Editor's Note:
Industrial and energy stocks were both hit with profit taking on Friday thanks to the jobs data and stronger fears of a new recession. Yet both of our DIG and SLX trades are still open. We did see AUXL and LTD get stopped out.

Don't forget that September options expire in nine trading days.

-James

Current Portfolio:


BULLISH Play Updates

Avon Products Inc. - AVP - close: 21.48 change: -0.64

Stop Loss: 21.40
Target(s): 23.50, 24.40
Current Gain/Loss: - 1.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/03 update: AVP gapped open lower on Friday and then trended lower the rest of the session. The intraday low was $21.43. If there is any follow through lower on Tuesday we'll be stopped out at $21.40. The biggest risk now is a gap down at the open on Tuesday. I am not suggesting new bullish positions on AVP at this time.

- small bullish positions -

Suggested Position: Long AVP stock @ $21.91

- or -

Long SEP $23 call (AVP1117I23) entry $0.50

08/31 new stop loss @ 21.40
08/27 new stop loss @ 20.75
08/20 new stop loss at $19.95

chart:

Entry on August 17 at $21.91
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 5.1 million
Listed on August 15, 2011


Ultra Oil & Gas ETF - DIG - close: 40.93 change: -2.35

Stop Loss: 39.40
Target(s): 48.50
Current Gain/Loss: -2.1%
Time Frame: 2 to 6 weeks
New Positions: see below

Comments:
09/03 update: The jobs number definitely had an impact on the energy sector. The weak jobs data fueled fears of a recession. A recession means less demand for oil. Oil prices dropped on Friday, which weighed on the energy stocks. The DIG gapped open lower at $41.34 and fell toward round-number support at $40.00 before closing with a -5.4% loss.

My Thursday comments suggested waiting for a new bounce from $40.00 before considering new bullish positions.

The plan was to keep our position size small.

Current Position: long DIG @ $41.82

08/30 new stop loss @ 39.40
08/29 trade opened. DIG opened at $41.82
08/27 new stop loss @ 36.90
08/27 removing the option - spreads are too wide
08/27 We are switching back to our original entry strategy. Open positions on Monday morning if DIG and S&P500 open positive.
08/25 New strategy: buy a dip at $36.00 instead, new stop loss at $35.45
08/24 Readers may want to wait on launching new positions until after we see the market's reaction to Bernanke's comments on Friday.

chart:

Entry on August 29 at $41.82
Earnings Date --/--/--
Average Daily Volume = 1.4 million
Listed on August 23, 2011


Giant Interactive Group Inc. - GA - close: 7.76 change: -0.24

Stop Loss: 7.55
Target(s): 9.30
Current Gain/Loss: -8.2%
2nd position Gain/Loss: -2.0%
Time Frame: exit on Sep. 9th or earlier
New Positions: see below

Comments:
09/03 update: We only have four trading days left! The plan is to exit before GA's ex-dividend date, which is September 12th (Monday). If we don't get stopped out before then we will plan on exiting Friday, Sep. 9th.

No new positions at this time. Nimble traders may want to buy a dip or a bounce near the 50-dma.

Earlier Comments:
GA does have a big dividend ($3.00) coming up. The shareholder record date is August 31st while the stock will begin trading ex-dividend (-$3.00) on September 12th. We will plan on exiting in front of that ex-dividend date.

Readers should consider this a higher-risk, more aggressive trade. We want to keep our position size small to limit our risk.

Current Position: Long GA stock @ $8.46

- or -

Long SEP $7.50 call (GA1117I7.5) Entry $0.95

- Add 2nd position - entry on 08/24/11

Second Position (small): Long GA stock @ 7.92

Long SEP $7.50 call (GA1117I7.5) Entry $0.65

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

chart:

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


Peet's Coffee & Tea - PEET - close: 55.35 change: -0.95

Stop Loss: 53.25
Target(s): 62.00
Current Gain/Loss: -2.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/03 update: PEET saw a spike lower on Friday morning but traders bought the dip near $54 and its 100-dma. I would be tempted to buy another dip near $54.00 should we see one on Tuesday. Cautious traders may want to cinch up their stop loss near the $54 level.

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

chart:

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


Steel ETF - SLX - close: 52.96 change: -2.13

Stop Loss: 52.40
Target(s): 54.50, 59.00
Current Gain/Loss: + 5.9%
Time Frame: 2 to 6 weeks
New Positions: see below

Comments:
09/03 update: Industrial names were hit hard by profit taking on Friday and worries over a new recession thanks to the jobs data. The SLX gapped open lower at $53.79 and then dropped to $52.47. Shares closed down -3.8%. Our stop loss remains at $52.40 so any follow through lower on Tuesday will probably close this trade. More aggressive traders may want to place their stop loss under $52.00. I would be tempted to launch new positions if we see SLX start to bounce on Tuesday morning.

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

08/31 new stop loss @ 52.40
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

chart:

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


BEARISH Play Updates

None. No bearish plays currently.


CLOSED BULLISH PLAYS

Auxilium Pharma - AUXL - close: 16.40 change: -0.36

Stop Loss: 16.45
Target(s): --.--, 18.45
Current Gain/Loss: +1.9%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/03 update: AUXL gapped open lower at $16.50 on Friday. The stock quickly hit our stop loss at $16.45. The plan was to keep our position size small to limit our risk.

closed Position: Long AUXL stock @ $16.13, exit $16.45 (+1.98%)

- or -

SEP $17.50 call (AUXL1117I17.5) Entry $0.45, exit $0.15 (-66.6%)

09/02 stopped out @ 16.45
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

chart:

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


Limited Brands, Inc. - LTD - close: 35.85 change: -1.22

Stop Loss: 35.75
Target(s): 39.75, 42.25
Current Gain/Loss: - 3.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/03 update: The last three days have been pretty negative for LTD. The stock received no love for the company's better than expected August same-store sales. Friday saw shares gap open lower at $36.20 and then dip to $35.73. Our stop loss happened to be at $35.75 so the play is closed.

LTD's long-term trend is still higher but short-term it looks like LTD is headed for support near $35 and its 200-dma. I would wait for a dip near $35 or a bounce from this area before considering new bullish positions.

closed Position: Long LTD stock @ $37.06, exit 35.75 (-3.5%)

- or -

OCT $38 call (LTD1122J38) Entry $1.85*, exit $1.10 (-40.5%)

09/02 stopped out @ 35.75
08/31 new stop loss @ 35.75
08/29 *option did not trade. this is an estimate.

chart:

Weekly chart:

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