Editor's Note:
Stocks produced a widespread bounce today with the retail sector the only one closing negative on the session.

We are removing SIMO from the newsletter. Our trade did not open.

Current Portfolio:


BULLISH Play Updates

Idenix Pharmaceuticals - IDIX - close: 8.83 change: -0.30

Stop Loss: 8.49
Target(s): 11.50
Current Gain/Loss: unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
06/05 update: Once again traders bought the dip in IDIX near support at its 200-dma. Yet the trend of lower highs continues. I don't see any changes from my prior comments.

If there is any bounce in the market shares of IDIX could see a short squeeze. The most recent data listed short interest at 18.4% of the 55.5 million share float.

I am suggesting a trigger to open bullish positions at $9.25 with a stop loss at $8.49. That's a wide stop to start and we'll try and narrow it once the trade is opened. Our multi-week target is $11.50. FYI: The Point & Figure chart for IDIX is bullish with a $15.50 target.

Trigger @ 9.25

Suggested Position: buy IDIX stock @ (trigger)

- or -

buy the Jul $10 call (IDIX1221G10)

Entry on June xx at $ xx.xx
Earnings Date 05/02/12
Average Daily Volume = 1.5 million
Listed on June 01, 2011


Nationstar Mortgage Holdings - NSM - close: 19.80 change: +0.27

Stop Loss: 18.69
Target(s): 21.00
Current Gain/Loss: + 1.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/05 update: NSM made headlines this morning. The company announced a deal to buy almost $10.4 billion worth of residential mortgage servicing rights from Bank of America. The market must have been happy with the news as NSM rallied +4.2% intraday before paring its gains to just +1.3%.

Our plan was to keep our position size small.

(small positions)

current Position: buy NSM stock @ $19.60

Entry on June 05 at $19.60
Earnings Date --/--/-- (unconfirmed)
Average Daily Volume = 639 thousand
Listed on June 04, 2011


BEARISH Play Updates

Abercrombie & Fitch - ANF - close: 32.41 change: +0.63

Stop Loss: 33.85
Target(s): 30.50
Current Gain/Loss: + 4.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/05 update: After several days of declines ANF is finally seeing an oversold bounce. Shares rose +1.9% today. Technically today's performance has created a bullish engulfing candlestick reversal pattern.

I am not suggesting new positions at this time.

FYI: The plan was to exit our July $30 puts at the open this morning.

current Position: short ANF stock @ $33.93

- or -

(exited on June 5th)
Jul $30 PUT (ANF1221S30) Entry $1.05 exit $1.56 (+48.5%)

06/05/12 exited July $30 puts at the open (bid) $1.56 (+48.5%)
06/04/12 new stop loss @ 33.85
prepare to exit our July $30 puts at the open tomorrow.
06/02/12 new stop loss @ 34.55, adjust exit to $30.50

Entry on May 31 at $33.93
Earnings Date 08/15/12 (unconfirmed)
Average Daily Volume = 3.9 million
Listed on May 30, 2011


Coherent Inc. - COHR - close: 42.78 change: +0.29

Stop Loss: 43.75
Target(s): 40.50
Current Gain/Loss: + 0.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/05 update: The oversold bounce in COHR only managed a +0.6% gain. I don't see any changes from my prior comments. I am not suggesting new positions at this time.

Earlier Comments:
The plan was to keep our position size small to limit our risk.

(small positions)

current Position: short COHR stock @ $43.16

06/04/12 new stop loss @ 43.75
06/02/12 new stop loss @ 45.25
06/01/12 COHR gapped open lower at $43.16

Entry on June 01 at $43.16
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 127 thousand
Listed on May 31, 2011


Ebix, Inc. - EBIX - close: 16.95 change: +0.11

Stop Loss: 17.25
Target(s): 16.15
Current Gain/Loss: + 5.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/05 update: EBIX tagged a new relative low at $16.43 this morning before bouncing into positive territory. The company announced plans to buy PlanetSoft for $40 million.

Cautious traders may want to take profits now. I am not suggesting new positions at this time.

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

06/04/12 new stop loss @ 17.25
06/02/12 new stop loss @ 17.75
05/31/12 new stop loss @ 18.35
05/24/12 triggered @ 17.90

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


Hospira Inc. - HSP - close: 32.11 change: +0.64

Stop Loss: 32.35
Target(s): 30.25
Current Gain/Loss: + 2.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/05 update: Our HSP trade is still open. The stock rallied to $32.34 intraday before trimming its gains. Our stop loss happens to be at $32.35. 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

05/31/12 new stop loss @ 32.35
05/23/12 new stop loss @ 33.55
05/14/12 opened on the gap down at $32.95, trigger was 33.20

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: 29.60 change: -0.60

Stop Loss: 31.55
Target(s): 26.00
Current Gain/Loss: + 0.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/05 update: After underperforming the market yesterday NTGR reversed course and outperformed the market today with a +2.0% gain. The stock should have resistance at its 10-dma near $30.80. More conservative traders might want to tighten their stop loss closer to the $31.00 level. I am not suggesting new positions.

current Position: short NTGR stock @ $29.75

- or -

Long Jun $30 PUT (NTGR1216R30) Entry $1.70

05/25/12 triggered @ 29.75

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


Schnitzer Steel - SCHN - close: 24.85 change: -0.44

Stop Loss: 26.75
Target(s): 21.50
Current Gain/Loss: + 2.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/05 update: SCHN continues to underperform. The stock's close under the $25.00 level is bearish. Readers could use this as a new bearish entry point.

We want to keep our position size small.

(small positions)

current Position: short SCHN stock @ $25.45

- or -

Long Jul $25 PUT (SCHN1221S25) Entry $2.10*

06/04/12 new stop loss @ 26.75
*06/01/12 entry price on the option is an estimate. Option failed to trade on Friday.

Entry on June 01 at $25.45
Earnings Date 06/28/12 (unconfirmed)
Average Daily Volume = 474 thousand
Listed on May 31, 2011


Tempur Pedic Intl. - TPX - close: 43.67 change: +0.97

Stop Loss: 45.55
Target(s): 38.50
Current Gain/Loss: - 0.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/05 update: I cautioned readers yesterday to look for TPX to bounce into the $44-45 zone. The stock looks poised to do that tomorrow. More conservative traders might want to tighten their stop closer to the $45.00 mark.

We are aiming for $38.50 but more conservative traders will want to exit near $40.00, which might offer some round-number support.

(small positions)

current Position: short TPX stock @ $43.52

- or -

Long July $40 PUT (TPX1221S40) Entry $3.00

Entry on June 04 at $43.52
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 4.7 million
Listed on June 01, 2011


Marriott Vacations Worldwide - VAC - close: 26.92 change: -0.00

Stop Loss: 27.55
Target(s): 25.25
Current Gain/Loss: + 4.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/05 update: It proved to be a very quiet day for VAC. The stock hovered under the $27.00 level and closed unchanged on the session. I am not suggesting new positions. Be aware that the $26.00 level could be support.

(small positions)

current Position: short VAC stock @ $28.10

06/04/12 new stop loss @ 27.55
05/26/12 new stop loss @ 29.25

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


CLOSED BEARISH PLAYS

Silicon Motion Tech. - SIMO - close: 13.81 change: +0.48

Stop Loss: 14.15
Target(s): 10.25
Current Gain/Loss: unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
06/05 update: We are giving up SIMO. The larger trend still looks bearish but short-term the stock refuses to breakdown under support near $13.00. We are removing it from the newsletter. Our trade never opened. Readers may want to keep SIMO on their watch list for a close udner $13.00 as a potential entry point for bearish trades.

Our trade did not open.

06/05/12 removed from the newsletter.

chart:

Entry on May xx at $ xx.xx
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 819 thousand
Listed on May 26, 2011