Editor's Note:
We trimmed a few candidates off our play list tonight. Meanwhile stocks were struggling as small caps led the market lower again.

CNMD hit our stop loss.
Our plan was to close OAS, NDLS, WBAI, and YOKU today.


Current Portfolio:


BULLISH Play Updates

American Airlines Group Inc. - AAL - close $38.24

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:
05/20/14: AAL is still consolidating sideways. 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



Arrowhead Research - ARWR - close: 11.30 change: -0.43

Stop Loss: 10.75
Target(s): to be determined
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 19, 2014
Time Frame: 6 to 8 weeks
Average Daily Volume = 1.3 million
New Positions: Yes, see below

Comments:
05/20/14: ARWR rallied up to resistance at $12.00 and reversed. ARWR is a volatile stock so it's going to see big moves like this. There is no change from the Monday night new play description.

Earlier Comments:
ARWR is in the healthcare sector. The company is in the biotech industry. Biotech stocks peaked in early March as investors started selling momentum and high-growth names. ARWR was definitely a target for profit taking after a rally from $2.00 a share back in July 2013 to over $25 in March 2014.

Biotech analysts believe ARWR has a lot of potential. The company is working on a treatment for hepatitis B and should have new data available in the third quarter this year. If successful the hepatitis B treatment could be a multi-billion drug as there are over 300 million patients around the world. ARWR currently has a market cap of about $600 million but a Deutsche bank analysts believes ARWR's market cap could surge to $4-to-$5 billion if its hepatitis B treatment is approved. ARWR is also developing new treatments on its RNAi technology.

Make no mistake, this is an aggressive trade. ARWR is an early stage biotech firm with no revenues. Any investment is a belief they will bring successful clinical data and eventually get FDA approval for its drugs in development.

Technically after a drop from $25 to $10 most of the air has been let out of the prior bubble. As investors return to risk on trades we think ARWR could outperform.

Tonight we're suggesting a trigger to open bullish positions at $12.05. We'll start this trade with a stop loss at $10.75.

Trigger @ $12.05

Suggested Position: buy ARWR stock @ $12.05

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

buy the Sep $12.50 call (ARWR140920C12.5)



Delta Air Lines - DAL - close: 37.83 change: -0.56

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:
05/20/14: DAL erased yesterday's gain with a -1.45% decline. If DAL breaks down below its 20-dma (near 37.50) the next level of support is $37.00. 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.



BEARISH Play Updates

Financial Engines, Inc. - FNGN - close: 38.78 change: -1.05

Stop Loss: 42.25
Target(s): to be determined
Current Gain/Loss: - 0.1%

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:
05/20/14: Good news! This looks like a new entry point in FNGN. The stock underperformed today with a -2.6% decline. This appears to be a failure at resistance near $40.00 and its 10-dma.

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: 52.92 change: -0.41

Stop Loss: 56.15
Target(s): to be determined
Current Gain/Loss: + 2.9%

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:
05/20/14: JEC tested its May 15th lows and bounced. Shares still closed down -0.7% for the session. Any gains from here might make this look like a short-term bullish double bottom. 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




CLOSED BULLISH PLAYS

CONMED Corp. - CNMD - close: 47.09

Stop Loss: 47.40
Target(s): to be determined
Current Gain/Loss: - 5.7%

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:
05/20/14: Concerns have surfaced that CNMD is struggling with the process to sell itself. Investors didn't like the sound of that. Shares gapped down at $49.35 and then plunged to a -4.7% decline on the session. Our stop loss was hit at $47.40.

closed Position: Long CNMD stock @ $50.25 exit $47.40 (-5.7%)

05/20/14 stopped out
05/19/14 triggered @ 50.25

chart:



Oasis Petroleum - OAS - close: 48.04 change: +0.44

Stop Loss: 46.75
Target(s): to be determined
Current Gain/Loss: - 2.6%

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:
05/20/14: We decided in last night's newsletter that OAS was not cooperating. The plan was to exit this morning. Shares opened at $47.65.

Investors may want to keep OAS on their watch list for a close above $50.00 as a potential bullish entry point.

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

closed Position: Long OAS stock @ $48.91 exit $47.65 (-2.6%)

05/20/14 planned exit
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

chart:



CLOSED BEARISH PLAYS

Noodles & Co. - NDLS - close: 32.52 change: +0.11

Stop Loss: 33.25
Target(s): to be determined
Current Gain/Loss: -4.4%

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:
05/20/14: After yesterday's breakout above its 10-dma we decided to close our NDLS trade at the open this morning. Shares opened at $32.44.

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.

closed Position: short NDLS stock @ $31.08 exit $32.44 (-4.4%)

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

Jun $30 PUT (NDLS14R30) entry $1.55* exit $0.75** (-51.6%)

05/20/14 planned exit
**option exit price is an estimate since the option did not trade at the time our play was closed.
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.

chart:



500.com Limited - WBAI - close: 32.20 change: -1.18

Stop Loss: 34.05
Target(s): to be determined
Current Gain/Loss: - 5.7%

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:
05/20/14: Yesterday's breakout through WBAI's bearish channel may have been a fake. Shares rallied up to $34.47 and then reversed, giving back half of yesterday's gains. Our plan was to exit this morning so the gap down at $32.87 is a blessing.

More aggressive traders may want to keep WBAI on their watch list. A new drop under $31.00 could be another bearish entry point.

*Small positions*

closed Position: short WBAI stock @ $31.10 exit $32.87 (-5.7%)

05/20/14 planned exit
05/19/14 prepare to exit tomorrow morning
05/16/14 trade begins. WBAI opened at $31.10

chart:



Youku Tudou Inc. - YOKU - close: 21.00 change: -0.05

Stop Loss: 21.75
Target(s): 18.50 or exit on Tuesday at the close
Current Gain/Loss: +10.4%

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:
05/20/14: YOKU has earnings coming up soon on May 22nd. Our plan was to exit today at the closing bell to avoid holding over the announcement.

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*

closed Position: short YOKU stock @ $23.45 exit $21.00 (+10.4%)

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

Long Jun $20 PUT (YOKU1421R20) entry $1.05 exit $0.90 (-14.2%)

05/20/14 planned exit
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

chart: