Editor's Note:
It was a good day to be a bull. Stocks surged. Targets were hit. ALXN and RGR hit our final targets. While SLX hit our first profit target.

We need to be careful with the shipping stock shorts. Both of them look ready to hit our stop losses.

-James

Current Portfolio:


BULLISH Play Updates

Auxilium Pharma - AUXL - close: 17.70 change: +0.59

Stop Loss: 16.25
Target(s): --.--, 18.45
Current Gain/Loss: +9.7%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/29 update: AUXL managed to outperform the NASDAQ with its +3.4% gain. The stock is nearing potential resistance at $18.00 and its 50-dma. More conservative traders may want to lock in a profit now. I am raising our stop loss to $16.25. Thus I am not suggesting new positions at this time.

Given the market's recent volatility we do want to keep our position size small.

Current Position: Long AUXL stock @ $16.13

- or -

Long SEP $17.50 call (AUXL1117I17.5) Entry $0.45

08/29 new stop loss @ 16.25
08/27 new stop loss @ 15.75
08/27 adjusted target to $18.45.
08/25 Planned exit to sell half. AUXL @ 17.07 (+5.8%)
sold half of Sep. $17.50 call, bid @ 0.60 (+33.3%)
08/24 Take profits (sell half) Tomorrow at the close
08/24 new stop loss @ 15.25
08/23 new stop loss @ 14.95.
08/23 added 2nd target at $19.75

Entry on August 22 at $16.13
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on August 20, 2011


Avon Products Inc. - AVP - close: 22.04 change: +0.36

Stop Loss: 20.75
Target(s): 23.50, 24.40
Current Gain/Loss: + 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/29 update: Gains in AVP were pretty meager with a +1.6% gain today. The stock is struggling with resistance at the $22.00 level. Readers may want to consider just exiting AVP positions now to free up cash to buy something else.

The high today was $22.26. If you're still bullish on AVP then my suggestion to wait for a move past the $22.25 area could still work as an entry point.

- small bullish positions -

Suggested Position: Long AVP stock @ $21.91

- or -

Long SEP $23 call (AVP1117I23) entry $0.50

08/29 *option did not trade. this is an estimate.

Entry on August 29 at $37.06
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 4.9 million
Listed on August 27, 2011


Peet's Coffee & Tea - PEET - close: 56.14 change: +2.12

Stop Loss: 53.25
Target(s): 62.00
Current Gain/Loss: +2.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/29 update: PEET is off to a strong start. Shares gapped open higher at $56.64 and then rallied to a +3.3% gain. The stock spent most of its Monday churning sideways underneath resistance at the $58.00 level and its 50-dma. I suspect there is a good chance we'll see PEET pull back and dip into the $57-56 zone. You may want to wait for that dip before launching positions.

Earlier Comments:
There is a good chance that PEET could see another short squeeze. The most recent data listed short interest at 23.7% of the very small 12.6 million-share float. I would keep our position size small. We are not trading the options. The spreads are too wide.

Current Position: Long PEET stock @ $56.64

Entry on August 29 at $56.64
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 268 thousand
Listed on August 27, 2011


RealD Inc. - RLD - close: 14.86 change: +0.15

Stop Loss: 13.75
Target(s): 18.00
Current Gain/Loss: + 5.8%
Time Frame: 6 to 10 weeks
New Positions: see below

Comments:
08/29 update: The action in RLD today was rather disappointing. Shares only gained +1.0% versus +2.8% for the S&P 500 index. The lack of participation is a bit worrisome. I am not suggesting new positions at this time.

Earlier Comments:
We want to use small positions to limit our risk.

current Position: Long RLD stock @ $14.04

- or -

Long SEP $15.00 call (RLD1117I15) Entry $0.60

08/27 new stop loss @ 13.75
08/25 planned exit to sell half at the close.
RLD +4.0%, option @ $0.90 (+50%)
08/24 Prepare to take profits early and sell half tomorrow at the closing bell.
08/24 new stop loss at $13.25
08/22 gap open entry at $14.04

Entry on August 22 at $14.04
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on August 20, 2011


Steel ETF - SLX - close: 54.90 change: +2.24

Stop Loss: 49.40
Target(s): 54.50, 59.00
Current Gain/Loss: +9.8%
Time Frame: 2 to 6 weeks
New Positions: see below

Comments:
08/29 update: Target achieved. Industrial names were strong performers on Monday. The SLX rallied +4.2%. Shares ended the day right at resistance near $55 and its mid August highs. I would not be surprised to see some profit taking tomorrow.

In the weekend newsletter we had adjusted our first profit target to $54.50 and our second target to $59.00. I am not suggesting new positions at this time.

The plan was to keep our position size small to limit our risk.

Play Triggered.

Suggested Position: Long this ETF @ $50.00

- or -

Long SEP $55 call (SLX1117I55) Entry $0.90

08/29 1st target hit at $54.00.
stock position at $54.00 (+8.0%)
08/27 adjusted targets to $54.50 and $59.00
08/26 Play triggered at $50.00
08/25 new strategy: buy a dip at $50.00, new stop 49.40

chart:

Entry on August 26 at $50.00
Earnings Date --/--/--
Average Daily Volume = 126 thousand
Listed on August 23, 2011


BEARISH Play Updates

Nordic American Tanker - NAT - close: 17.97 change: +0.64

Stop Loss: 18.55
Target(s): 12.75, 10.50
Current Gain/Loss: - 5.4%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/29 update: It was not a good day to be a bear. The oversold shipping stocks are bouncing. NAT is testing resistance at the $18.00 level. More conservative traders may want to exit now or lower their stop loss. I am not suggesting new positions at this time.

Earlier Comments:
You may want to consider using put options instead since your risk is limited to the cost of the put you purchase.

- small positions -

Current Position: short NAT stock @ $17.05

- or -

Long OCT $15 PUT (NAT1122V15) Entry $0.75*

08/24 NAT provides another entry point with failed rally at $18
08/22 gap open entry @ 17.05
* option entry is an estimate. option did not trade today

Entry on August 22 at $17.05
Earnings Date 11/07/11 (unconfirmed)
Average Daily Volume = 583 thousand
Listed on August 20, 2011


Overseas Shipholding Group - OSG - close: 17.31 change: +1.50

Stop Loss: 17.55
Target(s): 12.50, 10.25
Current Gain/Loss: -11.5%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/29 update: The market's surge higher at the open prompted some short covering in OSG. The stock outperformed today with a +9.4% gain. The breakout past $16.00 is short-term bullish. If there is any follow through higher tomorrow we will most likely get stopped out at $17.55.

This is just an oversold bounce. If we do get stopped out I would keep OSG on your watch list. Eventually the bearish fundamentals in the shipping industry will reassert themselves.

We are not suggesting new positions at this time. The plan was to keep our position size small to limit our risk.

- Small Bearish Positions -

Current Position: short OSG stock @ $15.52

- or -

Long OCT $14 PUT (OSG1122V14) Entry $1.50

08/27 Turn cautious. OSG did not break support at $15.00 on Friday.
08/22 gap open entry at $15.52

Entry on August 22 at $15.52
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 981 thousand
Listed on August 20, 2011


CLOSED BULLISH PLAYS

Alexion Pharmaceuticals - ALXN - close: 57.02 change: +2.34

Stop Loss: 51.40
Target(s): --.--, 57.00
Current Gain/Loss: +12.5%
Time Frame: 2 to 5 weeks
New Positions: see below

Comments:
08/29 update: Target achieved. ALXN surged to a +4.2% gain and managed to close above the $57.00 level this afternoon. Our final target happens to be the $57.00 mark. ALXN is looking a little short-term overbought here. I would not launch new positions but readers may want to keep it on your watch list.

Our plan was to keep our position size small to limit our risk.

closed Position: ALXN stock @ $50.67 , exit $57.00 (+12.49%)

- or -

SEP $55 call (ALXN1117I55) Entry $1.40, exit $3.00 (+114.2%)

08/29 target hit at $57.00
08/27 new stop loss @ 51.40
08/25 Sold Half @ 53.49 (+5.5%) -stock only, not the option
08/24 new stop loss @ 49.45
08/24 Take profits now. Sell half at the open tomorrow. ALXN is currently up +5.6% (stock only). We'll leave our option position unchanged. Current bid is $1.40 (+0.0%)
08/15 new stop loss @ 47.90
08/12 trade is open.
08/11 open positions if ALXN and S&P500 are positive Friday morning
08/09 new entry point strategy, new stop loss, new targets.

chart:

Entry on August 12 at $50.67
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on August 8, 2011


Sturm Ruger & Co - RGR - close: 34.11 change: +1.55

Stop Loss: 29.75
Target(s): 33.75
Current Gain/Loss: +11.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/29 update: Target achieved. RGR surged to another new all-time high. Our target was hit at $33.75 early this morning. Our play is closed but I would keep RGR on your watch list for a significant pull back and then reconsider new bullish positions. Shares are currently overbought.

closed Position: Long RGR stock @ 30.25, exit 33.75 (+11.5%)

- or -

SEP $30 call (RGR1117I30) Entry $1.95, exit $3.90 (+100%)

08/29 target hit @ 33.75
08/27 new stop loss @ 29.75, cautious traders may want to take profits now
08/22 RGR gaps open higher at $30.25 (entry point)

chart:

Entry on August 22 at $30.25
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 310 thousand
Listed on August 20, 2011