Editor's Note:
The market experienced some profit taking on Friday although many were blaming some index rebalancing for Friday's sell-off.


Current Portfolio:


BULLISH Play Updates

Barnes Group - B - close: 30.22 change: -0.09

Stop Loss: 29.90
Target(s): 34.75
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 28, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 310 thousand
New Positions: Yes, see below

Comments:
06/01/13: Shares of B bounced off support near $30.00 again but they also rolled over midday, much like Thursday. Currently we are waiting for a bullish breakout past resistance at $31.00. The trigger to launch positions is $31.10 but if we see B close below $30.00 we will most likely drop this stock as a candidate.

Earlier Comments:
We definitely want to keep our position size small to limit our risk.

Trigger @ 31.10 *Small Positions*

Suggested Position: buy B stock @ (trigger)

chart:



Electronic Arts - EA - close: 22.99 change: -0.36

Stop Loss: 22.40
Target(s): 25.75
Current Gain/Loss: - 0.5%

Entry on May 28 at $23.10
Listed on May 23, 2013
Time Frame: 4 to 6 weeks
Average Daily Volume = 6.0 million
New Positions: see below

Comments:
06/01/13: EA managed to breakout past resistance near $23.00 on Tuesday. Yet it was unable to build on this move. The stock has consolidated sideways the entire week and now it's back to testing the $23.00 level again.

I am raising our stop loss to $22.40. More conservative traders may want to raise their stop to the 10-dma (22.60) or toward Tuesday's low (22.77) instead.

Earlier Comments:
If triggered our target is $25.75. However, that is a slightly aggressive target. The $25.00 level has been resistance in the past and could be resistance again.

current Position: Long EA stock @ $23.10

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

Long Jul $25 call (EA1320G25) Entry $0.62

06/01/13 new stop loss @ 22.40

chart:



Financial Engines - FNGN - close: 43.12 change: -0.81

Stop Loss: 42.25
Target(s): 49.50
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 29, 2013
Time Frame: 4 to 8 weeks
Average Daily Volume = 396 thousand
New Positions: Yes, see below

Comments:
06/01/13: FNGN did not see any follow through on Thursday's rally. Shares instead struggled with the $44.00 level most of the session before following the market lower toward the closing bell. At the moment I don't see any changes from my prior comments.

Earlier Comments:
If FNGN can breakout past resistance it could see a short squeeze. The most recent data listed short interest at 19% of the 47.7 million-share float.

The May 20th high was $44.33. I am suggesting small bullish positions at $44.50. If triggered our target is $49.50. We do want to keep our position size small because FNGN is arguably overbought here.

Trigger @ 44.50 *small positions*

Suggested Position: buy FNGN stock @ (trigger)

chart:



Groupon, Inc. - GRPN - close: 7.69 change: +0.22

Stop Loss: 6.99
Target(s): 9.00
Current Gain/Loss: + 3.8%

Entry on May 28 at $ 7.41
Listed on May 25, 2013
Time Frame: 10 to 12 weeks
Average Daily Volume = 20.5 million
New Positions: see below

Comments:
06/01/13: GRPN displayed relative strength on Friday with a bullish breakout past resistance at $7.50. I suspect this sparked some short covering and shares rallied +2.9%. I didn't see any specific news that might account for Friday's move.

I am raising the stop loss to $6.99. More conservative traders might want to move their stop closer to $7.25 instead.

Earlier Comments:
Due to the stock's volatility in the last couple of months I am suggesting we keep our position size small to limit risk.
FYI: The Point & Figure chart for GRPN is bullish with a $10.50 target.

current Position: Long GRPN stock @ $7.41

06/01/13 new stop loss @ 6.99

chart:



Molina Healthcare - MOH - close: 37.80 change: -0.86

Stop Loss: 37.40
Target(s): 42.00
Current Gain/Loss: - 2.1%

Entry on May 29 at $38.60
Listed on May 22, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 660 thousand
New Positions: see below

Comments:
06/01/13: Uh-oh! There was no follow through on MOH's rally from Thursday. Shares underperformed the market on Friday with a -2.2% decline. Plus, Friday's close below $38.00 and below its simple 10-dma is short-term bearish. More conservative traders may want to consider an early exit now. If MOH sees any follow through on Monday we could see shares hit our stop loss at $37.40.

Earlier Comments:
I want to repeat that we are suggesting small positions. If the broader market continues lower we could see MOH reverse.

*Small Positions*

current Position: Long MOH stock @ $38.60

chart:



Spirit Airlines - SAVE - close: 30.43 change: -0.05

Stop Loss: 29.20
Target(s): 34.00
Current Gain/Loss: + 0.6%

Entry on May 28 at $30.25
Listed on May 25, 2013
Time Frame: 8 to 9 weeks
Average Daily Volume = 686 thousand
New Positions: see below

Comments:
06/01/13: Hmm... SAVE keeps trying to rally higher and traders keeping selling into strength. That is a warning signal. At the same time SAVE has a bullish trend of higher lows. I am cautiously bullish here but I'm not suggesting new positions. I am raising our stop loss up to $29.20.

current Position: Long SAVE stock @ $30.25

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

Long Jul $30 call (SAVE1320G30) entry $1.50

06/01/13 new stop loss @ 29.20

chart:



SunTrust Banks - STI - close: 32.09 change: -0.51

Stop Loss: 30.95
Target(s): 34.50
Current Gain/Loss: + 2.2%

Entry on May 16 at $31.40
Listed on May 15, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.4 million
New Positions: see below

Comments:
06/01/13: STI gave back most of Thursday's gains with a -1.5% pullback on Friday. Investors seem pretty bullish on the financial sector. Yet that does not guarantee any protection from a market-wide correction lower. Shares of STI are sitting on short-term support at the 10-dma. More conservative traders may want to raise their stop loss. If you're holding the July calls you may want to take profits now. I am not suggesting new positions at this time.

Earlier Comments:
I want to remind you that the 2011 highs near $33.00-33.15 could prove to be resistance. More conservative traders may want to exit near $33.00.

current Position: Long STI stock @ $31.40

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

Long Jul $32 call (STI1320G32) entry $0.78

05/28/13 call option traders might want to take profits early right now.
note: STI will begin trading ex-dividend tomorrow (10 cents)
05/20/13 new stop loss @ 30.95

chart:



Wells Fargo & Co - WFC - close: 40.55 change: -0.70

Stop Loss: 39.90
Target(s): 44.50
Current Gain/Loss: - 1.7%

Entry on May 30 at $41.25
Listed on May 29, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 20.5 million
New Positions: see below

Comments:
06/01/13: WFC is another banking stock that hit some profit taking on Friday. The stock is about to test short-term technical support at its 10-dma near $40.40 soon. I would suggest waiting for a bounce off the 10-dma or a bounce off the $40.00 level before initiating new positions.

*Small Positions*

current Position: Long WFC stock @ $41.25

chart:



BEARISH Play Updates

Rackspace Holdings - RAX - close: 37.53 change: -0.86

Stop Loss: 40.10
Target(s): 31.00
Current Gain/Loss: +1.3%

Entry on May 22 at $38.02
Listed on May 21, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 3.0 million
New Positions: see below

Comments:
06/01/13: RAX gapped open lower on Friday morning and gave up -2.2% by the closing bell. I don't see any changes from my prior comments and I would still consider new bearish positions at this time.

If you're concerned about shorting RAX then buy the put option to limit your risk to the cost of your option. Although you may want to buy the July puts. June puts only have three weeks left.

current Position: short RAX stock @ $38.02

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

Long Jun $37.50 PUT (RAX1322r37.5) entry $1.60

05/25/13 new stop loss at $40.10, more conservative traders may want to exit early now.
05/24/13 RAX confirms the bullish reversal pattern.
05/23/13 RAX produced a bullish reversal candlestick.

chart: