Editor's Note:
Stocks posted their third gain in a row but the market witnessed a sharp afternoon sell-off. This now looks like a potential failed rally and bearish reversal under resistance.

Traders should take defensive action. Consider raising your stop loss on bullish positions. We have updated a few stops below.

-James

Current Portfolio:


BULLISH Play Updates

Bristol-Myers Squibb - BMY - close: 31.24 change: +0.30

Stop Loss: 29.90
Target(s): 33.50
Current Gain/Loss: +0.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/27 update: BMY gapped open higher, like most of the market, and then spent the day moving sideways. If the market pulls back further then I would look for BMY to retest the $30.50-30.00 zone. A dip or a bounce in this area can be used as a new entry point. Please note that we are raising our stop loss to $29.90.

current Position: Long BMY stock @ $31.15

- or -

Long 2012 Jan. $30 call (BMY1221A30) Entry $2.26

09/27 new stop loss @ 29.90
09/26 trade opened

Entry on September 26 at $31.15
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 13.6 million
Listed on September 22, 2011


PowerShares Gold Double Long - DGP - close: 54.51 change: +2.31

Stop Loss: 49.40
Target(s): 59.00, 64.00
Current Gain/Loss: -1.3%
Time Frame: 8 to 10 weeks
New Positions: see below

Comments:
09/27 update: The price of gold and the DGP rallied just as we expected. Unfortunately the DGP gapped open higher this morning, which impacted our entry point. The recent action does look like a bullish reversal from support but readers may want to look for a dip into the $53-52.00 zone before opening new positions.

- Small Positions -

current Position: long the DGP @ $55.26

09/27 trade opened
09/26 reload this trade. Buy the open tomorrow, new stop 49.40
09/26 Trade opened on gap down at $51.96.
Trade stopped out at $51.45 (-0.9% loss)

Entry on September 27 at $55.26
Earnings Date --/--/--

1st Attempt:

Entry on September 26 at $51.96
Exit on September 26 at $51.45 (-0.9%)


Average Daily Volume = 1.3 million
Listed on September 24, 2011


Energy XXI Ltd. - EXXI - close: 23.58 change: +0.95

Stop Loss: 20.85
Target(s): 25.00
Current Gain/Loss: + 8.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/27 update: Readers may want to take profits now. EXXI is up more than +8% from our entry point. This trade had been up to about +11.5% midday but EXXI failed twice near the $24.25 level. It almost looks like a very short-term, intraday bearish double top pattern. I would expect a correction lower, probably down toward the $22.50-22.00 area. Thus, cautious traders may want to take profits now. We are not suggesting new positions at this time.

Earlier Comments:
NOTE: Technically you could argue that EXXI has broken down from a pennant-shaped consolidation pattern. That's bearish and another reason why we want to keep our position size pretty small to limit our risk.

Suggested Position: Long EXXI stock @ $21.75

- or -

Long OCT $23 call (EXXI1122J23) Entry $1.15

09/27 readers may want to take profits now
EXXI +8.4%, option bid @ $1.85 (+60.8%)

Entry on September 26 at $21.75
Earnings Date 10/26/11 (unconfirmed)
Average Daily Volume = 983 thousand
Listed on September 22, 2011


Human Genome Sciences Inc. - HGSI - close: 14.27 change: +0.03

Stop Loss: 12.89
Target(s): 16.25, 17.50
Current Gain/Loss: -0.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
09/27 update: HGSI posted another three-cent gain. The trend is up but the stock's progress has been slower than expected. Today's action looks like a potential failed rally under the $15.00 level. If the market corrects lower tomorrow then we could see HGSI dip toward the $13.50-13.00 zone. I am not suggesting new positions at this time.

(Small Positions)

Current Position: Long HGSI @ $14.31

- or -

Long OCT $15 call (HGSI1122J15) Entry $0.83

Entry on September 26 at $14.31
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on September 24, 2011


iShares Russell 2000 ETF - IWM - close: 67.80 change: +1.43

Stop Loss: 63.40
Target(s): 69.75
Current Gain/Loss: +5.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
09/27 update: Attention! Readers may want to take profits in our IWM trade immediately. This ETF rallied to $69.39 intraday before reversing at its 40-dma. Our target to exit has been $69.75. I am concerned that this may end up being a new lower low in a larger pattern of lower lows.

We are not suggesting new positions at this time. If you do not exit now then you might want to raise your stop closer to the $66.00 level. The newsletter is going to take the riskier approach to leave the trade open and leave our stop loss at $63.40 for now.

Suggested Position: Long IWM @ $64.25

- or -

Long NOV $68 call (IWM1119K68) Entry $2.69

09/27 readers may want to exit/take profits now
IWM (+5.5%), option bid @ $4.35 (+61.7%)
09/26 new stop loss @ 63.40

Entry on September 23 at $64.25
Earnings Date --/--/--
Average Daily Volume = 76.7 million
Listed on September 22, 2011


Red Hat Inc. - RHT - close: 44.72 change: +1.23

Stop Loss: 41.40
Target(s): 46.50, 48.00
Current Gain/Loss: +4.6%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/27 update: RHT continues to perform well. The stock added another +2.8% today. Shares may have gotten a boost from takeover rumors intraday. If you're looking for an entry point I'd wait for a dip or a bounce near the $43.00-42.00 area. Please note that we're raising our stop loss to $41.40.

Current Position: Long RHT stock @ $42.72

- or -

Long OCT $45 call (RHT1122J45) Entry $1.15

09/27 new stop loss @ 41.40

Entry on September 26 at $42.72
Earnings Date 12/21/11 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on September 24, 2011


Sturm, Ruger & Co. - RGR - close: 31.38 change: -0.10

Stop Loss: 29.90
Target(s): 36.00
Current Gain/Loss: - 2.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
09/27 update: Warning! The action in RGR today looks bearish. The stock market's strongly positive open helped RGR gap open higher at $32.15. Shares quickly hit our trigger to launch bullish positions at $32.25. Yet the rally failed near $32.50 and after hovering above resistance at $32.00 most of the day, shares collapsed and erased its gains for the session. I'm concerned this might be a "bull trap" pattern. I'd wait for a new bounce in the $31-30 zone or a new rally past $32.00 before considering new bullish positions.

Earlier Comments:
FYI: The Point & Figure chart for RGR is bullish with a $40 target. Traders will also want to note that the most recent data listed short interest at more than 11% of the very small 18 million-share float.

current Position: Long RGR @ 32.25

- or -

Long NOV $35 call (RGR1119K35) Entry $1.60

Entry on September 27 at $32.25
Earnings Date 11/02/11 (confirmed)
Average Daily Volume = 428 thousand
Listed on September 26, 2011


Silver Wheaton Corp. - SLW - close: 32.93 change: +0.66

Stop Loss: 30.45
Target(s): 37.00, 41.00
Current Gain/Loss: - 4.2%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/27 update: The price of silver rebounded sharply higher this morning. This silver strength, along with a bullish stock market this morning, helped SLW gap open higher. Unfortunately SLV could not hold these gains. The stock opened at $34.38, hit $34.61 intraday, and slipped under $33.00 by the closing bell. SLW ended with a +2.0% gain for the session but we're down -4.2% based on our entry point this morning.

We remain bullish on silver and SLW but the stock might see a dip into the $32-31 zone tomorrow. I would wait for a dip near $32.00 or better yet wait for a bounce before initiating new bullish positions.

*Small Positions*

current Position: Long SLW stock @ $34.38

- or -

Long OCT $35 call (SLW1122J35) Entry $1.70

09/27 trade opened on gap higher at $34.38

Entry on September 27 at $34.38
Earnings Date 11/08/11 (unconfirmed)
Average Daily Volume = 6.7 million
Listed on September 26, 2011


U.S. Oil ETF - USO - close: 32.37 change: +0.90

Stop Loss: 30.45
Target(s): 34.50
Current Gain/Loss: +5.4%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/27 update: Commodities saw a strong bounce today thanks in part to a strong euro pushing the dollar lower. The USO gapped higher at $32.12 and rallied to a +2.8% gain. I am concerned that the prior support near $33.00 could be short-term resistance for the USO. We're not suggesting new positions at this time. Wait for another dip or another bounce from the $31 area. Please note that we're raising our stop loss to $30.45.

current Position: Long the USO @ $30.71

- or -

Long NOV $32 call (USO1119K32) Entry $1.81

09/27 new stop loss @ 30.45
09/26 trade opened at $30.71
09/24 removed conditional entry, adjusted stop to $29.75.

Entry on September 26 at $30.71
Earnings Date --/--/--
Average Daily Volume = 10.7 million
Listed on September 22, 2011


BEARISH Play Updates

None. No bearish plays currently.


CLOSED BEARISH PLAYS

Greif, Inc. - GEF - close: 45.27 change: +1.23

Stop Loss: 45.60
Target(s): 44.00, 40.50
Current Gain/Loss: +2.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
09/27 update: The sharp market rally this morning was enough to push GEF past resistance at $44.00, at $45.00, and even the $46.00 level. Our stop loss was hit at $45.60.

*Small Bearish Positions*

closed Position: short GEF stock @ $46.93, exit $45.60 (+2.8%)

09/27 stopped out at $45.60
09/24 new stop loss @ 45.60
09/22 new stop loss @ 46.25
09/22 1st target hit at $44.00 (+6.2%)
09/21 new stop loss @ 48.55
09/19 new stop loss @ 49.55

chart:

Entry on September 12 at $46.93
Earnings Date 12/07/11 (unconfirmed)
Average Daily Volume = 247 thousand
Listed on September 10, 2011