Editor's Note:
Stocks continue to churn sideways. EXXI (long) and STRA (short) both hit our entry triggers today. I have removed SWKS as a candidate. We want to exit our INCY trade at the open tomorrow.

Current Portfolio:


BULLISH Play Updates

Aruba Networks - ARUN - close: 16.66 change: +0.39

Stop Loss: 15.49
Target(s): 19.00
Current Gain/Loss: +3.3%
Time Frame: 2 to 4 weeks

Entry on August 09 at $16.13
Listed on August 8, 2011
Average Daily Volume = 3.4 million New Positions: see below

Comments:
08/15/12 update: Traders bought the dip in ARUN and shares are up +2.3% today. The stock appears to be forming a new $16-17 trading range. I am not suggesting new positions at this time. Remember, we want to exit prior to the August 23rd earnings report.

Earlier Comments:
ARUN could see a short squeeze. The most recent data listed short interest at 24% of the 104.8 million-share float.

current position: Long ARUN stock @ $16.13

- or -

Long Sep $16 call (ARUN1222i16) Entry $1.55

08/09/12 new stop loss @ 15.49
08/09/12 triggered on gap higher at $16.13. Trigger was $15.75.



Energy XXI Ltd. - EXXI - close: 34.31 change: +0.82

Stop Loss: 32.45
Target(s): 37.75
Current Gain/Loss: + 0.8%

Entry on August 15 at $34.05
Listed on August 11, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 968 thousand
New Positions: see below

Comments:
08/15/12 update: EXXI has finally broken through resistance and hit our trigger to launch bullish positions at $34.05. Shares outperformed the market today with a +2.4% gain. I would still consider new positions at current levels.

current Position: Long EXXI stock @ $34.05

- or -

Long Sep $35 call (EXXI1222i35) Entry $1.45

08/15/12 triggered at $34.05



PulteGroup - PHM - close: 12.78 change: +0.08

Stop Loss: 11.80
Target(s): 14.50
Current Gain/Loss: + 4.0%
Time Frame: 6 to 8 weeks

Entry on August 09 at $12.29
Listed on August 8, 2011
Average Daily Volume = 14.5 million New Positions: see below

Comments:
08/15/12 update: Traders bought the dip near $12.50 today. PHM managed to post a +0.6% gain, which outperformed both the major indices and the homebuilder index. I am not suggesting new positions at this time.

Current Position: Long PHM stock @ $12.29

- or -

Long Oct $13 call (PHM1220j13) Entry $0.70

08/09/12 new stop loss @ 11.80
08/09/12 triggered on gap higher at $12.29. Trigger was $12.25.



Tempur Pedic Intl. - TPX - close: 31.21 change: -0.52

Stop Loss: 29.75
Target(s): 39.00
Current Gain/Loss: unopened
Time Frame: 6 to 8 weeks

Entry on August xx at $ xx.xx
Listed on August 7, 2011
Average Daily Volume = 2.5 million New Positions: Yes, see below

Comments:
08/15/12 update: TPX gave back a good chunk of yesterday's gains. Yet the trend of higher lows remains intact for now. I will admit I'm losing patience for this trade. If TPX doesn't breakout past resistance soon we'll likely drop it.

We want to use a trigger at $32.50 to launch small bullish positions.

I do consider this somewhat of an aggressive trade so we will want to limit the size of our position. Our multi-week target is $39.00 since the $40.00 level is probably round-number resistance.

Trigger @ $32.50 (small positions)

Suggested Position: buy TPX stock @ (trigger)

- or -

buy the Sep $33 call (TPX1222I33)



BEARISH Play Updates

Cliffs Natural Resources - CLF - close: 41.61 change: -0.45

Stop Loss: 45.30
Target(s): 36.50
Current Gain/Loss: + 0.9%

Entry on August 15 at $41.99
Listed on August 14, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 5.3 million
New Positions: see below

Comments:
08/15/12 update: Our new trade on CLF is off to a decent start. Shares continued to underperform the market today. I would still consider new bearish positions now at current levels.

current Position: short CLF stock @ $41.99

- or -

Long Oct $40 PUT (CLF1220V40) Entry $2.20



FARO Technologies - FARO - close: 35.31 change: +0.63

Stop Loss: 36.55
Target(s): 30.50
Current Gain/Loss: - 1.0%

Entry on August 14 at $ 34.97
Listed on August 13, 2011
Time Frame: 3 to 4 weeks
Average Daily Volume = 238 thousand
New Positions: see below

Comments:
08/15/12 update: Lack of follow through on Monday's decline in FARO is troubling. Today's gain (+1.8%) definitely outperformed the major indices. Readers may want to look for a failed rally near $36.00 before considering new bearish positions. More conservative traders could wait for a new drop under $34.00 as their entry point.
FYI: The Point & Figure chart for FARO is bearish with a long-term $21.00 target.

Current Position: short FARO stock @ $34.97

- or -

Long Sept $35 PUT (FARO1222u35) Entry $2.10



Incyte Corp - INCY - close: 18.50 change: +0.25

Stop Loss: 18.65
Target(s): 14.00
Current Gain/Loss: - 5.7%
Time Frame: 6 to 8 weeks

Entry on August 08 at $17.50
Listed on August 7, 2011
Average Daily Volume = 2.0 million New Positions: see below

Comments:
08/15/12 update: We are throwing in the towel on INCY. The stock was oversold and due for a bounce. That's not surprising. However, shares are now up five days in a row. We want to exit immediately tomorrow morning to limit our losses.

Earlier Comments:
I do consider this an aggressive trade since INCY is already considered oversold at this point. Our target is $14.00.

(small positions)

current Position: short INCY stock @ $17.50

- or -

Long Sep $17.50 PUT (INCY1222I17.5) Entry $1.30

08/15/12 prepare to exit at the open tomorrow
08/08/12 triggered @ 17.50
*remember, small positions to limit risk!



Suburban Propane Partners - SPH - close: 37.78 change: +0.09

Stop Loss: 38.05
Target(s): 35.50
Current Gain/Loss: + 2.5%
Time Frame: 6 to 8 weeks

Entry on August 08 at $38.76
Listed on August 6, 2011
Average Daily Volume = 144 thousand New Positions: see below

Comments:
08/15/12 update: Shares of SPH are not cooperating either. The oversold bounce in SPH is now four days old (up four days in a row). I cautioned readers that SPH might bounce toward $38.00, which is why we put our stop loss at $38.05. Now SPH is testing this level. If there is any further gains tomorrow then SPH should hit our stop. I'm not suggesting new positions at this time.

Editor's note: When we listed this trade the spread on the option was only 30 cents. Today the spread is $2.30. How or why the exchanges let ridiculous spreads like this exist is extremely frustrating! If it doesn't change soon it could negatively impact our exit price.

current Position: short SPH @ $38.76

- or -

Long Sep $40 PUT entry @ $2.20

08/14/12 I repeat, readers may want to lock in gains now and exit early
08/13/12 new stop loss @ 38.05
08/09/12 new stop loss @ 39.15
08/08/12 triggered on gap down at $38.76 (trigger was 39.75)



Stamps.com Inc. - STMP - close: 19.13 change: +0.29

Stop Loss: 20.65
Target(s): 17.00
Current Gain/Loss: + 1.9%

Entry on August 14 at $19.50
Listed on August 9, 2011
Time Frame: 3 to 6 weeks
Average Daily Volume = 319 thousand
New Positions: see below

Comments:
08/15/12 update: STMP dipped to a new relative low at $18.62 before bouncing back to a +1.5% gain. Readers can look for a failed rally in the $19.50-20.00 zone as a new entry point for bearish positions.

FYI: The Point & Figure chart for STMP is bearish with an $11 target.

Current Position: short STMP @ $19.50

- or -

Long Sep $20 PUT (STMP1222u20) Entry $1.85

08/14/12 triggered @ 19.50



Strayer Education - STRA - close: 69.00 change: -0.43

Stop Loss: 71.55
Target(s): 62.50
Current Gain/Loss: + 0.0%

Entry on August 15 at $69.00
Listed on August 14, 2011
Time Frame: 3 to 6 weeks
Average Daily Volume = 306 thousand
New Positions: see below

Comments:
08/15/12 update: Our new trade on STRA has been triggered at $69.00. I would still consider new positions now at current levels. I don't see any changes from yesterday's new trade comments.

Earlier Comments:
This should be considered a higher-risk trade. Lots of investors are already bearish on STRA. The for-profit secondary education industry has had its share of troubles in recent years. The most recent data listed short interest at 41% of STRA's very small 11.0 million-share float. That does raise the risk of a short squeeze. If you look at a daily chart you can see the short squeeze that happened in late June.

Limit your risk by using small positions.

*Small Positions*

current Position: short STRA stock @ $69.00



CLOSED BULLISH PLAYS

Skyworks Solutions - SWKS - close: 28.58 change: -0.65

Stop Loss: 28.49
Target(s): 33.50
Current Gain/Loss: unopened

Entry on August xx at $ xx.xx
Listed on August 11, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.5 million
New Positions: see below

Comments:
08/15/12 update: SWKS is not cooperating. Shares underperformed the market today with a -2.2% decline. Furthermore shares closed under short-term support at the 10-dma. The larger trend still looks bullish but readers can keep SWKS on their watch list for a close over resistance near $30.00.

Our trade has not opened yet (trigger 30.25) and we are removing SWKS as an active candidate.

Trade did not open.

chart: