Editor's Note:
It was not a surprise to see the stock market stall after last week's impressive rally higher. Most of our trading candidates consolidated sideways.

-James

Current Portfolio:


BULLISH Play Updates

American Express Co. - AXP - close: 52.33 change: -0.01

Stop Loss: 49.25
Target(s): 54.75
Current Gain/Loss: unopened
Time Frame: up to its earnings report
New Positions: Yes, see trigger

Comments:
07/05 update: AXP didn't move very much today. Shares churned sideways in a 40-cent range. There is no change from my weekend comments. On a short-term basis the stock is overbought. I am suggesting we launch bullish positions on a dip at $51.00. More conservative traders could wait for a dip closer to $50.00 instead. I'm setting our target at $54.90 but that might be a little optimistic since we do not want to hold over the July 20th earnings report.

Trigger @ 51.00

Suggested Position: buy AXP stock @ 51.00

- or -

buy the Aug. $50 call (AXP1120H50)

Entry on July x at $xx.xx
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume: 7.0 million
Listed on July 2, 2011


Cheesecake Factory Inc. - CAKE - close: 33.34 change: +0.51

Stop Loss: 30.75
Target(s): 33.60, 37.00
Current Gain/Loss: + 5.7%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
07/05 update: CAKE displayed some relative strength with a +1.5% gain. The stock is nearly potential sport at its December highs in the $33.60-34.00 area. I am adjusting our first target to take profits down to $33.60. Don't forget that July options expire in less than two weeks now. You might want to exit these calls right now. If you sold them here we could recoup our entry cost of $0.75.

I am not suggesting new bullish positions at this time.

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

07/05 adjusted 1st target to $33.60
07/02 new stop loss @ 30.75
06/30 consider the opportunity cost of staying in CAKE. maybe you should exit early
06/28 New stop loss @ 29.65
06/09 CAKE is bouncing from the 200-dma as expected.
06/04 More conservative traders may want to exit early. We are expecting a drop to the 200-dma.

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


Dr. Pepper Snapple - DPS - close: 42.74 change: +0.59

Stop Loss: 39.40
Target(s): 46.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
07/05 update: DPS was also showing some relative strength today. The stock surged past resistance at its May highs and closed up +1.3%. I didn't see any specific news behind the rally today. Currently our plan is to buy a dip near support at $41.25. More aggressive traders may want to start inching up their trigger point to launch positions. Normally I would avoid holding over earnings but I am tempted to hold over DPS' late July earnings report. Our multi-week target is $46.00.

Trigger @ $41.25

Suggested Position: buy DPS stock @ $41.25

- or -

buy the Aug. $40 call (DPS1120H40)

Entry on July x at $xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on June 30, 2011


Ecolab Inc. - ECL - close: 56.39 change: -0.37

Stop Loss: 53.45
Target(s): 57.00, 59.90
Current Gain/Loss: + 5.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/05 update: Conveniently ECL rallied toward $57.00 this morning and then reversed at $56.98. Shares eventually erased Friday's gains. Over the weekend I had suggested we sell half of our positions. Readers might want to exit the options completely since we have less than two weeks left before July options expire.

If ECL pulls back the stock should find some support near the $55.00 area. 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

07/02 Sell half. ECL @ 56.76 (+6.3%), Option @ $1.75 (+191.6%)
06/30 new stop loss @ 53.45
06/18 new stop loss @ 52.45
06/04 new stop loss @ 51.90

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


Interpublic Group - IPG - close: 12.75 change: +0.04

Stop Loss: 11.49
Target(s): 13.20
Current Gain/Loss: + 4.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/05 update: IPG was slowly marching higher until some profit taking in the last two hours of trading. IPG remains short-term overbought and I would expect a pull back soon. I am not suggesting new positions at this time. More conservative traders may want to use a stop closer to $12.00 instead.

Our plan was to keep our position size small. Our first target is $13.20 near the 2011 highs. FYI: We do not want to hold over the late July earnings report.

- small positions -

Current Position: Long IPG stock @ $12.17

- or -

Long Aug $12.00 call (IPG1120H12) Entry @ $0.85

07/02 new stop loss @ 11.49

Entry on June 29 at $12.17
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume: 7.5 million
Listed on June 28, 2011


Macy's Inc. - M - close: 29.60 change: -0.28

Stop Loss: 27.90
Target(s): 29.90, 32.25
Current Gain/Loss: + 4.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/05 update: Macy's rallied to resistance at $30.00 and reversed. This shouldn't be a surprise. My concern here is that a sell-off now would make this look like a bearish double top. On a short-term basis I am expecting a dip into the $29.00-28.50 area. Our final target remains $32.25 but cautious traders may want to exit our July calls completely right here. We have less than two weeks left on July options.

I am not suggesting new positions at this time. Our plan was to keep positions small to limit our risk.

- small positions -

Current Position: Long M stock @ $28.30

- or -

(short-term)
Long July $29 call (M1116G29) Entry @ $0.56

- or -

(a bit longer-term)
Long Aug. $30 call (M1120H30) Entry @ $0.85

07/02 new stop loss @ 27.90
07/01 1st Target Hit @ 29.90 (+5.6%), options @ +107.1% (July) & +52.9% (Aug)

Entry on June 28 at $28.30
Earnings Date 08/10/11 (unconfirmed)
Average Daily Volume: 8.6 million
Listed on June 27, 2011


Marsh & McLennan Companies - MMC - close: 31.48 change: -0.06

Stop Loss: 29.75
Target(s): 34.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Comments:
07/05 update: MMC saw a dip to $31.20 this morning but that wasn't low enough. I am suggesting a trigger to launch bullish positions at $31.00. More conservative traders may want to use an entry point in the $30.75-30.50 area instead. If triggered we'll use a stop at $29.75. Our target is $34.00 but that might be a little optimistic. MMC does not move super fast. We do not want to hold over the early August earnings report.

Trigger @ 31.00

Suggested Position: buy MMC stock @ 31.00

- or -

buy the Aug. $31 call (MMC1120H31)

Entry on July x at $xx.xx
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume: 3.4 million
Listed on July 2, 2011


Nanometrics Inc. - NANO - close: 19.74 change: -0.27

Stop Loss: 17.65
Target(s): 19.25, 22.00
Current Gain/Loss: +17.3%
Time Frame: 6 to 8 weeks or more
New Positions: see below

Comments:
07/05 update: NANO held up very well on Tuesday. The stock is very overbought and shares only fell -1.3%. If the market does see some profit taking this stock could easily fall toward $18.00 or lower. I am raising our stop loss again, this time to $17.65. Cautious traders may want to exit completely right here since the $20.00 level is resistance. Our final target remains $22.00.

FYI: NANO does have options but the spreads are so wide I wouldn't trade them.

Current Position: Long NANO stock @ $16.82

07/05 new stop loss @ 17.65
07/02 new stop loss @ 17.45. Consider an early exit right here @ $20.00
06/30 new stop loss @ 16.90
06/28 First Target hit @ 19.25 (+14.4%)
06/28 New stop loss @ 16.49

Entry on June 13 at $16.82
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume: 467 thousand
Listed on June 11th, 2011


UnitedHealth Group Inc. - UNH - close: 52.85 change: -0.28

Stop Loss: 49.85
Target(s): 54.75
Current Gain/Loss: + 3.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/05 update: UNH spent most of the session consolidating sideways under the $53.00 level. There is no change from my weekend comments. I would wait for a dip into the $51.00-50.00 area before launching new positions.

We do not want to hold over the July 19th earnings report.

- small positions -

Suggested Position: Long UNH stock @ $51.25

- or -

Long July $50 call (UNH1116G50) Entry @ $2.07

07/02 new stop loss @ 49.85

Entry on June 24 at $51.25
Earnings Date 07/19/11 (confirmed)
Average Daily Volume: 7.9 million
Listed on June 23, 2011


BEARISH Play Updates

Aon Corp. - AON - close: 51.53 change: -0.18

Stop Loss: 52.05
Target(s): 47.00
Current Gain/Loss: + 0.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/05 update: AON's intraday rally attempt struggled at the $51.80 level. This trade may not be over yet but I am not suggesting new positions at this time.

(small positions only)

Current Position: short AON stock @ 51.61

07/02 Readers may want to exit early with AON @ 51.75
06/18 adjusted exit target to $47.00
06/16 planned exit, June $50 put @ +11.1%
06/16 new stop loss @ 52.05
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


St. Jude Medical - STJ - close: 47.74 change: -0.84

Stop Loss: 50.05
Target(s): 47.00, 45.25
Current Gain/Loss: + 6.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/05 update: The oversold bounce in STJ appears to be reversing under technical resistance at its 30-dma. I'm 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

07/01 STJ has filled the gap just as expected
06/25 Adjusted final target to $45.25
06/23 1st target exceeded. Gap down at $46.50 (+8.8%)
06/23 new stop loss @ 50.05
06/16 exit June $50 put @ $1.95 (+95%)
06/15 prepare to exit our June $50 puts on Thursday at the close
06/04 New stop loss @ 51.05, added second target at $45.75
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