Editor's Note:
August proved to be one of the worst months for stocks this year. The short-term trend remains lower.

JCOM was stopped out. WCN and NUAN have been removed.


Current Portfolio:


BULLISH Play Updates

Halliburton Company - HAL - close: 48.00 change: -0.42

Stop Loss: 46.99
Target(s): 49.85
Current Gain/Loss: + 1.9%

Entry on August 19 at $47.10
Listed on August 17, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 9.0 million
New Positions: see below

Comments:
08/31/13: The rally in the energy stocks stalled on Thursday and Friday. HAL slipped -0.8% toward short-term support at its 10-dma on Friday. The stock should bounce here. If it doesn't bounce then the next level of support should be the 20-dma currently near $47.10.

Earlier Comments:
Our target is $49.85. If you have a longer time frame you could aim higher.

current Position: long HAL stock @ $47.10

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

Long Oct $50 call (HAL1319j50) entry $0.69

08/24/13 new stop loss @ 46.99
08/22/13 new stop loss @ 46.40

chart:



Constellation Brands Inc. - STZ - close: 54.25 change: -0.32

Stop Loss: 53.75
Target(s): 60.00
Current Gain/Loss: -2.0%

Entry on August 23 at $55.35
Listed on August 22, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.3 million
New Positions: see below

Comments:
08/31/13: The last four days have been a struggle for STZ. Overall profit taking has not been that bad. Yet shares did test the $54.00 level on Friday and if there is any follow through lower we could see STZ hit our stop at $53.75.

If STZ continues to follow the market lower the stock should see short-term support near $53.00 and then longer-term, technical support at the rising 100-dma (near 51.70).

I am not suggesting new positions a this time.

current Position: Long STZ stock @ $55.35

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

Long Oct $60 call (STZ1319j60) entry $0.70

08/24/13 new stop loss @ 53.75

chart:



BEARISH Play Updates

Darden Restaurants - DRI - close: 46.21 change: -0.34

Stop Loss: 48.25
Target(s): 44.25
Current Gain/Loss: +2.0%

Entry on August 26 at $47.16
Listed on August 24, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.2 million
New Positions: see below

Comments:
08/31/13: The sell-off in DRI continues with a -0.7% decline on Friday. Shares are now down four weeks in a row. I would not be surprised to see an oversold bounce back toward resistance at its 10-dma (near $47.00). I am not suggesting new positions at this time.

current Position: short DRI stock @ $47.16

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

Long Oct $45 PUT (DRI1319v45) entry $0.90

chart:



Fastenal Co. - FAST - close: 43.99 change: -0.47

Stop Loss: 45.01
Target(s): 40.25
Current Gain/Loss: unopened

Entry on August -- at $--.--
Listed on August 28, 2013
Time Frame: 3 to 6 weeks
Average Daily Volume = 1.5 million
New Positions: Yes, see below

Comments:
08/31/13: It looks like FAST's attempt at an oversold bounce is already failing. Shares reversed with a -1.0% decline on Friday. FAST looks poised to hit new relative lows soon. I don't see any changes from my Wednesday night new play comments.

Earlier Comments:
FAST looks poised to break down even further and the next level of support should be the $40.00 area. Tuesday's low was $43.75. I am suggesting a trigger to open bearish positions at $43.70. If triggered our target is $40.25. More aggressive traders may want to aim lower. The Point & Figure chart for FAST is bearish with a $37 target.

Trigger @ 43.70

Suggested Position: short FAST stock @ (trigger)

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

buy the Oct $40 PUT (FAST1319v40) current ask $0.55

chart:



Mellanox Technologies - MLNX - close: 39.42 change: +0.43

Stop Loss: 41.00
Target(s): 35.25
Current Gain/Loss: + 0.2%

Entry on August 21 at $39.50
Listed on August 20, 2013
Time Frame: 3 to 6 weeks
Average Daily Volume = 713 thousand
New Positions: see below

Comments:
08/31/13: MLNX gapped open higher on Friday morning but the bounce failed at round-number resistance near the $40.00 mark. While shares did pare their gains on Friday the stock did manage to outperform the major indices with a +1.1% gain.

I am not suggesting new positions. More conservative traders might want to lower their stops closer to the $40.00 level.

Earlier Comments:
I would keep position small because MLNX does have above average short interest at 15% of the 37.5 million share float. FYI: The Point & Figure chart for MLNX is bearish with a $27.00 target.

current Position: short MLNX stock @ $39.50

08/22/13 warning! MLNX has produced a one-day bullish reversal pattern

chart:



Meritage Homes Corp. - MTH - close: 39.92 change: -0.80

Stop Loss: 40.25
Target(s): 35.25
Current Gain/Loss: unopened

Entry on August -- at $--.--
Listed on August 27, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 691 thousand
New Positions: Yes, see below

Comments:
08/31/13: There was no follow through on Thursday's bounce in the homebuilders. MTH gave back -1.9% and is flirting with a close below the $40.00 mark again. We are still on the sidelines and waiting for a new relative low.

Earlier Comments:
We are suggesting a trigger to launch bearish positions at $38.40. If triggered our multi-week target is $35.25. FYI: The Point & Figure chart for MTH is bearish with a $31.00 target.

Trigger @ 38.40

Suggested Position: short MTH stock @ (trigger)

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

Buy the Oct $35 PUT (MTH1319v35)

chart:



CLOSED BULLISH PLAYS

J2 Global, Inc. - JCOM - close: 49.24 change: -0.80

Stop Loss: 49.40
Target(s): 57.50
Current Gain/Loss: - 3.1%

Entry on August 26 at $51.00
Listed on August 24, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 339 thousand
New Positions: see below

Comments:
08/31/13: Another widespread market drop on Friday was too much for shares of JCOM. The stock underperformed with a -1.59% decline and a breakdown to new two-week lows. Our stop loss was hit at $49.40.

closed Position: long JCOM stock @ $51.00 exit $49.40 (-3.1%)

08/30/13 stopped out at $49.40

chart:



Waste Connections - WCN - close: 42.36 change: -0.62

Stop Loss: 42.99
Target(s): 48.00
Current Gain/Loss: unopened

Entry on August -- at $--.--
Listed on August 26, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 336 thousand
New Positions: see below

Comments:
08/31/13: WCN is not cooperating. The stock's current pullback has been sharp enough to breakdown through significant technical support at the rising 50-dma. Now WCN's up trend is in jeopardy.

Our plan was to open positions at $44.25 but that is unlikely to happen any time soon. Tonight we're removing WCN as a candidate.

Trade Did Not Open

08/31/13 removed from the newsletter

chart:



CLOSED BEARISH PLAYS

Nuance Communications, Inc. - NUAN - close: 19.09 change: +0.78

Stop Loss: 19.05
Target(s): 15.15
Current Gain/Loss: unopened

Entry on August -- at $--.--
Listed on August 28, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 4.1 million
New Positions: see below

Comments:
08/31/13: We are dropping NUAN as a candidate. On Friday morning it was revealed in a new 13D filing that Carl Icahn had raised his stake in NUAN from 16.4% to 16.9%. Considering NUAN's recent poison pill to prevent any one investor from owning more than 20% I'm not sure how much an activist investor like Icahn can accomplish in NUAN.

Shares remain range bounce in the $18-20 zone. A breakout over $20 would be bullish. A drop under $18 would be bearish.

Tonight we are removing NUAN as a candidate since shares are not cooperating.

Trade did not open.

08/31/13 removed from the newsletter

chart: