Editor's Note:
The U.S. markets did not see a lot of follow through on yesterday's big rally. Meanwhile merger news with ECL ended our play early. Our CROX trade is open. Our CAKE trade is closed as planned. Traders need to be careful with our aggressive short on VIT.

-James

Current Portfolio:


BULLISH Play Updates

CROCS Inc. - CROX - close: 27.39 change: +0.25

Stop Loss: 25.85
Target(s): 29.90, 31.75
Current Gain/Loss: + 0.2%
Time Frame: up to its earnings report
New Positions: see below

Comments:
07/20 update: Our new play on CROX has been opened. The S&P 500 and the stock both opened higher this morning. CROX opened at $27.31 and then spent the rest of the day consolidating sideways. I don't see any changes from my earlier comments. I would still consider new positions here.

Earlier Comments:
There is a chance CROX could see a lot more short covering with shares nearing new multi-year highs. The most recent data listed short interest at 12.6% of the 83.9 million-share float. FYI: The Point & Figure chart for CROX is bullish with a $52.50 target.

Suggested Position: Long CROX stock @ $27.31

- or -

Long AUG $28 call (CROX1120H28) Entry @ $1.15

Entry on July 20 at $27.31
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on July 19, 2011


Globe Specialty Metals, Inc. - GSM - close: 24.39 change: -0.37

Stop Loss: 23.80
Target(s): 27.25, 29.50
Current Gain/Loss: - 3.1%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/20 update: I think readers may want to start looking for the exits in our GSM trade. For the second day in a row the stock has failed at resistance near $25.00. This is actually the third time in four trading days. I am moving our stop loss up to $23.80. I am not suggesting new positions at this time. 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

07/20 New stop loss @ 23.80

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: 55.89 change: +0.24

Stop Loss: 52.49
Target(s): 59.75
Current Gain/Loss: + 4.3%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
07/20 update: KALU extended its gains and closed at new two-year highs. Readers may want to wait for a dip near $55.00 before initiating new positions. We are planning to exit ahead of the July 27th earnings report. Please note our new stop loss at $52.49.

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

07/20 New stop loss @ 52.49

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: 44.67 change: -0.69

Stop Loss: 42.30
Target(s): 49.00
Current Gain/Loss: + 1.2%
Time Frame: up to its earnings report 7/28
New Positions: see below

Comments:
07/20 update: After hitting new record highs yesterday at $45.66, KMT pulled back a bit today. I would still consider new positions now or on a dip near $44.00.

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: 29.60 change: -0.54

Stop Loss: 28.90
Target(s): 29.90, 32.25
Current Gain/Loss: + 4.5%
2nd Position Gain/Loss: - 0.8% Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/20 update: Warning! The action in Macy's today was bearish. The early morning rally attempt quickly failed. Shares closed near the bottom of its recent trading range. The move looks like a bearish engulfing candlestick pattern. 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: 30.40 chg: -0.07

Stop Loss: 28.99
Target(s): 33.25
Current Gain/Loss: - 0.6%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/20 update: VNR consolidated sideways near its 100-dma most of the session. Readers can choose to buy this late day bounce or wait for a dip closer to the $29.50 area instead. 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: 21.04 change: -0.16

Stop Loss: 18.90
Target(s): 22.00, 24.50
Current Gain/Loss: + 7.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/20 update: WNR has been losing momentum the last couple of sessions. Cautious traders may want to take profits now. I am not suggesting new positions at this time. There is a good chance we'll see shares dip toward $20.35 or the $20.00 area.

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

07/20 expect a dip toward the $20.35 area.
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: 15.40 change: +0.02

Stop Loss: 16.05
Target(s): 14.05, 13.65
Current Gain/Loss: - 1.0%
Time Frame: about 2 weeks
New Positions: see below

Comments:
07/20 update: OXPS rallied to its simple 200-dma and reversed. This failure at technical resistance is a new bearish entry point.

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

07/20 Failure at the 200-dma is a new bearish entry point.

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: 19.27 change: +1.16

Stop Loss: 20.15
Target(s): 15.15, 12.75
Current Gain/Loss: - 6.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/20 update: The oversold bounce in VIT continues. Shares surged +6.4% probably due to the better than expected earnings from technology stocks last night and this morning. Of course any bounce in VIT gets a little boost from panicked shorts trying to cover. VIT is now testing overhead resistance in the $19.50-20.00 zone. I would wait for the rally to stall or reverse before initiating new bearish 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


CLOSED BULLISH PLAYS

Cheesecake Factory Inc. - CAKE - close: 32.69 change: -0.92

Stop Loss: 31.90
Target(s): 33.60, 37.00
Current Gain/Loss: + 3.6%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
07/20 update: CAKE gave back all of yesterday's gains with a -2.7% sell-off. Volume was pretty strong today too. It was our plan to exit at the close to avoid holding over earnings tonight. The company reported profits and revenues that were in-line with estimates and the stock is now trading lower in after hours near $31.

closed Position: Long CAKE stock @ $31.53, exit $32.69 (+3.6%)

07/20 planned exit (+3.6%)
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.

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


Ecolab Inc. - ECL - close: 51.31 change: -4.08

Stop Loss: 53.90
Target(s): --.--, 59.90
Current Gain/Loss: - 0.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/20 update: Choose your favorite curse word and use it at will. This morning, before the opening bell, ECL announced plans to merge/acquire Nalco for $5.4 billion. The actual value of the deal is about $8 billion after ECL assumes NLC's debt. ECL gains a water treatment business. Unfortunately, the acquirer usually sees its stock move lower on the news and that's exactly what happened today. ECL gapped open lower at $53.19 and then plunged to $50.03 intraday. Our stop loss was at $53.90 so the gap open immediately closed our trade.

closed Position: Long ECL stock @ 53.35, exit $53.19 (-0.3%)

07/20 Gap down on merger news. Exit @ 53.19 (-0.3%)
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

chart:

Entry on May 26 at $53.35
Earnings Date 07/27/11 (confirmed)
Average Daily Volume: 1.5 million
Listed on May 18th, 2011