Editor's Note:
The stock market's major indices closed near their highs for the session. That is typically bullish for tomorrow morning.

AIQ and RNF were triggered. KIM was stopped out.
We are removing AIZ, FAST and IDCC.


Current Portfolio:


BULLISH Play Updates

Alliance Healthcare Services - AIQ - close: 25.06 change: -0.40

Stop Loss: 23.45
Target(s): 29.50
Current Gain/Loss: -2.5%

Entry on September 04 at $25.70
Listed on September 03, 2013
Time Frame: 4 to 8 weeks
Average Daily Volume = 120 thousand
New Positions: see below

Comments:
09/04/13: Hmm... I am urging caution on our new AIQ play. The stock displayed some extra volatility today. The morning saw a small gap higher followed by a quick spike to new 52-week highs and then the rally ran out of steam. AIQ actually underperformed the market with a -1.5% decline. Traders did buy the dip near short-term support at the 10-dma. Unfortunately I am concerned that this false breakout past its early August high might be a warning signal. The stock did hit our suggested entry point at $25.70 so our play is open.

I would wait for a new rise past $25.70 before considering new positions. We're also going to take a more aggressive stance on our stop loss and move it down to $23.45, which increases our risk.

*small positions*

current Position: Long AIQ stock @ $25.70

09/04/13 adjust stop loss down to $23.45



Halliburton Company - HAL - close: 49.08 change: +0.78

Stop Loss: 46.99
Target(s): 49.85
Current Gain/Loss: + 4.2%

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:
09/04/13: Oil service stocks outperformed the rest of the energy sector today. HAL rebounded from support near $48 and its 10-dma to close up +1.6%. Shares look poised to challenge round-number resistance at $50.00 soon.

Our exit target is $49.85. More aggressive traders may want to aim higher instead.

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



Constellation Brands Inc. - STZ - close: 56.01 change: +0.83

Stop Loss: 53.75
Target(s): 60.00
Current Gain/Loss: +1.2%

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:
09/04/13: STZ spiked higher this morning before the rally stalled at resistance near $56.00. Shares outperformed the market with a +1.5% gain.

Our short-term target is $60.00 but if you're patient you might want to aim higher.

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



BEARISH Play Updates

Darden Restaurants - DRI - close: 46.77 change: +0.56

Stop Loss: 48.25
Target(s): 44.25
Current Gain/Loss: +0.8%

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:
09/04/13: Uh-oh! The +1.2% rebound in DRI is starting to look like a potential bullish reversal. Shares are once again testing short-term resistance at the 10-dma. More conservative traders will want to seriously consider adjusting their stop loss lower. 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



Mellanox Technologies - MLNX - close: 38.56 change: +0.55

Stop Loss: 40.15
Target(s): 35.25
Current Gain/Loss: + 2.4%

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:
09/04/13: The semiconductor sector was one of the market's best performers today with the SOX index up +2.5%. MLNX managed a +1.4% gain but failed to breakout past resistance near the 10-dma. I am adjusting our stop loss lower from $41.00 to $40.15.

I am not suggesting new positions.

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

09/04/13 new stop loss @ 40.15
08/22/13 warning! MLNX has produced a one-day bullish reversal pattern



Meritage Homes Corp. - MTH - close: 39.36 change: -0.38

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:
09/04/13: MTH continues to sink with the stock now down three days in a row. We're still waiting for a drop below support.

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)



Rentech Nitrogen Partners - RNF - close: 24.75 change: +0.04

Stop Loss: 25.75
Target(s): 21.00
Current Gain/Loss: - 0.6%

Entry on September 04 at $24.60
Listed on September 03, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 167 thousand
New Positions: see below

Comments:
09/04/13: We did not have to wait long for RNF to hit our entry trigger at $24.60. The stock gapped down to open at $24.60 this morning. The stock found some strength midday and bounced but gains were mild. I would still consider new bearish positions now at current levels or you could wait for a new relative low (below $24.36).

Our target is $21.00. Investors may want to aim lower since the Point & Figure chart for RNF is bearish with a $17.00 target.

current Position: short RNF stock @ $24.60

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

Long Oct $25 PUT (RNF1319v25) entry $1.60



CLOSED BEARISH PLAYS

Assurant Inc. - AIZ - close: 54.46 change: +0.60

Stop Loss: 54.05
Target(s): 48.00
Current Gain/Loss: unopened

Entry on September -- at $--.--
Listed on August 31, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 590 thousand
New Positions: see below

Comments:
09/04/13: The bounce in AIZ continued on Wednesday. It is possible that the rebound could fail right here after testing the simple 10-dma and 20-dma intraday. Yet it seems unlikely that AIZ is going to hit our suggested entry point at $52.75 soon. Tonight we are removing AIZ as an active candidate.

Trade did not open.

09/04/13 removed from the newsletter. Trigger was $52.75

chart:



Fastenal Co. - FAST - close: 45.84 change: +0.84

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: see below

Comments:
09/04/13: Shares of FAST continue to bounce. The stock flirted with a breakdown below support last week but this week has been positive. Tonight we are removing FAST as a candidate. Our trade did not open.

Trade did not open.

09/04/13 removed from the newsletter. Trigger was $43.70

chart:



InterDigital, Inc. - IDCC - close: 37.22 change: +1.42

Stop Loss: 36.25
Target(s): 30.25
Current Gain/Loss: unopened

Entry on September -- at $--.--
Listed on August 31, 2013
Time Frame: 4 to 8 weeks
Average Daily Volume = 342 thousand
New Positions: see below

Comments:
09/04/13: IDCC refuses to breakdown below support near the $35.00 level. Instead shares are bouncing and they outperformed the market with a +3.9% gain today. IDCC was trading even higher after hours tonight with the stock in the $39-40 area.

We are removing IDCC as a candidate.

Trade did not open.

09/04/13 removed from the newsletter. Trigger was 34.85

chart:



Kimco Realty - KIM - close: 20.29 change: +0.40

Stop Loss: 20.35
Target(s): 18.25
Current Gain/Loss: - 2.8%

Entry on September 03 at $19.80
Listed on August 31, 2013
Time Frame: 6 to 8 weeks
Average Daily Volume = 2.9 million
New Positions: see below

Comments:
09/04/13: KIM is being a little too volatile for us. Yesterday the stock failed at resistance near the 10-dma and then plunged to a new multi-month low to hit our suggested entry trigger at $19.80. This morning saw KIM gap open lower and then surge higher. Shares outperformed the market with a +2.0% gain and it traded above resistance at its 10-dma, hitting our stop loss at $20.35 in the process. Technically today's move has created a bullish engulfing candlestick reversal pattern.

closed Position: short KIM stock @ $19.80 exit $20.35 (-2.8%)

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

Oct $20 PUT (KIM1319v20) entry $0.95 exit $0.60 (-36.8%)

09/04/13 stopped out as KIM creates a bullish reversal pattern

chart: