Editor's Note:
The stock market continued to drift higher on Monday.

CNMD hit our entry trigger.
MDSO and PEIX were closed this morning.
We want to exit OAS, NDLS, and WBAI tomorrow morning.
Plan on exiting YOKU tomorrow at the close.


Current Portfolio:


BULLISH Play Updates

American Airlines Group Inc. - AAL - close $38.57

Stop Loss: 37.25
Target(s): to be determined
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 17, 2014
Time Frame: 9 to 12 weeks
Average Daily Volume = 10.3 million
New Positions: Yes, see below

Comments:
05/19/14: AAL delivered a quiet Monday performance. Shares churned sideways near the $38.50 level. I do not see any changes from our weekend newsletter's new play description.

Earlier Comments:
AAL is in the services sector. AAL is the merger between US Airways and American Airlines (AMR). The new company, American Airlines Group, is the largest carrier with nearly 6,7000 flights a day, over 330 destinations, to more than 50 countries, with over 100,000 employees worldwide.

This $17 billion merger was threatened by the U.S. Justice department last year. Regulators tried to block the merger on fears the new company would be too big, hold too much power, and reduce competitiveness and thus pricing for consumers. A U.S. district judge just recently approved a settlement worked out between AAL and the Justice Department where the new company agreed to sell certain assets to competitors. Getting the legal hurdle for its merger out of the way it's one more worry that investors can forget.

The airlines would also like to forget about winter. The 2014 winter season was brutal for the airline industry. In January and February the Bureau of Transportation Statistics said 6.05% of all domestic flights were cancelled. That number dropped to 4.6% of all flights cancelled in March. Put them all together and you have the worst winter cancellation rate in 20 years. Yet this news has failed to stop the rally in airline stocks. Granted AAL did consolidate sideways for a few weeks but now it is only a couple of points away from new eight year highs.

AAL just recently released data on April. Their revenue passenger miles for April were up 4.7 percent to 18.1 billion in 2014 versus April 2013. Odds are this number is going to improve since summers tend to be more bullish for the airline business.

Wall Street seems keen on shares of AAL. Goldman Sachs recently put a $46 price target on the stock. In the latest 13F filings it was revealed that Paulson & Co had raised their stake in AAL from 8.5 million shares to 12.2 million. Meanwhile David Tepper is the hot fund manager everyone loves and his Appaloosa Management has AAL as its second largest holding. In the last quarter Appaloosa increased their AAL stake by 22.5%.

On a short-term basis shares of AAL are sitting just below resistance at $40.00. I am suggesting a trigger to launch bullish positions at $40.25. We'll start with a stop loss at $37.25, just under this past week's low. I'm not setting an exit target yet but probably somewhere in the $45-50 zone.

Trigger @ $40.25

Suggested Position: buy AAL stock @ (trigger)

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

Buy the Aug $40 call (AAL140816C40)

option format: symbol-year-month-day-call-strike



CONMED Corp. - CNMD - close: 49.45

Stop Loss: 47.40
Target(s): to be determined
Current Gain/Loss: - 1.6%

Entry on May 19 at $50.25
Listed on May 17, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 236 thousand
New Positions: see below

Comments:
05/19/14: Our brand new play on CNMD is open. The stock shot higher this morning and broke through resistance at the $50.00 level. CNMD hit our suggested entry trigger at $50.25 before reversing lower. The close back below the $50.00 mark is a bit worrisome. CNMD did find some support near $49.20 this afternoon.

I would wait for a new rally above $50.00 before considering new positions.

Earlier Comments:
CNMD is in the healthcare sector. The company provides surgical devices and equipment for minimally invasive procedures. CNMD's most recent earnings report was a bit disappointing. They beat the bottom line estimate by two cents but missed the revenue estimate. Management lowered their Q2 revenue guidance but reaffirmed their full year guidance. Shares plunged on the news but it proved to be a one-day drop as traders have been buying the dips.

The question is why are investors buying the dips in CNMD? The stock soared back on April 15th when Reuters reported that CNMD had asked its advisors to find potential bidders to buy the company. This decision from CNMD might be a response to activist investors pushing the company to do more for shareholders. One analysts firm is estimating the company could go for $59 a share of acquired.

Current Position: Long CNMD stock @ $50.25

05/19/14 triggered @ 50.25



Delta Air Lines - DAL - close: 38.39 change: +0.53

Stop Loss: 36.45
Target(s): to be determined
Current Gain/Loss: + 2.0%

Entry on May 05 at $37.65
Listed on May 03, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 13.5 million
New Positions: see below

Comments:
05/19/14: DAL displayed some relative strength today with a +1.39% gain. The bounce back above its simple 10-dma is a positive sign. More conservative traders may want to adjust their stop higher. I am not suggesting new positions at this time.

Current Position: long DAL stock @ $37.65

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

Long Sept $40 call (DAL1420i40) entry $2.20*

05/12/14 new stop @ 36.45
05/07/14 new stop @ 35.75
05/05/14 triggered @ 37.65
*option entry price is an estimate since the option did not trade at the time our play was opened.



Oasis Petroleum - OAS - close: 47.60 change: -0.18

Stop Loss: 46.75
Target(s): to be determined
Current Gain/Loss: - 2.7%

Entry on May 13 at $48.91
Listed on May 12, 2014
Time Frame: 6 to 12 weeks
Average Daily Volume = 1.9 million
New Positions: see below

Comments:
05/19/14: OAS is not working out for us. The stock underperformed the market today with a -0.3% decline. OAS should still have technical support at its rising 20-dma (currently near $47.15). We the lack of participation in the market's rally as a potential warning signal.

We're suggesting an immediate exit tomorrow morning.

Earlier Comments:
More conservative investors may want to wait for a close above the $50.00 level as an alternative entry point.

current Position: Long OAS stock @ $48.91

05/19/14 prepare to exit tomorrow morning
05/17/14 new stop @ 46.75
05/13/14 trade opened on gap higher at $48.91



BEARISH Play Updates

Financial Engines, Inc. - FNGN - close: 39.83 change: +0.54

Stop Loss: 42.25
Target(s): to be determined
Current Gain/Loss: - 2.8%

Entry on May 14 at $38.75
Listed on May 13, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 567 thousand
New Positions: see below

Comments:
05/19/14: Today's widespread market gain helped FNGN bounce +1.3%. Shares are now testing what should be resistance at $40.00 and its 10-dma. A reversal here at current levels could be used as a new bearish entry point.

Earlier Comments:
FYI: The most recent data listed short interest at about 13% of the 50.4 million share float.

current Position: short FNGN stock @ $38.75

05/14/14 triggered @ 38.75



Jacobs Engineering Group - JEC - close: 53.33 change: +0.05

Stop Loss: 56.15
Target(s): to be determined
Current Gain/Loss: + 2.1%

Entry on May 15 at $54.48
Listed on May 14, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.4 million
New Positions: see below

Comments:
05/19/14: The sell-off in JEC paused today. The good news is that shares did not participate in the market's widespread rally. I am not suggesting new positions at this time.

current Position: short JEC stock @ $54.48

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

Long Jun $55 PUT (JEC140621P55) entry $1.65**

05/17/14 new stop @ 56.15
05/15/14 trade opened at $54.48
**option entry price is an estimate since the option did not trade at the time our play was opened.
*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike



Noodles & Co. - NDLS - close: 32.41 change: +0.78

Stop Loss: 33.25
Target(s): to be determined
Current Gain/Loss: -4.3%

Entry on May 09 at $31.25
Listed on May 08, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 288 thousand
New Positions: see below

Comments:
05/19/14: The bounce in NDLS is accelerating. Shares broke through their 10-dma and closed above the $32.00 level today. That's bad news if you're bearish on the stock. We are suggesting an immediate exit tomorrow morning.

Earlier Comments:
There are already a lot of bears in the name with the most recent data listing short interest at 27% of the 21.2 million share float. That does raise our risk of a short squeeze and investors might want to buy puts instead of shorting the stock.

current Position: short NDLS stock @ $31.08

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

Long Jun $30 PUT (NDLS14R30) entry $1.55*

05/19/14 prepare to exit tomorrow morning
05/09/14 triggered on gap down at $31.08, suggested entry point was $31.25
*option entry price is an estimate since the option did not trade at the time our play was opened.



