Editor's Note:
A disappointing ISM Services report and weaker than expected same-store sales from the retailers fueled the selling pressure today.

I have removed BKE from the newsletter. WSM and GHL were triggered.

Current Portfolio:


BULLISH Play Updates

The Home Depot - HD - close: 52.47 change: -0.24

Stop Loss: 50.75
Target(s): 54.75
Current Gain/Loss: + 0.4%
Time Frame: exit prior to the May 15th earnings report
New Positions: see below

Comments:
05/03 update: The market's widespread pullback pushed HD to a -0.4% decline. The bullish trend remains intact for now. Look for support near $52.00 or the 20-dma near $51.40.

Our short-term target is $54.75 but we'll plan on exiting prior to the May 15th earnings report.

Suggested Position: Long HD stock @ $52.25

- or -

Long May $52.50 call (HD1219E52.5) Entry $0.85

04/27/12 triggered at $52.25

Entry on April 27 at $52.25
Earnings Date 05/15/12 (confirmed)
Average Daily Volume = 8.6 million
Listed on April 26, 2011


rue21, Inc. - RUE - close: 30.24 change: -1.25

Stop Loss: 29.75
Target(s): 33.50
Current Gain/Loss: - 0.0%
Time Frame: exit prior to the late May earnings report
New Positions: see below

Comments:
05/03 update: I could not find any April same-store sales release data from RUE today. I suspect that today's sell-off in this stock is merely a reaction to the wider weakness in the retailers due to disappointing monthly sales. Of course it doesn't matter why RUE reversed. Today's move is technically a bearish engulfing candlestick reversal pattern. If there is any follow through lower then we will likely be stopped out at $29.75. I am not suggesting new positions at these levels.

(small positions)

Suggested Position: Long RUE stock @ $30.25

- or -

Long May $30 call (RUE1219E30) Entry $1.70

05/01/12 new stop loss @ 29.75
04/26/12 new stop loss @ 29.10
04/17/12 triggered at $30.25

Entry on April 17 at $30.25
Earnings Date 05/24/12 (unconfirmed)
Average Daily Volume = 304 thousand
Listed on April 164, 2011


SeaDrill Limited - SDRL - close: 38.99 change: -0.12

Stop Loss: 37.40
Target(s): 41.50
Current Gain/Loss: + 2.0%
Time Frame: up to the late May earnings report
New Positions: see below

Comments:
05/03 update: Shares of SDRL held up pretty well only losing 12 cents on the session. I would not be surprised to see a dip back toward the 10 or 50-dma near $38.50-38.30ish. Readers may want to wait for that dip before considering new positions.

We do not want to hold over the very late May earnings report (end of the month).

Suggested Position: Long SDRL stock @ $38.65

- or -

Long Jun $40 call (SDRL1216F40) Entry $0.65

04/30/12 triggered at $38.65

Entry on April 30 at $38.65
Earnings Date 05/31/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on April 28, 2011


Teva Pharma - TEVA - close: 45.39 change: -0.35

Stop Loss: 44.45
Target(s): 49.50
Current Gain/Loss: - 1.8%
Time Frame: exit prior to the May 9th earnings report
New Positions: see below

Comments:
05/03 update: TEVA has not closed under short-term technical support at its rising 10-dma in several days. That makes today's performance bearish and a warning signal for traders. Readers may want to raise their stop loss. I am not suggesting new positions with TEVA below $46.00. We do not want to hold over the May 9th earnings report.

current Position: Long TEVA stock @ $46.25

- or -

Long May $45 call (TEVA1219E45) Entry $1.65

05/01/12 triggered at $46.25

Entry on May 01 at $46.25
Earnings Date 05/09/12 (confirmed)
Average Daily Volume = 3.3 million
Listed on April 25, 2011


U.S. Bancorp - USB - close: 31.94 change: -0.10

Stop Loss: 30.90
Target(s): 34.75
Current Gain/Loss: - 0.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/03 update: USB only lost 10 cents today and held up better than many of its peers. I am somewhat worried that the intraday reversal from its highs on Tuesday is going to paint a bearish reversal candlestick on the weekly chart. The stock did test short-term technical support at its 10-dma today. A bounce from here would be bullish. Or you may want to stay cautious and wait for a bounce off the $31.50 area instead.

Our target is $34.75 but more aggressive traders could aim higher.

current Position: Long USB stock @ $32.25

- or -

Long May $32 call (USB1219E32) Entry $0.70

05/01/12 triggered @ 32.25

Entry on May 01 at $32.25
Earnings Date 07/18/12 (unconfirmed)
Average Daily Volume = 10.3 million
Listed on April 30, 2011


Williams Sonoma Inc. - WSM - close: 39.78 change: -0.17

Stop Loss: 38.40
Target(s): 44.00
Current Gain/Loss: - 1.0%
Time Frame: exit prior to the mid May earnings report
New Positions: see below

Comments:
05/03 update: I have to warn you that today's action in WSM is bearish. The stock spiked higher at the open, hitting $40.76 intraday, only to reverse quickly and close back under resistance at the $40.00 level. This failed breakout is a bull trap pattern. Unfortunately WSM hit our trigger to launch positions at $40.15. Our trade is open but I am not suggesting new positions at this time. If shares do pullback I would expect a dip toward $39.00 and its 10-dma.

Suggested Position: buy WSM stock @ $40.15

- or -

Long May $40 call (WSM1219E40) Entry $1.50

05/03/12 triggered at $40.15

Entry on May 03 at $40.15
Earnings Date 05/17/12 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on April 28, 2011


BEARISH Play Updates

American Public Education - APEI - close: 31.90 change: -1.10

Stop Loss: 34.55
Target(s): 31.50
Current Gain/Loss: + 8.2%
Time Frame: up to its May 10th earnings report
New Positions: see below

Comments:
05/03 update: Shares of APEI are accelerating lower. Readers may want to start taking profits now. I am adjusting our exit target to $31.50 and our stop loss down to $34.55. I'm not suggesting new positions at this time.

Earlier Comments:
The plan was to limit our risk with small positions. Our exit target is $31.00 but we do not want to hold over the May 10th earnings report. This is a higher-risk trade. Lots of investors think APEI is going lower and the most recent data listed short interest at 20% of the very small 16.8 million share float. That does raise the risk of a short squeeze. You may want to limit your exposure by trading options.

(small positions)

Suggested Position: short APEI stock @ $34.75

- or -

Long May $35 PUT (APEI1219Q35) Entry $2.10

05/03/12 new stop loss @ 34.55, adjust exit to $31.50, readers may want to take profits now!
05/02/12 new stop loss @ 35.05, readers may want to take profits now
05/01/12 new stop loss @ 35.55
04/28/12 new stop loss @ 36.05
04/23/12 new stop loss @ 36.60
04/19/12 triggered at $34.75

Entry on April 19 at $34.75
Earnings Date 05/10/12 (unconfirmed)
Average Daily Volume = 202 thousand
Listed on April 18, 2011


Greenhill & Co. - GHL - close: 36.86 change: -1.19

Stop Loss: 39.25
Target(s): 34.25
Current Gain/Loss: + 1.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/03 update: Our new bearish trade on GHL is off to a good start. Shares are breaking down to new relative lows. The stock hit our trigger to launch positions at $37.25.

Earlier Comments:
We do want to keep our position size small since being short GHL is a popular trade. The most recent data listed short interest at 18.5% of the small 26.8 million share float. That does raise the risk of a short squeeze.
FYI: The Point & Figure chart for GHL is bearish with a $29 target.

(small positions)

current Position: short GHL stock @ 37.25

05/03/12 triggered @ 37.25

Entry on May 03 at $37.25
Earnings Date 07/18/12 (unconfirmed)
Average Daily Volume = 508 thousand
Listed on May 2, 2011


Groupon, Inc. - GRPN - close: 10.31 change: -0.27

Stop Loss: 11.75
Target(s): 7.50
Current Gain/Loss: + 4.5%
Time Frame: exit prior to May 14th earnings report
New Positions: see below

Comments:
05/03 update: Groupon continues to underperform. The stock temporarily broke support at the $10.00 mark before bouncing back to end the session down -2.5%. The $10.00 level could be round-number, psychological support. If the stock was going to see an oversold bounce this is a good spot for the bounce to show up. I am not suggesting new positions at this time. Remember this is an aggressive, higher-risk trade.

Earlier Comments:
Investors are unhappy with management, worried about earnings, and concerned that the upcoming lock up expiration could put even more pressure on the stock. The lock up period expires on June 1st (delayed from May 2nd). I do consider this an aggressive, higher-risk trade. The trend is down but GRPN is definitely oversold at this point. We want to use small positions to limit our risk. Readers may want to use options to limit their risk even further. We do not want to hold over the May 14th earnings report.

