Editor's Note:
Readers might want to start taking some money off the table on our successful bearish trades. The market is getting oversold and we are due for a bounce.

Current Portfolio:


BULLISH Play Updates

Cal-Maine Foods, Inc. - CALM - close: 37.11 change: -0.98

Stop Loss: 36.75
Target(s): 42.00
Current Gain/Loss: - 3.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/19 update: Ouch! Our new CALM trade is not looking very healthy with a sharp two-day reversal lower. Friday saw a close under its 10-dma. The four-week trend of higher lows is in jeopardy of being broken. The low on Friday was $36.90 and if stocks continue to sink on Monday we will likely see CALM hit our stop loss at $36.75.

Earlier Comments:
CALM could see a short squeeze. The most recent data listed short interest at 21.5% of a very small 13.8 million share float.

current Position: Long CALM stock @ $38.55

05/17/12 triggered at $38.55

chart:

Entry on May 17 at $38.55
Earnings Date 07/23/12 (unconfirmed)
Average Daily Volume = 123 thousand
Listed on May 16, 2011


SCANA Corp. - SCG - close: 45.87 change: -0.20

Stop Loss: 44.99
Target(s): 49.85
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Comments:
05/19 update: SCG is still slowly drifting lower. The larger trend is still bullish. So far shares are only down three out of the last four days. Nimble traders might want to consider buying a dip near the 50-dma with a tight stop loss. The newsletter will stick to our breakout plan. I am suggesting a trigger to launch small positions at $46.85. More conservative traders could use a stop closer to $46.00 instead.

Remember that SCG doesn't move very fast.

Trigger @ 46.85 (small positions)

Suggested Position: buy SCG stock @ (trigger)

chart:

Entry on May xx at $ xx.xx
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 607 thousand
Listed on May 14, 2011


BEARISH Play Updates

Acme Packet, Inc. - APKT - close: 22.63 change: -0.22

Stop Loss: 25.05
Target(s): 20.50
Current Gain/Loss: + 6.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/19 update: APKT tagged another new 52-week low with Friday's -0.9% decline. If you're long the puts you might want to go ahead and take profits soon (current bid $2.90, +52.6%). The $24 and $25 levels should be overhead resistance but when the market eventually bounces I'm expecting it to be a big one.

Please note our new stop loss at $25.05. I am not suggesting new positions. We will adjust our exit target down to $20.50.

Earlier Comments:
We also want to keep our position size small because the most recent data listed short interest at 17% of the 58.2 million-share float, which does raise the risk of a short squeeze. FYI: The Point & Figure chart for APKT is bearish with a $13.00 target.

(small positions)

Current Position: short APKT stock @ $24.18

- or -

Long Jun $25 PUT (APKT1216R25) Entry $1.90

05/19/12 new stop loss @ 25.05, adjust exit target to $20.50
05/17/12 new stop loss @ 25.55

chart:

Entry on May 14 at $24.18
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on May 12, 2011


American Railcar Ind. - ARII - close: 21.15 change: -0.08

Stop Loss: 23.55
Target(s): 20.05 or 18.55
Current Gain/Loss: + 4.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/19 update: Hmm... the major indices sank to new relative lows on Friday but ARII held almost steady on the session. Has the correction run out of steam? Is it time for an oversold bounce? If ARII does see a bounce the 200-dma near $22.80 should be resistance. I am not suggesting new positions at this time.

Earlier Comments:
We have two targets. Our conservative target is $20.05. Our aggressive target is $18.55. FYI: The Point & Figure chart for ARII is bearish with a long-term $14.00 target.

Suggested Position: short ARII stock @ $22.23

05/17/12 new stop loss @ 23.55

chart:

Entry on May 16 at $22.23
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 108 thousand
Listed on May 15, 2011


DeVry Inc. - DV - close: 28.64 change: -0.41

Stop Loss: 30.35
Target(s): 26.25
Current Gain/Loss: + 3.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/19 update: So far so good. DV continues to sink, hitting new multi-year lows on Friday. The $30.00 level should be overhead resistance. Our target is $26.25 but if the stock suddenly shoots lower readers may want to exit near the bottom of its bearish channel instead.

FYI: The Point & Figure chart for DV is bearish with a $19.00 target.

current Position: short DV stock @ $29.62

- or -

Long Jun $30 PUT (DV1216R30) Entry $1.35

05/17/12 new stop loss @ 30.35

chart:

Entry on May 14 at $29.62
Earnings Date 08/09/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on May 12, 2011


Fusion-io, Inc. - FIO - close: 19.72 change: +0.10

Stop Loss: 22.05
Target(s): 17.00
Current Gain/Loss: + 1.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/19 update: FIO opened higher on Friday morning at $20.09 and almost made it to its 10-dma before reversing lower. The trend still looks bearish and I would consider new positions but we want to keep our position size small. The market looks oversold and when it bounces it could be a big bounce.

Earlier Comments:
This is a higher-risk, aggressive trade. We want to keep our position size small because there has been some M&A rumors with FIO as a takeover target. Traders may want to limit their risk by using put options. FYI: The Point & Figure chart for FIO is bearish with a $16.00 target.

(small positions)

Suggested Position: short FIO stock @ $20.09

- or -

Long Jun $17.50 PUT (FIO1216R17.5) Entry $0.85

chart:

Entry on May 18 at $20.09
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 4.1 million
Listed on May 17, 2011


Foster Wheeler AG - FWLT - close: 18.74 change: -0.03

Stop Loss: 21.35
Target(s): 17.25
Current Gain/Loss: + 4.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/19 update: Hmmm... I'm suddenly cautious on FWLT. European stocks just produced their worst week of the year. Yet FWLT held its ground on Friday. Has the sell-off run out of steam? If the market (and FWLT) does see an oversold bounce the $20.00 level should be resistance for FWLT. I am not suggesting new positions at this time.

current Position: short FWLT stock @ $19.53

- or -

Long Jun $20 PUT (FWLT1216R20) Entry $1.40

chart:

Entry on May 17 at $19.53
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on May 16, 2011


General Motors - GM - close: 21.18 change: -0.43

Stop Loss: 22.65
Target(s): 19.25
Current Gain/Loss: + 1.8%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/19 update: GM ended the week at its lows and at four-month lows. The Buffett bounce from earlier in the week has been erased. The 20-dma seems to be holding as overhead resistance so we will lower our stop loss down to $22.65.

current Position: short GM stock @ $21.57

- or -

Long Jun $20 PUT (GM1216R20) Entry $0.39

05/19/12 new stop loss @ 22.65
05/15/12 after the closing bell it is discovered in a 13F filing that Berkshire Hathaway has initiated a position in GM.
Shares of GM are trading higher after hours.

chart:

Entry on May 15 at $21.57
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 10.5 million
Listed on May 14, 2011


Hospira Inc. - HSP - close: 31.87 change: -0.69

Stop Loss: 34.25
Target(s): 30.25
Current Gain/Loss: + 3.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/19 update: After consolidating sideways the last three days shares of HSP accelerated lower on Friday with a -2.1% decline. More conservative traders might want to consider inching down their stop loss.

FYI: Readers should note that HSP does have above average short interest. The most recent data listed short interest at 7.8% of the 165 million share float.

current Position: short HSP stock @ $32.95

- or -

Long Jun $30 PUT (HSP1216R30) Entry $0.35

05/14/12 opened on the gap down at $32.95, trigger was 33.20

chart:

Entry on May 14 at $32.95
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 9, 2011


Sohu.com - SOHU - close: 41.94 change: -1.23

Stop Loss: 45.55
Target(s): 40.50
Current Gain/Loss: + 6.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/19 update: The sell-off in SOHU accelerated on Friday with a -2.8% decline. We are adjusting our stop loss down to $45.55 and adjusting our exit target to $40.50. More conservative traders may want to take profits now, especially if you're holding the puts, which have a bid of $3.00 (+53.8%). I am not suggesting new positions at this time.

Earlier Comments:
I do consider this a more aggressive, higher-risk trade. We want to keep our position small because the most recent data listed short interest at almost 34% of the small 29.75 million-share float. Our target is $40.25.
FYI: The Point & Figure chart for SOHU is bearish with a $35.00 target.

current Position: short SOHU stock @ $44.90

- or -

Long Jun $42.50 PUT (SOHU1216R42.5) Entry $1.95

05/19/12 new stop loss @ 45.55, adjust exit to $40.50
05/17/12 new stop loss @ 46.25
05/14/12 triggered @ 44.90

chart:

Entry on May 14 at $44.90
Earnings Date 07/30/12 (unconfirmed)
Average Daily Volume = 915 thousand
Listed on May 10, 2011