Editor's Note:
The stock market continues to extend its gains. Meanwhile we're seeing some action on our play list. CAKE hit our first profit target. CPHD hit our trigger to launch bullish positions. AON hit our stop loss.

-James

Current Portfolio:


BULLISH Play Updates

AMBEV - ABV - close: 33.89 change: -0.33

Stop Loss: 31.25
Target(s): 35.75, 37.75
Current Gain/Loss: unopened
Time Frame: 6 to 9 weeks
New Positions: Yes, see trigger

Comments:
07/07 update: It looks like ABV is starting to correct. Speaking of corrections I need to make one right here. I had this trade listed with two different entry points. We want to launch bullish positions on a dip at $33.25 with a stop loss at $31.25. More conservative traders could wait for a dip closer to the 50-dma instead as their entry point.

My biggest concern is that I can't find an earnings report date for this Brazilian company. If they report earnings and miss or disappoint while we're long the stock it could be very painful.

Trigger @ $33.25

Suggested Position: buy ABV stock @ $33.25

- or -

buy the Aug. $34 call (ABV1120H34)

Entry on July x at $xx.xx
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume: 6.3 million
Listed on July 5, 2011


American Express Co. - AXP - close: 53.59 change: +0.83

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:
07/07 update: Financial stocks were some of the best performers today. AXP rallied to a new multi-year high. Shares still look overbought given the rally so I wouldn't chase it. There is no change from my weekend comments.

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: 33.83 change: +0.67

Stop Loss: 30.75
Target(s): 33.60, 37.00
Current Gain/Loss: + 7.2%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
07/07 update: Target achieved. CAKE rallied toward resistance at $34.00 and stalled. Our first target to take profits was hit at $33.60. The plan was to exit our July calls completely while only taking some money off the table if you own the stock.

We should expect a pull back soon now that CAKE is at resistance. I am not suggesting new bullish positions at this time.

Current Position: Long CAKE stock @ $31.53

- or -

July $33 call (CAKE1116G33) Entry @ $0.75, exit 0.80 (+6.6%)

07/07 Target hit @ 33.60. CAKE +6.5%, option @ $0.80 (+6.6%)
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.

chart:

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


Cepheid - CPHD - close: 33.34 change: -1.77

Stop Loss: 31.85
Target(s): 33.00
Current Gain/Loss: + 1.0%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
07/07 update: Our new play on CPHD is already triggered. The stock was downgraded this morning and shares spiked lower to $32.60. Our trigger to launch bullish positions was hit at $33.00. I would still consider new positions now. Cautious traders may want to wait for a dip closer to support near $32.00 and the 50-dma instead.

Our target is $36.00. Aggressive traders could certainly aim higher but we don't want to hold over earnings in late July (date is unconfirmed).

NOTE: Readers may want to avoid the call options. The spreads are wide.

Current Position: Long CPHD stock @ $33.00

- or -

Long AUG $35 call (CPHD1120H35) entry @ $1.45

Annotated chart:

Entry on July 7 at $33.00
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 484 thousand
Listed on July 6, 2011


Dr. Pepper Snapple - DPS - close: 41.65 change: -1.16

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

Comments:
07/07 update: It is a little bit alarming to see DPS off -2.7% with the market in rally mode today. The relative weakness is due to a downgrade from Barclays citing valuation concerns. We have been expecting a pull back so our strategy is unchanged.

Our plan is to buy a dip near support at $41.25. 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: 56.64 change: +0.02

Stop Loss: 53.45
Target(s): --.--, 59.90
Current Gain/Loss: + 6.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/07 update: ECL tagged a new high and then reversed. Shares closed virtually unchanged on the session. This could be a sign of a top. I am suggesting we exit our July calls tomorrow (Friday) at the closing bell (assuming we don't see ECL hit our final target at $59.90). 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

07/07 Plan on exiting our July calls tomorrow at the close
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: 12.84 change: +0.25

Stop Loss: 11.49
Target(s): 13.20
Current Gain/Loss: + 5.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/07 update: IPG quickly rebounded after yesterday's dip and the stock added +1.9%. I am still concerned that IPG looks short-term overbought here. 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: 30.46 change: +1.59

Stop Loss: 27.90
Target(s): 29.90, 32.25
Current Gain/Loss: + 7.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/07 update: Macy's has soared past resistance at $30.00 on strong June same-store sales. Analysts were expecting +4.9% growth and M delivered +6.7%. This is a very bullish move and paves the way for a run at our final target of $32.25.

Please note that I am suggesting we exit the remainder of our July calls tomorrow at the closing bell.

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

07/07 plan on exiting July calls tomorrow at the close
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: 31.46 change: +0.36

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

Comments:
07/07 update: MMC is still consolidating sideways. Aggressive traders might want to consider launching small positions now or on a dip near $31.00. I am currently suggesting a buy-the-dip trigger at $30.65. 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 @ 30.65

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: 20.76 change: +0.99

Stop Loss: 17.65
Target(s): 19.25, 22.00
Current Gain/Loss: +23.4%
Time Frame: 6 to 8 weeks or more
New Positions: see below

Comments:
07/07 update: NANO was one of the market's best performers today. Shares saw an intraday rally to $21.56, a +9.0% move, but the rally faded to just +5.0%. I didn't see any headlines supporting this relative strength. The close over resistance at $20.00 is obviously bullish.

Our final exit target is $22.00. More aggressive traders may want to aim higher. I am not suggesting new positions at this time.

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: 52.63 change: -0.50

Stop Loss: 49.85
Target(s): 54.75
Current Gain/Loss: + 2.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/07 update: Healthcare stocks underperformed today. UNH saw a dip toward short-term support at $52.00 before paring its losses. 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

St. Jude Medical - STJ - close: 47.82 change: -0.07

Stop Loss: 50.05
Target(s): 47.00, 45.25
Current Gain/Loss: + 6.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/07 update: Relative weakness in healthcare-related stocks helped contribute to another failed rally in STJ today. Shares are struggling under their 30-dma. More conservative traders may want to lower their stop loss toward $49.00 or even $48.65 just in case the market rallies tomorrow following the jobs report. 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


CLOSED BEARISH PLAYS

Aon Corp. - AON - close: 51.83 change: +0.35

Stop Loss: 52.05
Target(s): 47.00
Current Gain/Loss: - 0.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/07 update: AON spiked higher this morning and briefly traded above resistance at its 100-dma and the $52.00 level. Our stop loss was hit at $52.05.

(small positions only)

Current Position: short AON stock @ 51.61

07/07 stopped out @ 52.05 (-0.8%)
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

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