Editor's Note:
The stock market delivered its best week of the year but stocks remain vulnerable to negative headlines.

Current Portfolio:


BULLISH Play Updates

Forest Labs - FRX - close: 35.69 change: +0.66

Stop Loss: 34.75
Target(s): 38.00
Current Gain/Loss: + 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: Traders bought the dip on Friday morning and FRX surged to a new multi-month high. This looks like confirmation of the bullish breakout but things could change if the market drops on Monday due to negative headlines. We'll try and reduce our risk by raising the stop loss to $34.75. More aggressive traders will want to use a wider stop loss.

current Position: Long FRX stock @ $35.50

- or -

Long Jul $36 call (FRX1221G36) Entry $1.25*

06/09/12 new stop loss @ 34.75
06/07/12 triggered at $35.50
*option price is an estimate. option did not trade at the time our play was opened.

chart:

Entry on June 07 at $35.50
Earnings Date 07/17/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on June 06, 2011


Idenix Pharmaceuticals - IDIX - close: 9.00 change: +0.19

Stop Loss: 8.49
Target(s): 11.50
Current Gain/Loss: - 2.7%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/09 update: Traders also bought the dip in IDIX on Friday with the stock bouncing near its simple 50-dma. Shares outperformed the market with a +2.1% gain. More conservative traders may want to wait for a new rise past $9.30 before initiating new positions.

FYI: The Point & Figure chart for IDIX is bullish with a $15.50 target.

current Position: Long IDIX stock @ $9.25

- or -

Long Jul $10 call (IDIX1221G10) Entry $1.10

06/07/12 triggered at $9.25

chart:

Entry on June 07 at $ 9.25
Earnings Date 05/02/12
Average Daily Volume = 1.5 million
Listed on June 01, 2011


Molycoorp, Inc. - MCP - close: 21.00 change: -0.33

Stop Loss: 20.49
Target(s): 24.95
Current Gain/Loss: - 5.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: MCP saw a dip to short-term technical support at its 10-dma before paring its losses on Friday. I would be tempted to buy this dip if both MCP and the S&P 500 index open positive on Monday. More conservative traders could wait for a new rally past $22.00 before initiating positions.

FYI: If the economic data out of China this weekend is bad it could have a negative impact on shares of MCP this Monday.

Earlier Comments:
The most recent data listed short interest at 41% of the 56.6 million share float. That is significant and definitely raises the risk of a short squeeze higher.

current Position: Long MCP stock @ $22.10

- or -

Long Jul $23 call (MCP1221G23) Entry $1.45

06/06/12 triggered @ 22.10

chart:

Entry on June 06 at $22.10
Earnings Date 08/09/12 (unconfirmed)
Average Daily Volume = 2.5 million
Listed on June 05, 2011


BEARISH Play Updates

Abercrombie & Fitch - ANF - close: 32.16 change: +0.03

Stop Loss: 33.85
Target(s): 30.50
Current Gain/Loss: + 5.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: ANF spent most of Friday in negative territory before edging past the breakeven point late in the session. The path is still down but you could argue ANF remains oversold. I would still consider new positions but more conservative traders may want to consider taking profits now. or adjusting their stop loss closer to the 10-dma.

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

chart:

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


Heritage-Crystal Clean - HCCI - close: 17.12 change: +0.95

Stop Loss: 18.25
Target(s): 14.50
Current Gain/Loss: + 0.5%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
06/09 update: Uh-oh! After a 92-cent drop on Thursday HCCI completely erased it on Friday. This volatility could be stomach churning, down -5% one day and up +5% the next. The overall trend remains bearish but I'm not suggesting new positions at this time.

Earlier Comments:
I want to warn you that this is an aggressive trade. The average volume of 55,000 is very, very light, which can lead to sharp intraday spikes. Plus, the most recent data listed short interest at 14% of the very, very small 8.4 million share float. That raises the risk of a short squeeze. FYI: The Point & Figure chart for HCCI is bearish with a $14.00 target.

(SMALL positions to limit risk)

current Position: short HCCI stock @ $17.20

chart:

Entry on June 07 at $17.20
Earnings Date 07/23/12 (unconfirmed)
Average Daily Volume = 55 thousand
Listed on June 06, 2011


InterDigital, Inc. - IDCC - close: 24.41 change: +0.05

Stop Loss: 25.55
Target(s): 21.50
Current Gain/Loss: - 1.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: IDCC gapped down on Friday at $24.15 and then bounce a little bit later. Shares underperformed the market's major indices on Friday. I don't see any changes from my Thursday comments. I would still consider new bearish positions at current levels.

Our multi-week target is $21.50. More aggressive traders could aim for the $20 level instead.

current Position: short IDCC stock @ 424.15

- or -

Long Jul $22.50 PUT (IDCC1221S22.5) Entry $1.15

06/08/12 traded opened with IDCC gapping down at $24.15

chart:

Entry on June 08 at $24.15
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 648 thousand
Listed on June 07, 2011


Polypore Intl. - PPO - close: 35.39 change: +0.83

Stop Loss: 36.85
Target(s): 30.25
Current Gain/Loss: - 1.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: Hmmm... there was not any follow through on Thursday's bearish reversal candlestick. PPO managed a +2.4% bounce on Friday. The overall pattern looks weak but readers may want to wait for a new drop under $33.60 before initiating new positions.

Earlier Comments:
We want to keep our position size small because a lot of investors are already short this stock. The most recent data listed short interest at 33% of the 46.3 million share float. If something happens and PPO starts to suddenly show strength it could spark some short covering. Considering buying put options to limit your risk.

(SMALL Positions)

current Position: short PPO stock @ $34.82

- or -

Long Jul $32.50 PUT (PPO1221S32.5) Entry $1.95

chart:

Entry on June 08 at $34.82
Earnings Date 08/01/12 (unconfirmed)
Average Daily Volume = 1.2 million
Listed on June 07, 2011


Schnitzer Steel - SCHN - close: 25.12 change: -0.29

Stop Loss: 26.75
Target(s): 21.50
Current Gain/Loss: + 1.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: SCHN failed just under $26.65 on both Thursday and Friday. Shares definitely underperformed the market with Friday's -1.1% decline. The stock is poised to breakdown to new lows.

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.

chart:

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