Editor's Note:
I am suggesting an early exit in GILD and RTN. Meanwhile the credit card names continue to rally and EXPE posted another strong gain.

-James

Current Portfolio:


BULLISH Play Updates

Capital One Financial - COF - close: 56.21 change: +0.89

Stop Loss: 51.75
Target(s): 57.00, 59.50
Current Gain/Loss: + 5.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/19 update: COF continues to rally. The stock is up four days in a row and just closed at new two-year highs with a rise above the late April peak. Shares are starting to look a little bit overbought but another rally tomorrow and COF might hit our first target at $57.00. Readers may want to take profits on the options early since the bid is currently at $2.14 (+122%). I am not suggesting new positions at current levels.

Current Position: Long COF stock @ $53.07

- or -

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

05/17 New stop loss @ 51.75

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


Covidien Plc. - COV - close: 57.48 change: +0.08

Stop Loss: 55.40
Target(s): 63.50
Current Gain/Loss: + 0.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: COV opened at $57.34 and was kind enough to offer us an entry point near $57.00 with a dip this morning. Shares eventually recovered to close back in positive territory. I would still consider new positions now. The $60 level might offer some resistance but I'm setting our target at $63.50.

Current Position: Long COV stock @ $57.34

- or -

Long the July $60 call (COV1116G60) Entry @ $0.65

Entry on May 19 at $57.34
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on May 18th, 2011


Discover Financial Services - DFS - close: 25.68 change: +0.35

Stop Loss: 23.90
Target(s): 27.25
Current Gain/Loss: + 6.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: DFS extended its gains to set new three-year highs. It was our plan to exit our May $24 calls tonight at the closing bell. I am not suggesting new positions at this time. If you are looking to hop on board I'd wait for a dip in the $25.00 area, which should be new support.

(Small Positions)

Current Position: long DFS stock @ $24.10

- or -

May $24 calls (DFS1121E24) Entry @ 0.50, exit 1.55 (+210%)

05/19 exit May calls. closed @ $1.55 (+210%)
05/18 Plan on exiting May $24 call at Thursday's close
05/17 New stop loss @ 23.90
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


Danaher Corp. - DHR - close: 55.22 change: +0.33

Stop Loss: 52.65
Target(s): 58.00-60.00 zone
Current Gain/Loss: + 0.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/19 update: After yesterday's surge higher the rally continued for DHR this morning. Shares opened higher and then spiked to $55.73. Unfortunately the rally ran out of steam and shares closed within a nickel of where they opened. I would still consider positions here but the action today might suggest a dip into the $54.50 soon. Patient traders could wait to launch positions near $54.50 instead. DHR doesn't move super fast so we'll need patience. Our target is the $58-60 range.

Current Position: Long DHR stock @ $55.17

- or -

Long the Sept. $57.50 call (DHR1117I57.5) Entry @ $1.90

Entry on May 19 at $55.17
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 3.5 million
Listed on May 18th, 2011


Dr. Pepper Snapple Group - DPS - close: 42.28 change: +0.64

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

Comments:
05/19 update: DPS continues to rally without us. We may want to adjust our entry point higher. However, for today we'll leave our buy-the-dip trigger 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


Ecolab Inc. - ECL - close: 52.68 change: -0.18

Stop Loss: 50.95
Target(s): 57.00, 59.90
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/19 update: Hmmm... the action in ECL was interesting today. The stock briefly traded above resistance at $53.00 but reversed at $53.24 and closed lower on the session. The move looks like a failed rally and potentially a bearish reversal. Thankfully ECL did not hit our trigger to open positions at $53.25. I am adjusting our trigger point a little bit higher to $53.35 now. If triggered we'll use a stop loss at $50.95. Our targets are $57.00 and $59.90.

Trigger @ 53.35

Suggested Position: buy ECL stock @ 53.25

- or -

buy the July $55 call (ECL1116G55) current ask $0.60

Entry on May x at $xx.xx
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on May 18th, 2011


EMC Corp. - EMC - close: 27.99 change: +0.23

Stop Loss: 26.45
Target(s): 29.95, 32.25
Current Gain/Loss: + 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: EMC managed to stay in positive territory all day. The stock looks poised to rally past short-term resistance at $28.00. I would be tempted to launch new positions here.

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


Expedia Inc. - EXPE - close: 27.26 change: +0.62

Stop Loss: 24.74
Target(s): 27.75, 29.75
Current Gain/Loss: + 5.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: The short squeeze in EXPE continues. Shares rallied another +2.3% on above average volume. This could last a little while as the most recent data listed short interest at almost 12% of the float. I would expect some resistance at $28.00, which is why our first target is $27.75. I would not open new positions at current levels. Our targets are $27.75 and $29.75.