500.com Limited - WBAI - close: 33.38 change: +2.24

Stop Loss: 34.05
Target(s): to be determined
Current Gain/Loss: - 7.3%

Entry on May 16 at $31.10
Listed on May 15, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 389 thousand
New Positions: see below

Comments:
05/19/14: Uh-oh! WBAI has been trading inside a bearish channel for weeks. Yet today's big rally (+7.1%) looks like a potential breakout through the top of its bearish channel. We are suggesting an immediate exit tomorrow morning.

*Small positions*

Suggested Position: short WBAI stock @ $31.10

05/19/14 prepare to exit tomorrow morning
05/16/14 trade begins. WBAI opened at $31.10



Youku Tudou Inc. - YOKU - close: 21.05 change: +0.45

Stop Loss: 21.75
Target(s): 18.50 or exit on Tuesday at the close
Current Gain/Loss: +10.2%

Entry on April 28 at $23.45
Listed on April 26, 2014
Time Frame: exit PRIOR to earnings on May 22nd.
Average Daily Volume = 4.1 million
New Positions: see below

Comments:
05/19/14: The widespread market gains today helped YOKU bounce from support. Our plan is to exit tomorrow at the closing bell but more conservative traders may want to exit tomorrow morning instead.

Earlier Comments:
I would consider this an aggressive trade because YOKU can be a volatile stock and the most recent data listed short interest at 8% of the 80.6 million share float. FYI: The P&F chart is very bearish and forecasting at $10 target.

*small positions*

current Position: short YOKU stock @ $23.45

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

Long Jun $20 PUT (YOKU1421R20) entry $1.05

05/19/14 prepare to exit tomorrow at the close
05/17/14 new stop @ 21.75, new target @ 18.50, plan on exiting on Tuesday at the closing bell if YOKU does not hit our stop or target first.
05/10/14 new stop @ 22.40
05/08/14 new stop @ 22.60
05/07/14 testing the $20.00 level, readers may want to take profits right here!
05/05/14 new stop @ 23.60
04/28/14 triggered @ 23.45



CLOSED BEARISH PLAYS

Medidata Solutions - MDSO - close: 37.11 change: +1.27

Stop Loss: 36.55
Target(s): to be determined
Current Gain/Loss: - 3.9%

Entry on May 15 at $34.45
Listed on May 14, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.9 million
New Positions: see below

Comments:
05/19/14: MDSO was not cooperating with us last week. We decided in the weekend newsletter to exit immediately this morning. Shares opened at $35.81 before surging to a +3.5% gain.

closed Position: short MDSO stock @ $34.45 exit $35.81 (-3.9%)

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

Jul $35 PUT (MDSO140719P35) entry $3.30** exit $2.40*** (-27.2%)

05/19/14 planned exit
***option exit price is an estimate since the option did not trade at the time our play was closed.
05/17/14 prepare to exit on Monday morning
05/15/14 trade opened at $34.45
**option entry price is an estimate since the option did not trade at the time our play was opened.
*I've provided the more standardized option symbol format.
symbol-year-month-day-put-strike

chart:



Pacific Ethanol, Inc. - PEIX - close: 12.32 change: +0.67

Stop Loss: 13.05
Target(s): to be determined.
Current Gain/Loss: +13.8%

Entry on May 05 at $13.25
Listed on May 01, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 2.2 million
New Positions: see below

Comments:
05/19/14: It looked like PEIX had found a bottom last week. Our plan was to exit positions this morning. The stock actually gapped down at $11.42 providing us a better exit.

*small positions*

closed Position: short PEIX stock @ $13.25 exit $11.42 (+13.8%)

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

Jun $12.50 PUT (PEIX1421R12.5) entry $1.15* exit $1.60** (+39.1%)

05/19/14 planned exit this morning
05/17/14 prepare to exit on Monday morning
05/09/14 1st target hit to sell half at $10.50
PEIX exit (1/2) at $10.50 (+20.7%)
PEIX Jun $12.50 PUT exit (1/2) at $10.50, option $2.65 (+130.4%)
option exit price is an estimate since the option did not trade at the time our play was closed.
05/07/14 new stop @ 13.05
We want to exit HALF of our position(s) at $10.50
05/06/14 new stop @ 13.75
05/05/14 triggered @ 13.25
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart: