Editor's Note:
Technology stocks struggled on Tuesday and the NASDAQ has closed under key support near 2750 and its 100-dma. Bears seem to be gaining the upper hand here. Our DFS and SAI trades have been stopped out. I'm removing SMH as a candidate.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 30.46 change: -0.52

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 3.3%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/24 update: CAKE is still contracting. Shares fell to $30.22 intraday. I have been suggesting readers wait for a dip near $30.00 as our next entry point. You could launch positions now or hold on for a dip closer to $30.00 and its 40 and 50-dma.

Keep in mind that CAKE doesn't move very fast (at least not normally) so we'll need some patience for this trade to work. FYI: The Point & Figure chart for CAKE is bullish with a $59 target.

Current Position: Long CAKE stock @ $31.53

- or -

Long the July $33 call (CAKE1116G33) Entry @ $0.75

Entry on May 20 at $31.53
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on May 19th, 2011


Capital One Financial - COF - close: 53.03 change: -1.06

Stop Loss: 51.75
Target(s): 57.00, 59.50
Current Gain/Loss: - 0.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/24 update: After four days of gains COF is now down three days in a row. Shares are testing technical support near their 40 and 50-dma. Another decline will likely push COF toward short-term support near $52.00. Bigger picture COF still has a bullish trend of higher highs and higher lows but short-term the situation looks bearish. 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


Danaher Corp. - DHR - close: 53.25 change: -0.47

Stop Loss: 52.65
Target(s): 58.00-60.00 zone
Current Gain/Loss: - 3.4%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/24 update: As expected DHR continues to slip toward support near $53.00 and probably its 50-dma (currently at $52.95). The 50-dma has been support several times over the last few months. A breakdown now would be very bearish. Wait for a bounce from the 50-dma before considering new bullish positions (nimble traders could try and buy a dip near $53.00 with our stop loss at $52.65).

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: 41.91 change: +0.01

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

Comments:
05/24 update: DPS refuses to fall. Shares are just hovering near $42 at the moment. There is no change from my prior comments. We're waiting for a dip towards $40.00, which should be new support. I'm suggesting a buy-the-dip entry point 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: 52.69 change: +0.02

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:
05/24 update: After yesterday's show of strength ECL spiked higher this morning. The stock managed to tag a new all-time high before quickly reversing. Fortunately the high today was only $53.27. Our trigger to open positions is at $53.35. More conservative traders may want to wait for a close over $53.50 instead. 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: 27.32 change: -0.12

Stop Loss: 26.45
Target(s): 29.95, 32.25
Current Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: Tuesday was a mild session for EMC with the stock drifting sideways. Shares remain above technical support at their 40 and 50-dma but I am not suggesting new positions at this time.

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: 27.36 change: -0.19

Stop Loss: 24.74
Target(s): 27.75, 29.75
Current Gain/Loss: + 5.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: Tuesday marks the third day in a row that EXPE has failed at resistance near $28.00. The stock should see more significant profit taking soon. The fact that it hasn't already declined is a show of strength but EXPE remains short-term overbought here. I am not suggesting new positions at this time. Our final target is $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

05/21 New stop loss @ 25.40
05/20 1st Target Hit @ 27.75 (+7.3%), June $25 call @ $2.70 (+125%), July $27 call @ $1.40 (+47.3%)

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: 55.75 change: +0.22

Stop Loss: 53.45
Target(s): 59.75, 63.50
Current Gain/Loss: - 1.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: Tuesday was a lackluster session for railroad stocks. KSU spent the day moving sideways. Readers may want to wait for a dip closer to $54 before considering new bullish positions here. 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: 36.18 change: -1.37

Stop Loss: 34.95
Target(s): 39.90, 43.00
Current Gain/Loss: - 2.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: I cautioned readers to expect a dip back toward $36.00. Shares actually fell to $35.80 today. RVBD managed to find support at its 20 and 50-dma but the short-term oversold bounce was fading lower into the closing bell. I'm not suggesting new positions at this time.

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


DENTSPLY Intl. - XRAY - close: 38.51 change: -0.17

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: - 1.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: Profit taking in XRAY has hit three days in a row although it was slowing down today. I would prefer to wait for a bounce near the $38.00 level before considering new positions. 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

Aon Corp. - AON - close: 51.29 change: -0.54

Stop Loss: 53.05
Target(s): 46.50
Current Gain/Loss: + 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: AON failed near $52.00 early this morning and extended its losses. I would still consider new positions here at current levels.

Our target is the $46.50 level. I would expect some support near $50.00 and the 100-dma so don't be surprised to see an initial bounce near this area. NOTE: The option spreads on AON are a little wide. Conservative traders may not want to play the options.

(small positions only)

Current Position: short AON stock @ 51.61

- or -

Long the June $50 PUT (AON1118R50) entry @ $0.45

05/23 gap down entry @ 51.61

Entry on May 23 at $51.61
Earnings Date 07/29/11 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on May 21st, 2011


LyondellBasell Industries - LYB - close: 39.75 change: +0.85

Stop Loss: 42.05
Target(s): 36.00, 33.00
Current Gain/Loss: - 2.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: LYB saw a bounce today but shares failed to rally past the $40.00 mark. I would be tempted to open new bearish positions now or wait for a failed rally near the 50-dma. The plan was to keep our bearish positions very small to limit our risk. Our targets are $36.00 and $33.00 (or the simple 200-dma).

NOTE: While the options are likely to be very volatile you can limit your risk easier than shorting LYB stock. Buying a put limits your risk to what you paid for the option.

-Small Bearish Positions-

Current Position: short LYB stock @ $38.91

- or -

Long June $40 PUT (LYB1118R40) Entry @ $2.25

05/23 Gap down entry @ 38.91

Entry on May 23 at $38.91
Earnings Date 05/02/11 (confirmed)
Average Daily Volume: 5.0 million
Listed on May 21st, 2011


St. Jude Medical - STJ - close: 49.41 change: +0.11

Stop Loss: 52.26
Target(s): 47.00
Current Gain/Loss: + 3.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: STJ spiked down to $48.94 this morning and then bounced. A little oversold bounce doesn't concern me. What worries me was the big volume on today's session. Volume was more than twice the norm. Why would investors start buying STJ here at these levels. One of their competitors, Medtronic (MDT), just reported earnings today and missed by three cents. MDT's post-earnings comments didn't seem that bullish. In my original update on STJ I stated my opinion that long-term this industry could be a bullish investment due to likely demand by the aging bodies of baby boomers. Short-term STJ still looks vulnerable. I'd wait for a new failed rally under $51 before considering new bearish positions here. Currently our target is $47.00. More aggressive traders may want to aim lower.

Earlier Comments:
We wanted to keep our position size small (about half or less than a normal trade) to limit our risk.

(Small Positions)

Current Position: Short STJ stock @ 51.00

- or -

Long the June $50 PUT (SJT1118R50) Entry @ $1.00

05/23 New stop loss @ 52.26

Entry on May 20 at $51.00
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 2.6 million
Listed on May 16th, 2011


Valero Energy - VLO - close: 25.84 change: -0.09

Stop Loss: 27.05
Target(s): 23.00
Current Gain/Loss: - 1.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/24 update: Hmm... most of the energy sector rallied on bullish comments from Goldman Sachs on the commodity space. VLO did not participate and the early rally in VLO today failed. This may be a new bearish entry point. Previously I suggested looking for a failed rally near the 10-dma and that's what VLO delivered today. Our target is $23.00 near the 200-dma.

Current Position: Short VLO stock @ $25.49

- or -

Long June $25 PUT (VLO1118R25) Entry @ $0.90

05/23 Triggered @ 25.49.

Entry on May 23 at $25.49
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume: 11 million
Listed on May 14th, 2011


CLOSED BULLISH PLAYS

Discover Financial Services - DFS - close: 23.55 change: -0.88

Stop Loss: 23.90
Target(s): 27.25
Current Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: DFS was a big underperformer on Tuesday. Shares extended their losses to three days in a row and fell -3.6% on Tuesday. I could not find any specific headlines behind this decline. The breakdown under $24 and its 50-dma is bearish. Our stop loss was hit at $23.90. The bullish breakout higher last week definitely looks like a bull trap now. The next level of support should be the $22 area (possibly the 100-dma).

(Small Positions)

Closed Position: long DFS stock @ $24.10, exit 23.90 (-0.8%)

05/24 Stopped out @ 23.90 (-0.8%)
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

chart:

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


SAIC, Inc. - SAI - close: 17.12 change: -0.19

Stop Loss: 17.15
Target(s): 18.40
Current Gain/Loss: - 1.0%
Time Frame: 8 to 9 weeks
New Positions: see below

Comments:
05/24 update: SAI hit our stop loss. Shares broke down from their multi-week trading range in the $17.20-17.60 zone. Shares not only fell through support near $17.20 but they also fell through the 50-dma. Our stop was hit at $17.15.

Closed Position: long SAI stock @ $17.33, exit 17.15 (-1.0%)

- or -

Aug $18 call (SAI1120H18) entry @ $0.55, exit $0.20 (-63.6%)

05/24 stopped out @ 17.15 (-1.0%), Option @ -63.6%
05/21 New stop loss @ 17.15
04/30 Warning, SAI has produced a reversal. consider an early exit
04/27 New stop loss @ 16.95

chart:

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: 34.94 change: -0.26

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

Comments:
05/24 update: Semiconductor stocks continued to fall on Tuesday. The SMH broke down and closed under the $35.00 level and under technical support at it 50-dma. I am removing SMH as a candidate. This ETF never hit our trigger to open positions.

Trigger @ 37.05 <-- never opened.

chart:

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