Current Position: Long EXPE stock @ 25.85

- or -

Long the June $25 call (EXPE1118F25) Entry @ $1.20

- or -

Long the July $27 call(EXPE1116G27) Entry @ $0.95

Entry on May 18 at $25.85
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 5.5 million
Listed on May 17th, 2011


Kansas City Southern - KSU - close: 56.67 change: +0.70

Stop Loss: 53.45
Target(s): 59.75, 63.50
Current Gain/Loss: + 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: KSU popped higher on Thursday. Shares opened at $56.39. The early morning rally faded but the stock still managed to close up +1.25%. There is a good chance KSU will retest $56.00 if you're patient you could wait for a dip closer to the $55.50 area as your entry point. Our upside targets are $59.75 and $62.50.

Current Position: Long KSU stock @ $56.39

- or -

Long the June $60 call (KSU1118F60) Entry @ $0.53

Entry on May 19 at $56.39
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on May 18th, 2011


Riverbed Technology, Inc. - RVBD - close: 38.84 change: +0.86

Stop Loss: 34.95
Target(s): 39.90, 43.00
Current Gain/Loss: + 4.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: RVBD rallied off its intraday lows and closed up +2.2% on the session. Shares look ready to challenge resistance at $40.00 soon. Our first target is $39.90.

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: 17.53 change: +0.05

Stop Loss: 16.95
Target(s): 18.40
Current Gain/Loss: + 1.1%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
05/19 update: There is no change from my prior comments on SAI. SAI is bouncing back toward the top of its trading range and resistance at $17.60. Until SAI breaks out past this level I am not suggesting new positions. Even if SAI does breakout I remain wary of this stock. Defense contractors could suffer once the budget cut talks resume in Washington.

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: -0.31

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

Comments:
05/19 update: Semiconductor stocks struggled a bit today after Goldman Sachs downgraded their view of the sector and one of its largest component Intel (INTC). The SMH lost -0.8% on the day.

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: 40.09 change: +0.46

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: + 2.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: XRAY continues to show relative strength. The stock just closed over round-number resistance at the $40.00 mark. I am not suggesting new positions at this time. 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

St. Jude Medical - STJ - close: 51.92 change: -0.58

Stop Loss: 54.20
Target(s): 47.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
05/19 update: The bounce in STJ seems to be failing. Shares lost -1.1%. Currently our plan is to open (small) bearish positions at $51.00. Our first target is $47.00.

I would keep our position size small (about half or less than a normal trade) to limit our risk.

Trigger @ 51.00 (Small Positions)

Suggested Position: Short STJ stock @ 51.00

- or -

buy the June $50 PUT (SJT1118R50) current ask $0.95

Entry on May x at $xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 2.6 million
Listed on May 16th, 2011


Valero Energy - VLO - close: 26.51 change: -0.07

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

Comments:
05/19 update: A pull back in the U.S. dollar today failed to help the price of oil. Action in the oil sector was mixed. VLO spent the day churning sideways. Currently our plan is to launch bearish positions at $25.49. As an alternative we can watch for a failed rally near $28.00 and its 50-dma.

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


CLOSED BULLISH PLAYS

Gilead Sciences Inc. - GILD - close: 40.19 change: -0.16

Stop Loss: 39.95
Target(s): 44.75
Current Gain/Loss: - 2.8%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
05/19 update: I am giving up on GILD. The stock is not cooperating. It keeps trying to bounce from support near $40.00 but there is no follow through. I am suggesting an early exit now.

Closed Position: Long GILD stock @ $41.38, exit $40.19 (-2.8%)

- or -

June $41 calls (GILD1118F41) Entry @ $1.44, Exit 0.65 (-54.8%)

05/19 Exit early. GILD @ 40.19 (-2.8%), Option @ -54.8%
05/17 new stop loss @ 39.95

chart:

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


CLOSED BEARISH PLAYS

Raytheon Co. - RTN - close: 49.73 change: +0.46

Stop Loss: 50.15
Target(s): 45.25
Current Gain/Loss: - 2.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/19 update: I am throwing in the towel with RTN. Technically the stock is still trading under resistance at the $50.0 mark and under its 50-dma and 100-dma. Yet after weeks of churning sideways below this resistance there was no follow through lower. A breakout now could spark some short covering. Nimble traders may actually want to consider bullish positions on a move above $50.00. I am suggesting an early exit immediately. We already had plans to exit our May puts tonight at the close.

Small Positions

closed Position: Short RTN stock @ $48.68, exit 49.79 (-2.1%)

- or -

May $47.00 PUTs (RTN1121Q47) Entry @ $0.28, exit 0.0 (-100%)

05/19 Exit early. RTN @ 49.79 (-2.1%), Option @ -100%

chart:

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