Editor's Note:
Investors were either weary of the headlines or lacking conviction on Friday. Or maybe they were just looking ahead to the long holiday weekend. Whatever the case the trading action on Friday was relatively quiet.

We did see XCO and NTGR triggered. CBD was stopped out. We want to exit GM on Monday morning. I have removed T.

Current Portfolio:


BULLISH Play Updates

Market Leader, Inc. - LEDR - close: 4.46 change: -0.05

Stop Loss: 3.95
Target(s): 6.00
Current Gain/Loss: + 2.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/26 update: LEDR spiked to a new high at $4.56 before paring its gains and eventually succumbing to profit taking (-1.1%) on Friday. The trend is up but readers may want to look for dips near $4.20 before considering new positions.

Earlier Comments:
We'll try and limit our risk by keeping our position size small. FYI: The Point & Figure chart for LEDR is bullish with a $6.75 target. Remember, small positions. Don't go overboard just because the share price is low. I would consider this a higher-risk trade.

Current Position: Long LEDR stock @ $4.35

05/23/12 new stop loss @ 3.95
05/21/12 triggered at $4.35

chart:

Entry on May 21 at $4.35
Earnings Date 05/01/12
Average Daily Volume = 77 thousand
Listed on May 19, 2011


Potash Corp. - POT - close: 39.78 change: -0.42

Stop Loss: 38.90
Target(s): the 50-dma (currently 43.15)
Current Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
05/26 update: There was no follow through on Thursday's big bounce in POT. Shares still look poised to bounce higher after testing significant support this past week.

POT can be a volatile stock so I am suggesting we keep our position size small. We want to use a trigger at $40.30 to open small bullish positions. We'll stop loss at $38.90. There is potential resistance near $42.00 but we're aiming for the 50-dma (currently at $43.20).

Trigger @ 40.30 (small positions)

Suggested Position: buy POT stock @ (trigger)

- or -

buy the JUN $40 call (POT1216F40)

chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 5.4 million
Listed on May 24, 2011


EXCO Resources - XCO - close: 7.92 change: -0.03

Stop Loss: 7.45
Target(s): 9.25
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
05/26 update: Trading in XCO was a bit disappointing on Friday. The stock did see a spike higher on Friday morning and XCO traded above resistance at $8.00. Our trigger to open positions was hit at $8.05. Unfortunately XCO failed to hold this breakout. The stock closed back in negative territory.

I would wait for a new relative high above $8.08 (Friday's high) before launching new positions.

If XCO can see a convincing breakout it could see a short squeeze. The most recent data listed short interest at 27% of the 135 million-share float.

current Position: Long XCO stock @ $8.05

- or -

Long JUN $8.00 call (XCO1216F8) Entry $0.50

05/25/12 triggered at $8.05

chart:

Entry on May 25 at $8.05
Earnings Date 07/31/12 (unconfirmed)
Average Daily Volume = 7.0 million
Listed on May 22, 2011


BEARISH Play Updates

Acme Packet, Inc. - APKT - close: 23.24 change: +0.28

Stop Loss: 25.05
Target(s): 20.50
Current Gain/Loss: + 3.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/26 update: There was not much follow through on Thursday's reversal lower. APKT managed a +1.2% bounce on Friday instead. The larger trend is still bearish and you could argue that last week's sideways move was more of a bear-flag pattern. I am not suggesting new positions at this time.

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: 21.36 change: -0.65

Stop Loss: 22.75
Target(s): 20.05 or 18.55
Current Gain/Loss: + 3.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/26 update: Transportation-related stocks underperformed the major indices and ARII underperformed its peers with a sharp -2.9% drop. The trading action this past week looks more like a bear-flag pattern. We are going to try and reduce our risk by lowering the stop loss down to $22.75.

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

05/26/12 new stop loss @ 22.75
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: 28.22 change: +0.32

Stop Loss: 29.05
Target(s): 26.75
Current Gain/Loss: + 4.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: DV managed another bounce on Friday but shares are oversold so a bounce isn't surprising. Look for resistance near its 10-dma. More conservative traders may want to take profits now. We are going to try and limit our risk by moving the stop loss down to $29.05. I am not suggesting new positions at this time.

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

05/26/12 new stop loss @ 29.05
05/24/12 adjusting exit target to $26.75
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


Ebix, Inc. - EBIX - close: 17.93 change: -0.04

Stop Loss: 19.05
Target(s): 16.05
Current Gain/Loss: - 0.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: Friday proved to be a quiet session for EBIX with the stock churning sideways. The trend is still bearish and I would still consider new positions now at current levels.

Earlier Comments:
Our first target is $16.15. We want to keep our position size small to limit our risk because EBIX could see a short squeeze. The most recent data listed short interest at 29% of the small 34.6 million share float. Readers may want to use put options to limit risk instead of shorting the stock.
FYI: The Point & Figure chart for EBIX is bearish with a $12.00 target.

Current Position: short EBIX stock @ $17.90

- or -

Long JUN $18 PUT (EBIX1216R18) Entry $0.90

05/24/12 triggered @ 17.90

chart:

Entry on May 23 at $17.90
Earnings Date 08/07/12 (unconfirmed)
Average Daily Volume = 386 thousand
Listed on May 23, 2011


Fusion-io, Inc. - FIO - close: 19.92 change: -0.64

Stop Loss: 22.05
Target(s): 17.00
Current Gain/Loss: + 0.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: It looks like the oversold bounce in FIO is losing steam. Shares underperformed on Friday with a -3.1% decline. At the moment shares are still holding support near the $19.50 level.

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: 18.82 change: -0.16

Stop Loss: 19.75
Target(s): 17.25
Current Gain/Loss: + 3.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: Friday's bounce in FWLT reversed under its simple 10-dma. We are going to try and reduce our risk by lowering the stop loss down to $19.75. 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

05/26/12 new stop loss @ 19.75
05/22/12 new stop loss @ 20.35

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: 22.44 change: +0.40

Stop Loss: 22.65
Target(s): 19.25
Current Gain/Loss: - 4.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/26 update: GM is showing too much relative strength. Friday the stock advanced +1.8% and closed above technical resistance at its 20-dma. I am suggesting an early exit at the open on Monday morning!

current Position: short GM stock @ $21.57

- or -

Long Jun $20 PUT (GM1216R20) Entry $0.39

05/26/12 prepare to exit at the open on Monday morning
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: 32.38 change: +0.40

Stop Loss: 33.55
Target(s): 30.25
Current Gain/Loss: + 1.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/26 update: HSP's two-day bounce has stalled right at technical resistance at its 10-dma. The rebound should stop here. If not, look for resistance at the 20-dma near $33.40. I am not suggesting new positions at this time.

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

05/23/12 new stop loss @ 33.55
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


Netgear Inc. - NTGR - close: 29.86 change: -0.62

Stop Loss: 31.55
Target(s): 26.00
Current Gain/Loss: - 0.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/26 update: NTGR broke down under support near $30.00 on Friday and hit our trigger to open bearish positions at $29.75. The intraday low was $28.98 but NTGR did pare its losses and bounced back toward $30.00 I would still consider new positions now
FYI: The Point & Figure chart for NTGR is bearish with a $25.00 target.

current Position: short NTGR stock @ $29.75

- or -

Long Jun $30 PUT (NTGR1216R30) Entry $1.70

05/25/12 triggered @ 29.75

chart:

Entry on May 25 at $29.75
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 549 thousand
Listed on May 24, 2011


Sohu.com - SOHU - close: 43.84 change: -0.56

Stop Loss: 45.55
Target(s): 40.50
Current Gain/Loss: + 2.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: Friday's trading in SOHU looked a lot like Thursday. Trades sold the early morning rally attempt but there wasn't much conviction on the selling pressure lower. You could argue that SOHU might be forming a bear-flag pattern over the last few days. 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


Marriott Vacations Worldwide - VAC - close: 28.05 change: -0.70

Stop Loss: 29.25
Target(s): 25.25
Current Gain/Loss: + 0.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/26 update: VAC opened at $28.10 and spent the rest of Friday chopping around either side of the $28.00 level. I would still consider new positions now at current levels. However, we are going to take a more defensive posture on our stop loss and move the stop down to $29.25, which is still above the 50-dma.

(small positions)

current Position: short VAC stock @ $28.10

05/26/12 new stop loss @ 29.25

chart:

Entry on May 25 at $28.10
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 495 thousand
Listed on May 24, 2011


CLOSED BULLISH PLAYS

AT&T, Inc. - T - close: 33.69 change: +0.05

Stop Loss: 32.90
Target(s): 36.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/26 update: The rally in big cap telecom stocks seems to have stalled. We wanted to open bullish positions if T could trade at $34.05 but it hasn't happened yet.

Tonight we're removing T from the newsletter but I would keep it on your radar screen should it close above $34.00.

Trigger @ 34.05

Trade did not open.

05/26/12 removed from the newsletter

chart:

Entry on May xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 28 million
Listed on May 19, 2011


CLOSED BEARISH PLAYS

Companhia Brasileira de Distribuicao - CBD - cls: 40.29 chg: +1.50

Stop Loss: 40.55
Target(s): 35.25
Current Gain/Loss: - 2.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/26 update: CBD was just a little too volatile for us on Friday. The stock bounced back sharply to test technical resistance at its 10-dma and 200-dma. It failed to close above these levels but unfortunately it did trade above them intraday and hit our stop loss at $40.55.

Earlier Comments:
We'll try and limit our risk by using small positions

(small positions)

closed Position: short CBD stock @ $39.59 exit $40.55 (-2.4%)

05/25/12 stopped out at $40.55
05/23/12 new stop loss @ 40.55
05/23/12 traded opened on gap down at $39.59, below our trigger 39.70

chart:

Entry on May 23 at $39.59 (gap down)
Earnings Date 05/23/12 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on May 22, 2011