(Small positions)

Suggested Position: short GRPN stock @ $10.80

- or -

Long May $10 put (GRPN1219Q10) Entry $0.90

Entry on May 02 at $10.80
Earnings Date 05/14/12 (confirmed)
Average Daily Volume = 2.6 million
Listed on May 01, 2011


Hi Tech Pharmacal - HITK - close: 33.04 change: -0.16

Stop Loss: 35.05
Target(s): $30.50
Current Gain/Loss: + 4.0%
Time Frame: 2 to 4 weeks
New Positions: see below

Comments:
05/03 update: HITK tried to see some follow through on yesterday's bounce but the stock reversed at its 20-dma. I remain cautious here. More conservative traders may want to exit early and lock in a profit now. I am not suggesting new positions at this time.

There is potential support near $32.00 and its 300-dma but we're currently aiming for $30.50.

current Position: short HITK stock @ $34.40

04/21/12 new stop loss @ 35.05, adjust exit target to $30.50
04/19/12 planned exit for our April put: $1.30 (-13.3%)
04/18/12 prepare to exit our April $35 puts at the close tomorrow
04/14/12 new stop loss @ 35.55
04/10/12 triggered at $34.40

Entry on April 10 at $34.40
Earnings Date 07/05/12 (unconfirmed)
Average Daily Volume = 155 thousand
Listed on April 09, 2011


Quality Systems - QSII - close: 37.82 change: -0.32

Stop Loss: 39.15
Target(s): 34.50
Current Gain/Loss: + 1.3%
Time Frame: exit prior to the late May earnings report
New Positions: see below

Comments:
05/03 update: The early morning rally attempt in QSII ran out of gas. Shares faded to a -0.8% decline. Lack of follow through on yesterday's bullish reversal is good news but I remain cautious. I am not suggesting new positions at this time.

Earlier Comments:
I do see potential support at $36.00 and $34.00 and we are going to set our exit target at $34.50 but we plan to exit prior to the late May earnings report. Readers may want to use small positions. The most recent data listed short interest at 12% of the relatively small 39.4 million share float so that does raise the risk of a possible short squeeze.

current Position: short QSII stock @ $38.33

- or -

Long May $40 PUT (QSII1219Q40) Entry $1.90

05/02/12 Caution! QSII produced a bullish reversal candlestick today. Readers may want to exit early now. new stop loss at $39.15.

Entry on April 26 at $38.33
Earnings Date 05/24/12 (unconfirmed)
Average Daily Volume = 476 thousand
Listed on April 25, 2011


St. Jude Medical - STJ - close: 38.51 change: -0.32

Stop Loss: 40.05
Target(s): 34.25
Current Gain/Loss: - 2.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/03 update: Shares of STJ trended lower but now prior resistance at the 10-dma is new support. I remain cautious here. I'm not suggesting new positions. More conservative traders may want to just exit early now.

Our target is $34.25. FYI: The Point & Figure chart for STJ is bearish with a $31.00 target.

current Position: short STJ stock @ $37.45

- or -

Long May $37.50 PUT (STJ1219Q37.5) Entry $1.20

04/23/12 new stop loss @ 40.05
04/23/12 triggered at $37.45

Entry on April 23 at $37.45
Earnings Date 04/18/12
Average Daily Volume = 5.1 million
Listed on April 21, 2011


CLOSED BULLISH PLAYS

Buckle Inc. - BKE - close: 43.84 change: -3.53

Stop Loss: 45.40
Target(s): 52.50
Current Gain/Loss: unopened
Time Frame: exit prior to the mid May earnings report
New Positions: see below

Comments:
05/03 update: Surprise! Several major brands reported their April same-store sales figures this morning. Wall Street was expecting BKE to deliver +2.8% growth. The company announced this morning that monthly same-store sales only rose +1%. This news sparked a sharp sell-off in shares and BKE has crashed through several layers of short-term support.

Our plan was to launch bullish positions if the stock hit $47.65. That is unlikely to happen any time soon so I am removing BKE from our newsletter. The trade never opened.

Trigger @ 47.65

Trade never opened.

chart:

Entry on May xx at $ xx.xx
Earnings Date 05/17/12 (unconfirmed)
Average Daily Volume = 509 thousand
Listed on May 2, 2011