Editor's Note:
It was one of the best one-day gains all year. Talk of a potential debt ceiling deal and better than expected earnings fueled the rally.

We saw our new trades on KMT and VNR opened.

-James

Current Portfolio:


BULLISH Play Updates

Cheesecake Factory Inc. - CAKE - close: 33.61 change: +0.91

Stop Loss: 31.90
Target(s): 33.60, 37.00
Current Gain/Loss: + 6.6%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
07/19 update: CAKE saw a strong surge today with a +2.7% gain. The stock appears to be breaking out from a bull flag pattern. Unfortunately tomorrow is our last day. The plan is to exit tomorrow (July 20th) at the closing bell to avoid holding over earnings. More conservative traders may want to exit immediately.

Current Position: Long CAKE stock @ $31.53

07/16 plan on exiting July 20th at the close
07/09 new stop loss @ 31.90
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.

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


Ecolab Inc. - ECL - close: 55.39 change: +0.38

Stop Loss: 53.90
Target(s): --.--, 59.90
Current Gain/Loss: + 3.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/19 update: Hmm... the bounce in ECL today (+0.69%) was less than half of that in the S&P 500 (+1.6%). That's worrisome. The short-term trend is still down while the longer-term trend is still up. I'd rather see more strength before considering new positions. Keep in mind that we do want to exit in front of the July 27th earnings report.

Current Position: Long ECL stock @ 53.35

07/19 Plan on exiting July 26th at the closing bell
07/09 new stop loss @ 53.90
07/08 planned exit. July $55 call @ $1.45 (+141.6%)
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 07/27/11 (confirmed)
Average Daily Volume: 1.5 million
Listed on May 18th, 2011


Globe Specialty Metals, Inc. - GSM - close: 24.76 change: +0.58

Stop Loss: 23.40
Target(s): 27.25, 29.50
Current Gain/Loss: - 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/19 update: Resource names were showing strength today and GSM gapped open higher. The stock eventually closed with a +2.3% gain but the rally failed intraday at the $25.00 mark. I remain cautiously bullish although the close over $24.60 could be used as a new entry point. The plan was to keep our positions small to limit our risk.

Earlier Comments:
We should consider this an aggressive, higher-risk trade so let's keep our position size small to limit risk. We can always add to positions down the road. FYI: The Point & Figure chart for GSM is bullish with a $28.50 target.

- SMALL positions -

Current Position: Long GMS stock @ $25.18

- or -

Long AUG $25 call (GSM1120H25) Entry @ $1.60

Entry on July 14 at $25.18
Earnings Date 09/15/11 (unconfirmed)
Average Daily Volume = 874 thousand
Listed on July 13, 2011


Kaiser Aluminum - KALU - close: 55.65 change: +1.85

Stop Loss: 51.90
Target(s): 59.75
Current Gain/Loss: + 3.9%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
07/19 update: The big rally in KALU today (+3.4%) looks like a breakout from its recent consolidation pattern. I am a little bit concerned that shares couldn't make it past $56 and that volume was light on the rally. Readers could still use this move as an entry point but keep in mind our plan to exit ahead of the July 27th earnings report. Cautious traders might want to raise their stop loss.

Earlier Comments:
Our target is the $59.75 mark since the $60 level looks like resistance. Investors could certainly aim higher. KALU has a high amount of short interest and the stock could experience a short squeeze. FYI: Investors should note that the most recent data listed short interest at 9.9% of the very small 18.5 million share float.

- Small Positions -

Current Position: Long KALU @ $53.56

- or -

Long AUG $55 call (KALU1120H55) Entry @ $1.30

Entry on July 11 at $53.56
Earnings Date 08/01/11 (unconfirmed)
Average Daily Volume = 183 thousand
Listed on July 9, 2011


Kennametal Inc. - KMT - close: 45.36 change: +1.72

Stop Loss: 42.30
Target(s): 49.00
Current Gain/Loss: + 2.7%
Time Frame: up to its earnings report 7/28
New Positions: see below

Comments:
07/19 update: Our new play in KMT is open. Both the stock and the S&P 500 opened higher this morning. KMT actually opened at $44.13 and rallied to a new 52-week high. If you don't want to chase it here you could look for a dip back into the $45.00-44.50 area instead.

Earlier Comments:
I do consider this a somewhat aggressive, higher-risk trade. More than one of KMT's technical indicators on the daily chart are at or nearing a bearish signal. Plus, the stock has resistance near the $45 level, which is where KMT failed two weeks ago. I suspect the stock will breakout to new highs if the market cooperates but we do not want to hold this position over the July 28th earnings report. We'll just plan on exiting in front of the earnings report. FYI: The Point & Figure chart for KMT is very bullish with an $80 target.

Current Position: Long KMT stock @ $44.13

Entry on July 19 at $44.13
Earnings Date 07/28/11 (confirmed)
Average Daily Volume = 826 thousand
Listed on July 18, 2011


Macy's Inc. - M - close: 30.14 change: +0.45

Stop Loss: 28.90
Target(s): 29.90, 32.25
Current Gain/Loss: + 6.5%
2nd Position Gain/Loss: + 0.9% Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/19 update: Macy's produced a +1.5% gain but has yet to breakout past its recent resistance. I am not suggesting new positions at this time. Our final target is $32.25 but we might consider adjusting this target higher.

Earlier Comments:
Our plan was to keep positions small to limit our risk.

- small positions -

Current Position: Long M stock @ $28.30

- or -

Long Aug. $30 call (M1120H30) Entry @ $0.85

- 2nd Position, entry 7/11/11 -

suggested position: Long M stock @ $29.86

Long Aug. $32 call (M1120H32) Entry @ $0.63

07/16 new stop loss @ 28.90
07/09 new stop loss @ 28.49
07/09 Add 2nd position, buy stock/calls now
07/08 Planned exit. July $29 call @ $1.50 (+167.8%)
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


Vanguard Natural Resources - VNR - cls: 30.47 chg: +0.09

Stop Loss: 28.99
Target(s): 33.25
Current Gain/Loss: - 0.4%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/19 update: Our play on VNR is now open but I would think twice about initiating new positions. We wanted to see both VNR and the S&P 500 opening higher this morning before we launch positions. That did happen. Shares opened at $30.61. Unfortunately the rally stalled and VNR's gains faded to less than a dime. I am concerned that VNR will now correct back toward $30.00 or its 200-dma. Readers may want to hesitate before launching new positions. Cautious traders might want to consider an alternative stop in the $29.30-29.40 area instead. Our target is $33.25.

Current Position: Long VNR stock @ $30.61

- or -

Long AUG $30 call (VNR1120H30) Entry @ $1.20

07/19 Play is opened @ 30.61
07/18 The requirements to launch positions was not met. Try again. Both VNR and the S&P 500 need to open higher tomorrow.

Entry on July 19 at $30.61
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 193 thousand
Listed on July 16, 2011


Western Refining Inc. - WNR - close: 21.20 change: +0.42

Stop Loss: 18.90
Target(s): 22.00, 24.50
Current Gain/Loss: + 8.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/19 update: WNR extended its gains with a +2.0% rally. Shares hit a new multi-year high. I am noticing a decline in its volume as the stock rises. I also want to remind readers WNR remains overbought here. I am adjusting our exit strategy. We'll take profits at $22.00 and at $24.50. I remain long-term bullish on WNR but we may have to trade in and out of this stock. We'll move our stop loss to $18.90.

Earlier Comments:
FYI: The Point & Figure chart for WNR is bullish with a $28.50 target. Plus, the most recent data listed short interest at 38% of the 54.2 million-share float. That's plenty of fuel for a short squeeze.

Current Position: Long WNR stock @ 19.50

- or -

Long AUG. $22 call (WNR1120H22) Entry @ $0.65

07/19 New stop loss @ 18.90. New targets @ 22.00 and $24.50

Entry on July 11 at $19.50
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on July 9, 2011


BEARISH Play Updates

OptionsXpress Holdings - OXPS - close: 15.38 change: +0.25

Stop Loss: 16.05
Target(s): 14.05, 13.65
Current Gain/Loss: - 0.9%
Time Frame: about 2 weeks
New Positions: see below

Comments:
07/19 update: I warned readers last night that Monday's intraday bounce could be a reversal. Shares still have overhead resistance near $15.50, near its 200-dma, and near $16.00. Wait for a failed rally before considering new positions.

Earlier Comments:
Our first target is $14.05 as the $14.00 level is likely support.

Current Position: short OXPS stock @ $15.24

- or -

Long AUG $15 PUT (OXPS1120T15) Entry @ $0.45

Entry on July 18 at $15.24
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 696 thousand
Listed on July 16, 2011


VanceInfo Technologies - VIT - close: 18.11 change: +0.86

Stop Loss: 20.15
Target(s): 15.15, 12.75
Current Gain/Loss: - 0.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/19 update: VIT managed to erase yesterday's loss with a big +4.9% gain. Volume was light on the rebound, which does not inspire any confidence if you're a bull. We already knew that VIT was a big oversold and due for a bounce. I would wait for this rebound to stall or reverse before initiating new positions.

Earlier Comments:
The most recent data listed short interest at more than 30% of the very small 23.6 million-share float. There is definitely reason to worry over a potential short squeeze, which explains the sharp oversold bounces. Thus readers may want to buy the puts to limit your risk instead of shorting the stock. FYI: The Point & Figure chart for VIT is bearish with a $6.00 target.

Current Position: short VIT stock @ $18.06

- or -

Long AUG $17.50 PUT (VIT1120T17.5) Entry @ $2.15

Entry on July 18 at $18.06
Earnings Date 08/15/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on July 16, 2011