconfirmed)
Average Daily Volume: 2.6 million
Listed on May 7th, 2011


KLA-Tencor - KLAC - close: 43.48 change: -0.95

Stop Loss: 43.95
Target(s): 49.85
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/16 update: If KLAC doesn't bounce soon I'm going to give up on it as a bullish candidate. Nimble traders may want to consider bearish positions on a drop under $43.00 (I'd target a move toward $40 or the 200-dma). For the moment our bullish trade has a trigger to open positions at $46.25.

Trigger @ 46.25

Suggested Position: buy KLAC stock @ 46.25

- or -

buy the June $47.00 calls (KLAC1118F47) current ask $1.65

Entry on May x at $xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 653 thousand
Listed on May 9th, 2011


Oracle Corp. - ORCL - close: 34.18 change: -1.01

Stop Loss: 33.95
Target(s): 38.00
Current Gain/Loss: - 1.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/16 update: Whoa! ORCL was a big underperformer today with a -2.8% loss. Technology stocks were hit hard in another day of "risk off" for traders. ORCL has broken down from its recent consolidation, which now looks like a small bear flag pattern. ORCLY stalled at support near $34.00 and its 40-dma. Any further declines will stop us out at $33.95.

Current Position: Long ORCL stock @ $34.70

- or -

Long the June $35 call (ORCL1118F35) Entry @ $0.98

05/10 New stop loss @ 33.95

Entry on April 25 at $34.70
Earnings Date 06/23/11 (unconfirmed)
Average Daily Volume: 25.1 million
Listed on April 23rd, 2011


Riverbed Technology, Inc. - RVBD - close: 36.87 change: -0.55

Stop Loss: 34.95
Target(s): 39.90, 43.00
Current Gain/Loss: - 1.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/16 update: RVBD displayed some volatility this morning but the intraday rally failed near last week's highs and the stock reversed. I am expecting a pullback into the $36-35 zone. Let's wait for a bounce before considering new positions.

Current Position: Long RVBD stock @ $37.25

- or -

Long the June $40 call (RVBD1118F40) Entry @ $1.15

Entry on May 12 at $37.25
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 5.1 million
Listed on May 11th, 2011


SAIC, Inc. - SAI - close: 17.32 change: -0.08

Stop Loss: 16.95
Target(s): 18.40
Current Gain/Loss: - 0.0%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
05/16 update: There is no change from my prior comments on SAI. The stock is churning inside the $17.20-17.60 range. I am not suggesting new positions at this time.

Current Position: long SAI stock @ $17.33

- or -

Long the August $18.00 call (SAI1120H18) entry @ $0.55

04/30 Warning, SAI has produced a reversal. consider an early exit
04/27 New stop loss @ 16.95

Entry on April 6 at $17.33
Earnings Date 06/02/11 (unconfirmed)
Average Daily Volume: 2.4 million
Listed on April 5th, 2011


Semiconductor HOLDRs - SMH - close: 36.13 change: -0.35

Stop Loss: 35.49
Target(s): 39.95
Current Gain/Loss: unopened
Time Frame: 8 to 12 weeks
New Positions: Yes, see trigger

Comments:
05/16 update: The SMH is trending toward the bottom of its trading range. Currently we're waiting for a breakout past resistance at $37.00. Our trigger to open positions is at $37.05. If the market's sell-off continues I might reconsider buying a dip near the 50-dma.

The SMH doesn't move very fast so it could take several weeks for this play to work out. Our first target is $39.95. The Point & Figure chart for SMH is bullish with a $61 target.

FYI: The top ten components in the SMH are: TXN, INTC, AMAT, ALTR, ADI, LLTC, XLNX, KLAC, BRCM, and ATML.

Trigger @ 37.05

Suggested Position: buy the SMH @ $37.05

- or -

Buy the August $40 calls (SMH1120H40) current ask $0.61

Entry on May x at $xx.xx
Earnings Date --/--/--
Average Daily Volume: 9.8 million
Listed on May 12th, 2011


DENTSPLY Intl. - XRAY - close: 39.16 change: +0.48

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: + 0.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/16 update: XRAY is showing relative strength and closed at a new relative high. The rally is encouraging but I would hesitate to launch positions with the stock market's major averages slipping lower. Our profit targets are $42.00 and $44.50. FYI: The Point & Figure chart for XRAY is bullish with a $59 target.

NOTE: Readers may want to avoid the options. XRAY doesn't have a lot of option volume and the spreads are wide, which puts traders at a disadvantage.

Current Position: Long XRAY stock @ 39.00

- or -

Long the June $40 call (XRAY1118F40) Entry @ 0.60

Entry on May 12 at $39.00
Earnings Date 07/25/11 (unconfirmed)
Average Daily Volume: 904 thousand
Listed on May 7th, 2011


BEARISH Play Updates

Raytheon Co. - RTN - close: 49.07 change: -0.12

Stop Loss: 50.15
Target(s): 45.25
Current Gain/Loss: - 0.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/16 update: There is no change from my prior comments on RTN. The stock is consolidating sideways above short-term support at $49.00. I am not suggesting new bearish positions due to lack of movement.

Small Positions

Current Position: Short RTN stock @ $48.68

- or -

Long the May $47.00 PUTs (RTN1121Q47) Entry @ $0.28

Entry on May 2 at $48.68
Earnings Date 04/28/11
Average Daily Volume: 2.6 million
Listed on April 30th, 2011


Valero Energy - VLO - close: 26.23 change: -0.40

Stop Loss: 27.05
Target(s): 23.00
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
05/16 update: The early morning bounce in VLO failed near $27 and its converging 10-dma and 100-dma. More aggressive traders may want to open bearish positions now. I am suggesting a trigger to open bearish positions at $25.49. If triggered we'll use a stop at $27.05 and target a drop to $23.00 near the 200-dma. However, while we wait for VLO to hit our trigger at $25.49 I am watching for another failed rally type of move. If we see VLO bounce and reverse near $28 and its 50-dma then we'll probably switch our entry point, short the failure at resistance and adjust our stop.

Trigger @ $25.49

Suggested Position: Short VLO stock @ $25.49

- or -

buy the June $25 PUT (VLO1118R25) current ask $0.70

Entry on May x at $xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume: 11 million
Listed on May 14th, 2011