Editor's Note:
There was a common theme today. The early morning strength faded but traders were buying the midday dip. Today's move looks like a bullish breakout for the major averages. If this rally continues it's going to be really tough to trade any bearish positions.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 31.77 change: +0.21

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: + 0.7%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/31 update: CAKE delivered another gain on Tuesday but it was disappointing to see shares struggle at the $32 level. Readers may want to wait for a dip near $31.00 or $30.50 before considering new positions.

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

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: 54.34 change: +0.30

Stop Loss: 51.75
Target(s): 57.00, 59.50
Current Gain/Loss: + 2.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/31 update: Tuesday proved to be a quiet day for COF. Shares consolidated sideways near $54.00 most of the session. 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

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: 56.73 change: +0.13

Stop Loss: 53.60
Target(s): 59.90
Current Gain/Loss: + 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: The early morning spike in CPO failed but traders bought the dip near $56 midday. I would still prefer to wait and launch new positions near $55. The $58.00 mark is probably 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

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: 54.53 change: +0.09

Stop Loss: 52.65
Target(s): 58.00-60.00 zone
Current Gain/Loss: - 1.1%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
05/31 update: DHR also saw its morning spike fail only to see shares bounce off its midday lows. The afternoon bounce can be used as a new bullish entry point.

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: 41.20 change: +0.14

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

Comments:
05/31 update: DPS briefly traded under its 20-dma before bouncing. Our plan hasn't changed. 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

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: 54.88 change: +0.89

Stop Loss: 50.95
Target(s): 57.00, 59.90
Current Gain/Loss: + 2.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: ECL extended its gains and settled at new highs. I suspect the $55.00 level could be round-number resistance so don't be surprised to see a little profit taking soon. Fortunately broken resistance near $53.00 should be new support. I am not suggesting new positions at current levels.

Current Position: Long ECL stock @ 53.35

- or -

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

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: 28.47 change: +0.04

Stop Loss: 26.45
Target(s): 29.95, 32.25
Current Gain/Loss: + 3.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: EMC dipped to $28.10 before traders bought the dip around lunch time. The $28.70 level remains overhead resistance. 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.

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: 28.01 change: +0.32

Stop Loss: 26.25
Target(s): 27.75, 29.75
Current Gain/Loss: + 8.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: EXPE continues to show relative strength. Shares are on the verge of breaking out past resistance near $28.00. I am raising our stop loss to $26.25. EXPE still looks a little overbought in spite of a week-long consolidation so I'm 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

05/31 new stop loss @ 26.25
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


Jabil Circuit Inc. - JBL - close: 21.58 change: +0.36

Stop Loss: 19.90
Target(s): 22.95, 24.75
Current Gain/Loss: + 0.6%
Time Frame: until June 21st, 2011
New Positions: see below

Comments:
05/31 update: JBL gapped open higher at $21.44 and spent the rest of the day slowly drifting higher. I would consider new positions here but there is a good chance we'll see JBL retest the $21.00 area so patient traders might want to wait and buy a dip there.

Shares do still have overhead resistance near $22 but if this trend continues we should see JBL breakout past this level in the next week or two.

We only have a few weeks for this trade to work as JBL reports earnings on June 21st and we don't want to hold over the announcement.

- Use Small Positions -

Current Position: Long JBL stock @ $21.44

- or -

Long July $22 call (JBL1116G22) Entry @ $1.05

Entry on May 31 at $21.44
Earnings Date 06/21/11 (confirmed)
Average Daily Volume: 3.6 million
Listed on May 28th, 2011


Kansas City Southern - KSU - close: 58.89 change: +0.41

Stop Loss: 53.45
Target(s): 59.75, 62.50
Current Gain/Loss: + 4.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: KSU underperformed its peers in the railroad industry. Shares still managed a +0.7% gain after traders bought the dip near $58.00 midday. I would not launch new positions at current levels. Consider waiting for a dip near $57 instead. 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


Rosetta Resources - ROSE - close: $49.15 change: +1.02

Stop Loss: 43.90
Target(s): 54.00
Current Gain/Loss: + 3.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: Shares of ROSE rallied toward their early May highs and stalled. After trimming its gains ROSE still posted a +2.1% advance today. The $50 level remains resistance. Consider waiting for a dip into the $47.00-46.00 area before launching positions.

-Small Bullish Positions-

Current Position: Long ROSE stock @ $47.35

- or -

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

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: 37.92 change: -0.01

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:
05/31 update: Hmm... RVBD failed to post a gain today. Shares saw their early strength fade but traders did buy the dip at $37.00. I remain cautiously bullish but would hesitate to launch 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


DENTSPLY Intl. - XRAY - close: 39.24 change: +0.10

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: + 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: XRAY spent most of the day trading sideways above the $39 level. I would still consider buying this bounce but readers may want to raise their stop loss. Keep in mind that XRAY doesn't move that fast. 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: 52.15 change: +0.78

Stop Loss: 52.75
Target(s): 46.50
Current Gain/Loss: - 1.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: Warning! AON has closed above short-term resistance at $52.00. More conservative traders may want to exit early now considering the market's bullish breakout today. AON still has overhead resistance in the $52.50 area so I'm not giving up yet but we're not suggesting new positions at this time. Please note our new stop loss at $52.75.

Earlier Comments:
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

05/31 New stop loss @ 52.75
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: 14.92 change: +0.32

Stop Loss: 15.15
Target(s): 13.25
Current Gain/Loss: - 3.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: The market's strength today helped fuel a +2.1% bounce in shares of Ford. The stock nearing what should be significant resistance near $15.00 and its 50 and 200-dma. Wait for this bounce to fail before launching 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

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


H&R Block - HRB - close: 16.20 change: +0.23

Stop Loss: 16.55
Target(s): 14.10
Current Gain/Loss: unopened
Time Frame: until June 23rd, 2011
New Positions: Yes, see trigger

Comments:
05/31 update: HRB spent most of the day trading sideways near $16.00. Shares saw a rally late in the day and HRB closed up +1.4%. We are waiting for the stock to break the new trend of higher lows in what looks like a bear-flag pattern.

I am suggesting a trigger to open bearish positions at $15.60, which is under last week's low. More conservative traders may want to wait for a breakdown under the rising 100-dma, which could act as possible support. If we are triggered at $15.60 our target is $14.15 near the 200-dma.

Trigger @ 15.60

Suggested Position: Short HRB stock @ $15.60

- or -

buy the July $15.00 PUT (HRB1116S15) current ask $0.65

Entry on May x at $xx.xx
Earnings Date 06/23/11 (confirmed)
Average Daily Volume: 5.8 million
Listed on May 28th, 2011


St. Jude Medical - STJ - close: 50.67 change: +0.11

Stop Loss: 52.26
Target(s): 47.00
Current Gain/Loss: + 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/31 update: The good news here is that STJ didn't see much of a bounce (+0.2%) but the bad news is that the bounce may not be over yet. 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. Keep in mind that bearish plays are going to be tough to trade if the market accelerates higher. 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