Editor's Note:
Financial stocks were some of the best performers on Friday. Unfortunately the trend for the banking indices is still a bearish one of lower highs and lower lows. Meanwhile we saw VLO hit our stop loss on Friday.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 31.56 change: -0.28

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: + 0.1%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/28 update: Friday's low-volume session saw CAKE's rally run out of gas at its trendline of higher highs. If the current trend continues we could see CAKE pull back toward the $30.50 area again before bouncing. CAKE doesn't move very fast so we can wait to buy the next dip or bounce near its 30-dma.

Earlier Comments:
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

chart:

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: 54.04 change: +1.17

Stop Loss: 51.75
Target(s): 57.00, 59.50
Current Gain/Loss: + 1.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/28 update: Financials were some of the better performers on Friday. COF outperformed its peers with a +2.2% gain. I would still consider new bullish positions here or you could wait for another dip or bounce near $53.00. However, COF might be forming a bearish wedge pattern. I'd keep new positions small to limit our risk.

Current Position: Long COF stock @ $53.07

- or -

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

05/17 New stop loss @ 51.75

chart:

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


Corn Products Intl. - CPO - close: 56.60 change: +0.60

Stop Loss: 53.60
Target(s): 59.90
Current Gain/Loss: + 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: CPO posted another gain albeit on low volume this Friday. Little has changed from my Thursday comments. The stock has short-term support at $55.00 and readers may want to wait for a dip near this level before initiating new positions. The $58.00 mark is probably short-term resistance but we'll set our first target at $59.90. FYI: The Point & Figure chart for CPO is bullish with an $82 target.

Current Position: Long CPO stock @ 56.28

- or -

Long June $55 call (CPO1118F55) Entry @ $2.10

chart:

Entry on May 27 at $56.28
Earnings Date 07/25/11 (unconfirmed)
Average Daily Volume: 688 thousand
Listed on May 26th, 2011


Danaher Corp. - DHR - close: 54.44 change: +0.80

Stop Loss: 52.65
Target(s): 58.00-60.00 zone
Current Gain/Loss: - 1.3%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/28 update: Close enough! On Thursday I suggested readers wait for a close over $54.50 before considering new positions. The stock outperformed on Friday with a +1.5% gain to close at $54.44. I would consider new positions here.

Current Position: Long DHR stock @ $55.17

- or -

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

chart:

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: 41.06 change: -0.50

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

Comments:
05/28 update: The correction in DPS continues. Shares failed near their 10-dma on Friday and closed at their lows for the week. We've been waiting for a correction so hopefully it continues this week. 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

chart:

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: 53.99 change: +0.69

Stop Loss: 50.95
Target(s): 57.00, 59.90
Current Gain/Loss: + 1.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: The breakout in ECL continues. Shares rallied +1.29% on Friday to close at new all-time highs. I would still consider new positions here but you might want to wait for a dip back toward the $53.25-53.00 area instead.

Current Position: Long ECL stock @ 53.35

- or -

Long July $55 call (ECL1116G55) Entry @ $0.60

chart:

Entry on May 26 at $53.35
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on May 18th, 2011


EMC Corp. - EMC - close: 28.43 change: +0.22

Stop Loss: 26.45
Target(s): 29.95, 32.25
Current Gain/Loss: + 3.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: EMC is up three days in a row. Shares are nearing resistance at its 2011 highs near $28.70. I wouldn't be surprised to see EMC churn sideways for a couple of days before breaking out. I'm not suggesting new positions at this time. Our first target is $29.95.

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.

chart:

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: 27.69 change: +0.33

Stop Loss: 24.74
Target(s): 27.75, 29.75
Current Gain/Loss: + 7.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: EXPE made another rally attempt at resistance near $28.00 but didn't quite make it. A week of consolidating sideways might have recharged EXPE enough to rally toward $30.00 but I would not start new positions at these levels. 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%)

chart:

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: 58.48 change: -0.02

Stop Loss: 53.45
Target(s): 59.75, 62.50
Current Gain/Loss: + 3.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: KSU tagged a new all-time high on Friday morning. Technically the stock has created an inverse head-and-shoulders pattern that is forecasting a move toward $62.00. I would look for a dip near $57.00 before launching new 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

chart:

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


Rosetta Resources - ROSE - close: $48.13 change: -0.03

Stop Loss: 43.90
Target(s): 54.00
Current Gain/Loss: + 1.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: ROSE didn't make much progress on Friday. Shares still look poised to move higher. Readers can launch positions now or if you're patient consider waiting for a dip into the $47.00-46.00 area before launching positions. The $50.00 level is still overhead resistance but we're aiming for $54.00.

-Small Bullish Positions-

Current Position: Long ROSE stock @ $47.35

- or -

Long July $50 call (ROSE1116G50) Entry @ $1.95

chart:

Entry on May 26 at $47.35
Earnings Date 08/08/11 (unconfirmed)
Average Daily Volume: 967 thousand
Listed on May 25th, 2011


Riverbed Technology, Inc. - RVBD - close: 37.93 change: +0.36

Stop Loss: 34.95
Target(s): 39.90, 43.00
Current Gain/Loss: + 1.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: RVBD extended its bounce to three days in a row. I remain cautiously bullish here. If you launch positions I would keep our position size small to limit risk. Look for short-term support near the 20-dma or the $36 level.

Current Position: Long RVBD stock @ $37.25

- or -

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

chart:

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: 39.14 change: +0.09

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: + 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: Friday was a quiet day for XRAY. Shares drifted sideways near $39.00 all day long. There is no change from my Thursday comments. Readers can buy this bounce but consider upping your stop loss closer to the $38 level. 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

chart:

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: 51.37 change: -0.57

Stop Loss: 53.05
Target(s): 46.50
Current Gain/Loss: - 0.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: Right on cue AON failed at resistance near $52.00. This move on Friday looks like a new entry point for bearish 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

chart:

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: 14.60 change: +0.04

Stop Loss: 15.15
Target(s): 13.25
Current Gain/Loss: - 1.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: Not much has changed for Ford. The stock has been moving sideways the last couple of days. I would wait and watch for a failed rally near resistance at $14.75 or the $15.00 level before starting new bearish positions. 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

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: 50.56 change: +0.37

Stop Loss: 52.26
Target(s): 47.00
Current Gain/Loss: + 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/28 update: STJ is still bouncing. We're looking for overhead resistance near $51.00 or the 50-dma closer to $52. Wait for the bounce to reverse before initiating new positions. 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

chart:

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


CLOSED BEARISH PLAYS

Valero Energy - VLO - close: 26.92 change: +0.50

Stop Loss: 27.05
Target(s): 23.00
Current Gain/Loss: - 6.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/28 update: We've been worried about VLO the last couple of days. The stock has been bouncing from Monday's low and after Thursday it looked like VLO might surge higher and break one of its trends of lower highs. Sure enough VLO rallied again on Friday and hit our stop loss at $27.05 closing this trade. The weekly chart has produced a bullish engulfing reversal candlestick.

Closed Position: Short VLO stock @ $25.49, exit 27.05 (-6.1%)

- or -

June $25 PUT (VLO1118R25) Entry @ $0.90, exit @ 0.20 (-77.7%)

05/27 Stopped out @ 27.05 (-6.1%), Option -77.7%
05/23 Triggered @ 25.49.

chart:

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