Editor's Note:
Basic material stock CLF hit our exit target today. We also saw IART and CBT hit our entry triggers.

Current Portfolio:


BULLISH Play Updates

Bank of America - BAC - close: 8.00 change: +0.04

Stop Loss: 7.90
Target(s): 9.25 or 9.75
Current Gain/Loss: - 3.0%

Entry on August 21 at $8.25
Listed on August 20, 2011
Time Frame: 6 to 9 weeks
Average Daily Volume = 103 million
New Positions: see below

Comments:
08/29/12 update: There was no follow through on yesterday's bearish breakdown but BAC still looks vulnerable here. I am not suggesting new positions at this time.

The plan was to use small positions to limit our risk.

current Position: Long BAC stock @ $8.25

- or -

Long 2013 Jan $9.00 call (BAC1319a9) Entry $0.47

08/21/12 triggered @ 8.25



eBay Inc. - EBAY - close: 47.49 change: +0.55

Stop Loss: 44.75
Target(s): 49.75
Current Gain/Loss: + 2.7%

Entry on August 17 at $46.25
Listed on August 16, 2011
Time Frame: 4 to 6 weeks
Average Daily Volume = 12.3 million
New Positions: see below

Comments:
08/29/12 update: EBAY displayed some relative strength (+1.1%) thanks to some bullish analyst comments today. The rally did stall at short-term resistance near $48.00. I am not suggesting new positions at this time.

current Position: Long EBAY stock @ $46.25

- or -

Long Oct $47 call (EBAY1220J47) Entry $1.89

08/17/12 triggered at $46.25



Energy XXI Ltd. - EXXI - close: 33.58 change: +0.66

Stop Loss: 32.45
Target(s): 37.75
Current Gain/Loss: - 1.4%

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:
08/29/12 update: After underperforming the last couple of days EXXI managed a +2.0% bounce. This looks like a rebound off the trend of higher lows from the June low. I remain cautious on this stock with it under $34.00.

I am not suggesting new positions.

current Position: Long EXXI stock @ $34.05

- or -

Long Sep $35 call (EXXI1222i35) Entry $1.45

08/15/12 triggered at $34.05



Integra Life Sciences - IART - close: 40.60 change: +0.51

Stop Loss: 39.45
Target(s): 44.50
Current Gain/Loss: + 0.0%

Entry on August 29 at $40.60
Listed on August 21, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 171 thousand
New Positions: see below

Comments:
08/29/12 update: IART was also showing some relative strength with a +1.2% gain. The stock rallied to new multi-month highs and hit our trigger to launch bullish positions at $40.60. Our multi-week target is $44.50. FYI: The Point & Figure chart for IART is bullish with a long-term $61 target.

current Position: Long IART stock @ $40.60



Nuance Comm. - NUAN - close: 24.05 change: -0.02

Stop Loss: 23.40
Target(s): 28.00
Current Gain/Loss: - 1.8%

Entry on August 21 at $24.50
Listed on August 18, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.1 million
New Positions: see below

Comments:
08/29/12 update: Thanks to a directionless market shares of NUAN are also churning sideways. The stock is in a $23.60-24.30 range with technical resistance at its 200-dma directly overhead. I am not suggesting new positions at this time.

current Position: Long NUAN stock @ $24.50

- (or for more adventurous traders, try this option) -

Long Oct $25 call (NUAN1220j25) Entry $1.30*

08/25/12 new stop loss @ 23.40
08/21/12 triggered @ 24.50
*option entry price is an estimate. it did not trade at the time our play was opened.



PulteGroup - PHM - close: 13.40 change: +0.12

Stop Loss: 12.65
Target(s): 13.90
Current Gain/Loss: + 9.0%
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:
08/29/12 update: Homebuilders as a group were up today but PHM outperformed with a +0.9% gain. The industry got a boost from some positive home sales figures. Please note that I am raising our stop loss to $12.65. Readers may want to exit early right now.

Our exit target is $13.90. I am not suggesting new positions.

Current Position: Long PHM stock @ $12.29

- or -

Long Oct $13 call (PHM1220j13) Entry $0.70

08/29/12 new stop loss @ 12.65
08/25/12 adjust exit target to $13.90
08/20/12 new stop loss @ 12.45
08/18/12 new stop loss @ 11.95
08/17/12 PHM stalls/reverses at resistance near $14.00
08/09/12 new stop loss @ 11.80
08/09/12 triggered on gap higher at $12.29. Trigger was $12.25.



Theravance Inc. - THRX - close: 27.03 change: -0.16

Stop Loss: 25.90
Target(s): 31.00
Current Gain/Loss: - 2.2%

Entry on August 24 at $ 27.65
Listed on August 23, 2011
Time Frame: 4 to 8 weeks
Average Daily Volume = 492 thousand
New Positions: see below

Comments:
08/29/12 update: THRX struggled a bit today. Shares traded under technical support at its 50-dam on an intraday basis. This stock may be stuck under resistance at $28.00 until we see what the market does on Friday after the Bernanke speech.

I am not suggesting new positions at this time.

Earlier Comments:
THRX is a biotech firm and the stock could see a short squeeze. The most recent data listed short interest at 22% of the 52.6 million-share float. We do want to keep our position size small.

*small positions*

current Position: Long THRX stock @ $27.65

- (or for more adventurous traders, try this option) -

Long Oct $30 call (THRX1220j30) entry $1.55



Tempur Pedic Intl. - TPX - close: 32.70 change: +0.55

Stop Loss: 30.90
Target(s): 39.00
Current Gain/Loss: + 0.6%
Time Frame: 6 to 8 weeks

Entry on August 16 at $32.50
Listed on August 7, 2011
Average Daily Volume = 2.5 million New Positions: see below

Comments:
08/29/12 update: Traders bought the dip near TPX's rising 20-dma. The stock outperformed the market with a +1.7% gain. I am raising our stop loss to $30.90.

Earlier Comments:
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.

(small positions)

current Position: Long TPX stock @ $32.50

- or -

Long Sep $33 call (TPX1222I33) Entry $1.75

08/29/12 new stop loss @ 30.90
08/16/12 triggered @ 32.50



BEARISH Play Updates

Cabot Corp. - CBT - close: 35.02 change: -0.04

Stop Loss: 35.85
Target(s): 31.50
Current Gain/Loss: - 0.5%

Entry on August 29 at $34.85
Listed on August 28, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 338 thousand
New Positions: see below

Comments:
08/29/12 update: Our new bearish play on CBT has been triggered. The stock hit our entry point at $34.85. I blame the bounce back on the market's lack of direction. Readers may want to wait for a new drop under $34.85 before initiating new positions.

Our multi-week target is $31.50. The Point & Figure chart for CBT is bearish with a $25.00 target.

FYI: CBT will begin trading ex-dividend on August 29th. The quarterly cash dividend should be 20 cents so we can expect CBT to gap down at the open on August 29th by 20 cents.

current Position: short CBT stock @ $34.85

- (or for more adventurous traders, try this option) -

Long Oct $35 PUT (CBT1220v35) entry $2.05



Dolby Labs - DLB - close: 33.75 change: -0.39

Stop Loss: 35.11
Target(s): 30.15
Current Gain/Loss: - 0.4%

Entry on August 24 at $33.60
Listed on August 23, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 992 thousand
New Positions: see below

Comments:
08/29/12 update: DLB displayed relative weakness with a -1.1% decline today. I would still consider new bearish positions at current levels.

*Small Positions*

current Position: short DLB stock @ $33.60

- (or for more adventurous traders, try this option) -

Long Sep $35 PUT (DLB1222u35) Entry $1.90



Navistar Intl. - NAV - close: 22.50 change: -0.26

Stop Loss: 25.15
Target(s): 20.25
Current Gain/Loss: +3.1%

Entry on August 28 at $ 23.22
Listed on August 25, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.7 million
New Positions: see below

Comments:
08/29/12 update: NAV was also showing relative weakness today with a -1.1% decline. There is no change from my prior comments. If the stock manages to bounce we can look for short-term resistance near $24.00.

Suggested Position: short NAV stock @ $23.22

- (or for more adventurous traders, try this option) -

Long Sep $20 PUT (NAV1222u20) Entry $0.70

08/28/12 trade opens with NAV at $23.22
08/27/12 NAV gaps open above our stop loss, effectively negating our trade. We are reloading and trying again. Launch positions at the open tomorrow



Strayer Education - STRA - close: 64.88 change: -0.16

Stop Loss: 68.65
Target(s): 61.50
Current Gain/Loss: + 3.9%

Entry on August 23 at $67.50
Listed on August 22, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 294 thousand
New Positions: see below

Comments:
08/29/12 update: STRA tagged a new low at $64.00 before paring its losses. Readers may want to tighten their stops closer to the simple 10-dma, which is near $67.75. I am not suggesting new positions at this time.

Earlier Comments:
Part of our challenge is that the for-profit education stocks have been bearish for a while. The most recent data listed short interest in STRA at 41% of the very small 11 million share float. That raises our risk of a short squeeze. Given this risk I'd rather buy put options but the options spreads are too wide to trade. We'll try and limit our risk by keeping our position size small.

*Small Positions Only!*

current Position: short STRA stock @ $67.50

08/27/12 new stop loss @ 68.65
08/25/12 new stop loss @ 70.25



Tesco Corp. - TESO - close:10.11 change: +0.16

Stop Loss: 10.55
Target(s): 8.15
Current Gain/Loss: - 3.6%

Entry on August 28 at $9.76
Listed on August 27, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 304 thousand
New Positions: see below

Comments:
08/29/12 update: Hmm... TESO has bounced two days in a row. The close back above the $10.00 level is troubling since it was supposed to be new resistance. Readers may want to tighten their stops or exit early. I am not suggesting new positions.

current Position: short TESO stock @ $9.76



TIM Participacoes S.A. - TSU - close: 18.86 change: -0.11

Stop Loss: 20.55
Target(s): 17.50
Current Gain/Loss: + 4.7%

Entry on August 22 at $19.80
Listed on August 21, 2011
Time Frame: 4 to 6 weeks
Average Daily Volume = 2.3 million
New Positions: see below

Comments:
08/29/12 update: TSU tagged another new low with a spike down to $18.43. Unfortunately shares produced a decent intraday bounce and trimmed its losses to just -0.5%. Readers may want to tighten their stops. I am not suggesting new positions.

current Position: short TSU stock @ $19.80 (Small Positions)

08/27/12 new stop loss @ 20.55
08/22/12 triggered @ 19.80



CLOSED BEARISH PLAYS

Cliffs Natural Resources - CLF - close: 36.84 change: -0.52

Stop Loss: 40.05
Target(s): 36.50
Current Gain/Loss: +13.1%

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:
08/29/12 update: Target achieved. CLF continues to sink and hit our exit target at $36.50 today.

current Position: short CLF stock @ $41.99 exit $36.50 (+13.1%)

- or -

Long Oct $40 PUT (CLF1220V40) Entry $2.20 exit $4.60 (+109%)

08/29/12 target hit
08/27/12 new stop loss @ 40.05, readers may want to take profits now
08/25/12 new stop loss @ 41.60
08/21/12 new stop loss @ 43.05

chart: