Editor's Note:
Stocks extended their correction to five weeks in a row. We saw two more candidates get stopped out. Plus, we're closing three more as we trim our play list.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 29.88 change: -0.68

Stop Loss: 28.95
Target(s): 33.95, 37.00
Current Gain/Loss: - 5.2%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
06/04 update: I seriously considered an early exit from our CAKE trade. Friday's drop is bearish with a close under the $30.00 level. Yet the selling paused at its 100-dma and CAKE has not yet broken its longer-term up trend (see weekly chart below). More conservative traders may want to exit anyway. At this point, with the market trending lower, I would expect CAKE to test its 200-dma near $29.20 before seeing any significant bounce. No new positions at this time. We'll wait and see if CAKE provides a bounce from the 200-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

06/04 More conservative traders may want to exit early. We are expecting a drop to the 200-dma.

daily chart:

Weekly 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


Corn Products Intl. - CPO - close: 54.88 change: -1.12

Stop Loss: 53.60
Target(s): 59.90
Current Gain/Loss: - 2.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: CPO is now down three days in a row and trading near what should be short-term support near $55 and its 30-dma. Unfortunately the weekly chart has painted a rather bearish looking candlestick. I am not suggesting new bullish positions at this time. Last month CPO found support at its rising 40-dma. Today the 40-dma is near $54.00 while our stop is at $53.60. More aggressive traders might want to consider a stop under the 50-dma instead (currently 53.45).

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


Dr. Pepper Snapple Group - DPS - close: 40.30 change: -0.46

Stop Loss: 38.95
Target(s): 44.90
Current Gain/Loss: + 0.1%
Time Frame: 8 to 12 weeks
New Positions: see below

Comments:
06/04 update: After two weeks of waiting shares of DPS have finally hit our trigger to buy the dip at $40.25. The stock slipped to $40.17 on Friday. Broken resistance near $40.00 should be significant support. I would consider new positions now but given the market's bearish trend I'd keep our position size small. Please note that the 50-dma has risen to $39.51. I a moving our stop loss up to $38.95. Our multi-week target is the $45 area but that could take a while! Since DPS normally doesn't move that fast there is no real rush to jump into bullish positions today.

Current Position: Long DPS stock @ $40.25

- or -

Long Aug $45 call (DPS1120H45) Entry @ $0.30

06/04 new stop loss @ 38.95

chart:

Entry on June 3 at $40.25
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 2.1 million
Listed on May 14th, 2011


Ecolab Inc. - ECL - close: 54.10 change: -0.23

Stop Loss: 51.90
Target(s): 57.00, 59.90
Current Gain/Loss: + 1.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: Profit taking in ECL was pretty mild on Friday. Shares pared their losses by the close. I will point out that the weekly chart doesn't look so hot. Last week's action looks like a failed rally and a potential top at resistance near $55.00. Given the market's current trend lower I would expect ECL to correct toward support near $53.00. We are raising our stop loss to $51.90. More conservative traders may want to raise their stops even higher. No new positions at this time.

Current Position: Long ECL stock @ 53.35

- or -

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

06/04 new stop loss @ 51.90

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: 27.93 change: -0.43

Stop Loss: 26.90
Target(s): 29.95, 32.25
Current Gain/Loss: + 1.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: Thus far EMC has been able to maintain its long-term trend of higher lows but that doesn't mean the stock is not vulnerable to more profit taking. I am not suggesting new bullish positions at this time. More conservative traders may want to exit early now, especially if you're holding call options. June options expire in two weeks. We want to look for an exit in our call options this coming week. If you're holding options and don't exit early then consider a higher stop loss.

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

06/04 consider an early exit now, especially if you're holding options. We will look for an exit from our option trade in the next few days.
06/01 new stop loss @ 26.90
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


Electronic Arts Inc. - ERTS - close: 24.03 change: -0.21

Stop Loss: 23.45
Target(s): 26.25, 28.00
Current Gain/Loss: - 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: Believe it or not ERTS managed to post a gain for the week thanks to Tuesday's big move higher. Shares have not yet broken new support (old resistance) at $24.00 and technically this dip to $24.00 could be used as a new entry point. My concern is that this past week's action looks like a top on the weekly chart. I am moving our stop loss $23.45. Be careful here. If ERTS breaks down it could move fast since the stock has seen such a big move higher in May.

Earlier Comments:
I am suggesting that we keep our position size small to limit our risk. Our targets are $26.25 and $27.00.

- Small Positions -

Current Position: Long ERTS stock @ $24.44

- or -

Long July $25 call (ERTS1116G25) Entry @ $0.90

06/04 New stop @ 23.45

chart:

Entry on June 1 at $24.44
Earnings Date 08/02/11 (unconfirmed)
Average Daily Volume: 5.8 million
Listed on May 31st, 2011


Expedia Inc. - EXPE - close: 27.63 change: -0.29

Stop Loss: 26.70
Target(s): 27.75, 29.75
Current Gain/Loss: + 6.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: The market may be down five weeks in a row but EXPE is still holding up. Shares have been consolidating sideways near resistance at the $28.00 level the last two weeks. The lack of weakness is certainly encouraging but I would not launch new positions here.

I am repeating my prior comments that more conservative traders will want to consider taking profits now and exiting this position. I am not suggesting new positions at this time.

FYI: June options expire in two weeks. We will be looking for an exit soon in our June $25 calls, which has a current bid of $2.45 (+104%).

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

06/04 consider an early exit, especially if you have the June calls. Currently the bid on the June $25 call is $2.45 (+104%).
06/01 new stop loss @ 26.70
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%)

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: 56.57 change: -1.46

Stop Loss: 54.70
Target(s): 59.75, 62.50
Current Gain/Loss: + 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: Warning! KSU was an underperformer on Friday with a -2.5% decline. Shares gave back almost all of Thursday's bounce. Technicals are naturally starting to turn negative even though KSU's longer-term trend is higher. Currently we have a stop loss at $54.70, which is under what should be support near $55.00 and its 50-dma but more conservative traders may want to abandon ship and exit early. I am not suggesting new positions at this time.

Current Position: Long KSU stock @ $56.39

- or -

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

06/01 New stop loss @ 54.70

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: $47.30 change: +0.22

Stop Loss: 44.75
Target(s): 54.00
Current Gain/Loss: - 0.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: ROSE displayed some relative strength on Friday. Traders bought the dip near $45.00 on Friday morning and the stock closed up +0.4%. I remain cautious here and we're raising our stop loss up to $44.75. Given the stock market's trend I would hesitate to launch new positions.

-Small Bullish Positions-

Current Position: Long ROSE stock @ $47.35

- or -

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

06/04 new stop loss @ 44.75

chart:

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


BEARISH Play Updates

Aon Corp. - AON - close: 51.51 change: -0.05

Stop Loss: 52.75
Target(s): 46.50
Current Gain/Loss: + 0.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: AON spiked down to a new two-month low on Friday morning and then immediately bounced. Readers may want to wait for another failed rally type of move near $52.25 or its 50-dma near $52.50 before considering new bearish positions.

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

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: 14.01 change: -0.17

Stop Loss: 15.15
Target(s): 13.25
Current Gain/Loss: + 2.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: Ford also sank to new two-month lows on Friday morning. Shares did trim their losses to settle with a -1.1% decline. We have been expecting Ford to produce an oversold bounce near its March lows and shares almost hit this level on Friday morning. I am not suggesting new positions at this time. Currently our target is $13.25. 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


Honeywell Intl. - HON - close: 57.25 change: -0.70

Stop Loss: 60.15
Target(s): 54.00 & 200-dma
Current Gain/Loss: + 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: HON produced a similar pattern with a gap down at the open and then a bounce off its Friday morning lows. The rebound stalled at technical resistance near its 100-dma. Readers can launch new positions here or wait for a bounce/failed rally move near the $59.00 area.

Earlier Comments:
We do want to keep our position size small to limit our risk. Our targets are $54.00 and the simple 200-dma.

- Small Positions -

Current Position: short HON stock @ 57.65

- or -

Long July $55 PUT (HON1116S55) Entry @ $0.75

chart:

Entry on June 2 at $57.65
Earnings Date 07/22/11 (unconfirmed)
Average Daily Volume: 4.1 million
Listed on June 1st, 2011


St. Jude Medical - STJ - close: 48.07 change: -0.88

Stop Loss: 51.05
Target(s): 47.00, 45.75
Current Gain/Loss: + 5.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: STJ continues to sink and shares lost -1.79% on Friday along with a breakdown under its 100-dma. Our first target to take profits is at $47.00. Please note that I am adding a second, more aggressive target at $45.75. We will lower our stop loss down to $51.05. I am not suggesting new positions at this time.

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

06/04 New stop loss @ 51.05, added second target at $45.75
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 BULLISH PLAYS

Capital One Financial - COF - close: 51.55 change: -0.97

Stop Loss: 51.75
Target(s): 57.00, 59.50
Current Gain/Loss: - 2.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/04 update: The correction in COF continued on Friday. Shares actually gapped open lower at $51.85, which was under the neckline (support level) of its bearish head-and-shoulders pattern. This pattern is now forecasting a drop toward the $48 area, which would line up with the March lows. Our stop loss was hit at $51.75 closing this trade.

Current Position: Long COF stock @ $53.07, exit $51.75 (-2.4%)

- or -

June $55 calls (COF1118F55) Entry @ $0.96, exit $0.20 (-79.1%)

06/04 stopped out @ 51.75 (-2.4%), Option @ -79.1%
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


Jabil Circuit Inc. - JBL - close: 19.95 change: -0.83

Stop Loss: 19.90
Target(s): 22.95, 24.75
Current Gain/Loss: - 7.1%
Time Frame: until June 21st, 2011
New Positions: see below

Comments:
06/04 update: The bounce in JBL has failed. The stock has now broke down below most of its key moving averages and hit our stop loss at $19.90 on Friday. This was an aggressive trade and we wanted to keep our position size small to limit our risk.

- Use Small Positions -

Current Position: Long JBL stock @ $21.44, exit 19.90 (-7.1%)

- or -

July $22 call (JBL1116G22) Entry @ $1.05, exit 0.40 (-61.9%)

06/03 stopped out @ 19.90 (-7.1%), option @ -61.9%

chart:

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


Riverbed Technology, Inc. - RVBD - close: 37.00 change: -0.94

Stop Loss: 34.95
Target(s): 39.90, 43.00
Current Gain/Loss: - 0.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: I am throwing in the towel on our RVBD trade and suggesting an early exit. Shares lost -2.4% on Friday, which was much worse than the NASDAQ's -1.4% decline. The action this past week looks like a failed rally at the $40.00 level. I'd rather exit now and free up some capital.

closed Position: Long RVBD stock @ $37.25, exit 37.00 (-0.6%)

- or -

June $40 call (RVBD1118F40) Entry @ $1.15, exit 0.35 (-69.5%)

06/04 exit early. RVBD @ 37.00 (-0.6%), option @ -69.5%

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: 37.60 change: -0.77

Stop Loss: 37.30
Target(s): 42.00, 44.50
Current Gain/Loss: - 3.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/04 update: XRAY has seen a sharp three-day decline and a breakdown under what should have been support at the $38.00 level. Bulls could argue that shares are still above their 50-dma and still have a larger trend of higher lows. Yet I would rather exit now before we see XRAY accelerate lower.

Earlier Comments:
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.

closed Position: Long XRAY stock @ 39.00, exit 37.60 (-3.5%)

- or -

June $40 call (XRAY1118F40) Entry @ 0.60, exit 0.00 (-100%)

06/04 exit early. XRAY @ 37.60 (-3.5%), option @ -100%

chart:

Entry on May 12 at $39.00
Earnings Date 07/25/11 (unconfirmed)
Average Daily Volume: 904 thousand
Listed on May 7th, 2011


CLOSED BEARISH PLAYS

H&R Block - HRB - close: 16.11 change: -0.04

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

Comments:
06/04 update: I am removing HRB as a bearish candidate. Even though shares have been relatively resistant to any selling this past week with the market moving lower HRB still looks bearish. Unfortunately the stock just isn't moving much at all. I'm dropping it as a candidate. Our trade never opened.

Trigger @ 15.60 - was never hit

chart:

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