Editor's Note:
Stocks managed to extend their gains. The market is up for the fifth day in the last six sessions.

Our GA trade saw a big bounce. The SLX continues to rise. Readers may want to take profits early in the AUXL trade.

Our shipping shorts are moving against us (again) and OSG was stopped out.

-James

Current Portfolio:


BULLISH Play Updates

Auxilium Pharma - AUXL - close: 17.67 change: -0.03

Stop Loss: 16.45
Target(s): --.--, 18.45
Current Gain/Loss: +9.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/30 update: AUXL did not make any progress today. Shares remain stuck under its 50-dma and the $18.00 level. I would seriously consider an early exit right here to lock in gains. The 10-dm has risen to $16.67. We will raise our stop loss to $16.45. 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

08/30 new stop loss @ 16.45
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: 22.28 change: +0.24

Stop Loss: 20.75
Target(s): 23.50, 24.40
Current Gain/Loss: + 1.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/30 update: It was AVP's turn to outperform. Traders bought the morning dip near $21.60 and the stock closed at a new two-week high. I remain cautious here in spite of today's bullish close. We are not suggesting new positions at this time. More conservative traders may want to raise their stops.

- small bullish positions -

Suggested Position: Long AVP stock @ $21.91

- or -

Long SEP $23 call (AVP1117I23) entry $0.50

08/23 new stop loss @ 7.55
08/23 adding a 2nd position
08/20 new stop loss @ 7.38

Entry on August 15 at $ 8.46
Earnings Date 11/16/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on August 13, 2011


Limited Brands, Inc. - LTD - close: 38.31 change: +0.59

Stop Loss: 34.49
Target(s): 39.75, 42.25
Current Gain/Loss: + 3.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
08/30 update: LTD continues to climb. The stock closed above potential resistance at $38.00 and its 100-dma today. We will raise our stop loss to $34.90. More conservative traders may want to use a stop loss closer to $36 instead. I would prefer to wait for a dip instead of buy LTD here.

Earlier Comments:
The $38 and $41 levels might offer some overhead resistance.

Current Position: Long LTD stock @ $37.06

- or -

Long OCT $38 call (LTD1122J38) Entry $1.85*

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: 58.02 change: -0.01

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

Comments:
08/30 update: PEET ended Tuesday's session virtually unchanged. Yet the action today was bearish. The intraday rally reversed at $59.36. I am concerned that PEET will now see a short-term dip back toward $56 or $54. I would wait for a dip near $56 before considering new 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: 14.77 change: -0.09

Stop Loss: 13.90
Target(s): 18.00
Current Gain/Loss: + 5.2%
Time Frame: 6 to 10 weeks
New Positions: see below

Comments:
08/30 update: I am growing concerned over the lack of movement in RLD. Shares have been trading sideways in a very narrow range for almost three full days. I am not suggesting new positions at this time. We will inch our stop loss up to $13.90.

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

08/30 new stop loss @ 13.90
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: 55.21 change: +0.31

Stop Loss: 51.75
Target(s): 54.50, 59.00
Current Gain/Loss: +10.4%
Time Frame: 2 to 6 weeks
New Positions: see below

Comments:
08/30 update: SLX managed to post another gain but it's still trading under the mid August highs near $56.00. Cautious traders may want to exit completely right here. I am raising our stop loss up to $51.75. 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

08/30 new stop loss @ 51.75
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

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: 18.29 change: +0.32

Stop Loss: 18.55
Target(s): 12.75, 10.50
Current Gain/Loss: - 7.7%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/30 update: Our bearish play on NAT is in significant danger. Yesterday I suggested readers may want to exit early. I'm making that same suggestion today. NAT's close over short-term resistance at $18.00 is bullish. If there is any follow through tomorrow we will likely see NAT hit our stop loss at $18.55.

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


CLOSED BEARISH PLAYS

Overseas Shipholding Group - OSG - close: 18.43 change: +1.12

Stop Loss: 17.55
Target(s): 12.50, 10.25
Current Gain/Loss: -14.3%
Time Frame: 6 to 12 weeks
New Positions: see below

Comments:
08/30 update: The short covering in OSG continues and the stock added another +6.4% today. Our stop loss was not hit this morning. It was surpassed with OSG gapped open higher at $17.75. The next level of resistance is probably the $20.00 area.

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

- Small Bearish Positions -

closed Position: short OSG stock @ $15.52, exit 17.75 (-14.3%)

- or -

Long OCT $14 PUT (OSG1122V14) Entry $1.50, exit 0.50* (-66.6%)

08/30 stopped out @ 17.75 (gap open higher)
*option did not trade today, this is an estimate.
08/27 Turn cautious. OSG did not break support at $15.00 on Friday.
08/22 gap open entry at $15.52

chart:

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