Editor's Note:
Wednesday's session witnessed an intraday bounce off its morning lows. Yet for many stocks today's bounce does not break the short-term trend of lower highs and lower lows. Still it would appear many equities look poised to continue the oversold bounce.

Ford hit our trigger for bearish positions while LYB hit our stop loss.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 30.88 change: +0.42

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 2.0%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/25 update: Traders bought the dip near $30.20 again and CAKE rallied to a +1.3% gain. We've been hoping for a dip near $30.00 but I would consider new bullish positions now.

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: 52.41 change: -0.62

Stop Loss: 51.75
Target(s): 57.00, 59.50
Current Gain/Loss: - 1.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/25 update: It's not looking good for COF. Last week's rally has been completely erased. Shares are testing support near $52.00. Making matters worse, at least technically, COF has closed under its simple 50-dma. 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: 53.91 change: +0.66

Stop Loss: 52.65
Target(s): 58.00-60.00 zone
Current Gain/Loss: - 2.2%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/25 update: DHR briefly traded under support near $53 and its 50-dma but the stock rallied pretty quickly off its lows. Shares ended up +1.2%. We can use this bounce from its 50-dma as a bullish entry point. More conservative traders can raise their stops toward today's low at $52.82.

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: 41.44 change: -0.47

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

Comments:
05/25 update: DPS underperformed the market on Wednesday. We have been waiting for a correction so this could be the beginning of its pull back. The $40.00 level should be 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: 53.10 change: +0.41

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:
05/25 update: ECL is growing stronger and the stock is poised to breakout higher. More aggressive traders may want to launch positions now. 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: 27.59 change: +0.27

Stop Loss: 26.45
Target(s): 29.95, 32.25
Current Gain/Loss: + 0.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: EMC delivered its first gain for the week. I would be tempted to buy this bounce but if you do consider a stop loss closer to the $27.00 level.

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: 27.33 change: -0.03

Stop Loss: 24.74
Target(s): 27.75, 29.75
Current Gain/Loss: + 5.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: Wednesday proved to be a very quiet day for EXPE. Shares churned sideways in a very narrow range. There is no change from my prior comments. We're expecting a correction back toward $26.00. 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: 57.60 change: +1.85

Stop Loss: 53.45
Target(s): 59.75, 63.50
Current Gain/Loss: + 2.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: Some of the railroad stocks were showing strength today. KSU rallied +3.3%. I would use this bounce as a new entry point to launch bullish positions. 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: 37.11 change: +0.93

Stop Loss: 34.95
Target(s): 39.90, 43.00
Current Gain/Loss: - 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: RVBD recouped a large chunk of yesterday's losses. Unfortunately today's session is actually kind of neutral. RVBD produced an "inside day". The stock bounced from technical support at the 20-dma but stalled this afternoon near technical resistance at its 10 and 100-dma. 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: 38.57 change: +0.06

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: - 1.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: It was a quiet day for XRAY. The stock rebounded off its morning lows but then failed to see any follow through higher. Volume was very light. I'm not suggesting new positions at this time. 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: 51.69 change: +0.40

Stop Loss: 53.05
Target(s): 46.50
Current Gain/Loss: - 0.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: AON bounced from its morning lows near $50.95 and closed up +0.7%. Shares look poised to retest overhead resistance near $52.00 and possibly the $52.50 levels. More conservative traders may want to lower their stops closer to the $52.50 mark. Wait for the failed rally pattern to appear before launching new positions.

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


Ford Motor Co. - F - close: 14.58 change: -0.08

Stop Loss: 15.15
Target(s): 13.25
Current Gain/Loss: - 1.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: Ford underperformed the market's major indices today. Shares spiked down to $14.35 before bouncing but still closed in negative territory. Our trigger to launch bearish positions was hit at $14.40. Given the bounce off its lows readers may want to wait before initiating new positions. Look for the rebound to pause near $14.75 or even $15.00 before initiating new trades. Currently our target is $13.25. Do not be surprised if Ford produces a short-term bounce near its March lows near $13.75. I would keep our position size small to limit our risk.

Small Positions!

Current Position: Short F stock @ $14.40

- or -

Long July $15 PUT (F1116S15) Entry @ $0.90

Annotated chart:

Entry on May 25 at $14.40
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume: 57 million
Listed on May 24th, 2011


St. Jude Medical - STJ - close: 49.42 change: +0.01

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

Comments:
05/25 update: Be careful here with STJ. The stock didn't actually move much today but shares did rebound off their morning lows (like most everything else today). STJ looks like it's ready to produce a little oversold bounce. I would expect a bounce toward the $51 area or the 50-dma. I am not suggesting new positions at this time. 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: 26.26 change: +0.42

Stop Loss: 27.05
Target(s): 23.00
Current Gain/Loss: - 3.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/25 update: Warning! Our VLO play could be in jeopardy. At the moment VLO still has a bearish trend of lower highs and lower lows. Yet the oil sector has been showing strength the last couple of days and the oil indices look ready to rally from their recent consolidations. If that happens then VLO will most likely hit our stop loss at $27.05. More conservative traders will want to seriously consider an early exit now to cut their losses. I am not suggesting new positions at this time.

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 BEARISH PLAYS

LyondellBasell Industries - LYB - close: 41.59 change: +1.84

Stop Loss: 42.05
Target(s): 36.00, 33.00
Current Gain/Loss: - 8.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/25 update: Our aggressive trade on LYB has been stopped out. Shares barely saw any weakness this morning. The stock quickly rallied (on no news) and broke through resistance near $40 and its 50-dma. Late this afternoon there was a spike to $42.08, which was just enough to hit our stop loss at $42.05.

Our plan was to keep our position size small to limit our risk.

-Small Bearish Positions-

closed Position: short LYB stock @ $38.91, exit $42.05 (-8%)

- or -

June $40 PUT (LYB1118R40) Entry @ $2.25, exit 0.65 (-71.1%)

05/25 Stopped out @ 42.05 (-8%), Option @ -71.1%
05/23 Gap down entry @ 38.91

chart:

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