Editor's Note:
Federal Reserve Chairman Janet Yellen, in a conversation with IMF managing director Christine Lagarde, shared her opinion that stock valuations are "generally quite high". Her comments didn't help when stocks were already showing weakness thanks to another down day overseas.

Citigroup hags been removed as an active candidate.
CDW was closed. CSIQ hit our stop loss.


Current Portfolio:


BULLISH Play Updates

Allegheny Technologies - ATI - close: 35.50 change: +0.21

Stop Loss: 33.85
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on May -- at $---.--
Listed on May 05, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 1.0 million
New Positions: Yes, see below

Comments:
05/06/15: ATI outperformed the broader market with a +0.59% gain on Wednesday. Yet the rally stalled beneath the $36.00 level. Our suggested entry point for bullish positions is $36.05.

Trade Description: May 5, 2015:
It looks like shares of ATI have put in a bottom.

The company is in the industrial goods sector. According to ATI, "Allegheny Technologies Incorporated is one of the largest and most diversified specialty materials and components producers in the world with revenues of approximately $4.4 billion for the last twelve months. ATI has approximately 9,600 full-time employees world-wide who use innovative technologies to offer global markets a wide range of specialty materials solutions. Our major markets are aerospace and defense, oil and gas/chemical process industry, electrical energy, medical, automotive, food equipment and appliance, and construction and mining."

ATI's most recent earnings report was April 21st. Management said their Q1 2015 earnings were $0.09 a share. Depending on who you polled ATI's nine cent profit was either one cent above or one cent below analysts' estimates. Whatever the case their $0.09 profit was a big improvement from the $0.19 loss a year ago. Revenues for Q1 2015 were up +14% from a year ago to $1.13 billion, which was above analysts estimates.

ATI saw a big improvement from their Q4 with sales up +7% sequentially. This helped drive a +25% improvement in operating profits.

ATI President and CEO Rich Harshman commented on their results, "Aerospace market sales increased 14% in the first quarter 2015 compared to the fourth quarter 2014. We saw double-digit demand growth from both jet engine and airframe customers of 14% and 22%, respectively. First quarter aerospace demand was led by organic growth of our mill products. Sales of our nickel-based alloys and specialty alloys increased 15% and sales of our titanium alloys grew 16% with a good mix of value-added mill products. We expect sales growth of our precision forgings, castings, and components to begin later this year supported by the build ramp of next-generation jet engines."

Looking ahead ATI expects demand from the oil and gas market to remain soft. However, demand from the airframe and jet engine makers should be strong throughout 2015.

The stock broke out from a consolidation pattern on its better than expected Q1 earnings. This helped generate a buy signal on the point & figure chart, which is currently forecasting at $47.00 target. Shares of ATI spent a few days struggling with technical resistance at its 200-dma but they have broken out past this level as well. The past seven months looks like a massive bottoming process for the stock. Now shares are on the verge of breaking out past key resistance in the $35-36 area. We want to use a trigger at $36.05 to launch bullish positions.

FYI: ATI's next dividend ($0.18) is this month. The ex-dividend date is May 22nd. The shareholder record date is May 27th.

Trigger @ $36.05

- Suggested Positions -

Buy ATI stock @ $36.05

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

Buy the JUL $37.50 CALL (ATI150717C37.50)

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike


IMAX Corp. - IMAX - close: 37.08 change: -0.32

Stop Loss: 36.35
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on May -- at $---.--
Listed on May 02, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 617 thousand
New Positions: Yes, see below

Comments:
05/06/15: Shares of IMAX retreated from its recent highs posting its second decline in a row. The stock briefly traded below its simple 20-dma before trimming its losses.

We are on the sidelines waiting for a new high. Our suggested entry point is $38.25.

Trade Description: May 2, 2015:
It's only May 2nd but the summer movie blockbuster party has already started with the "Avengers: Age of Ultron" hitting theaters this weekend. Ultron just delivered the second biggest opening day with $84.4 million in U.S. sales. That's just below the last Harry Potter movie, which brought in $91 million on its first day.

This Avengers 2 movie has already raked in $425 million overseas and is poised to do more than $200 million this weekend. Estimates suggest it could hit $600 million in the U.S. This movie is produced by Marvel Studios, a division of Disney (DIS), but it also means big business for IMAX. The Ultron movie delivered the biggest opening night sales for any IMAX film ever.

IMAX is part of the services sector. They're considered part of the entertainment industry. According to the company, "IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theatres to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe. IMAX is headquartered in New York, Toronto and Los Angeles, with offices in London, Tokyo, Shanghai and Beijing. As of March 31, 2015, there were 943 IMAX theatres (820 commercial multiplexes, 18 commercial destinations and 105 institutions) in 63 countries."

Today there is a battle for consumer's viewing habits. People consume their content on all sorts of devices from their smartphones, tablets, laptops, desktops, and their big screen TVs at home. Netflix and other streaming services have changed viewer habits and expectations. When consumers choose to go to the movies they want something different. According to IMAX's CEO that's why IMAX tickets are doing so well. It's an experience that can't be replicated at home.

The company had a lot of momentum going into 2015 thanks to huge hits like "American Sniper". IMAX has managed to beat Wall Street's earnings and revenue estimates for the last four quarters in a row. Their most recent earnings report was April 30th. Income surged +50% from a year ago. Analysts were expecting $0.05 a share. IMAX delivered $0.07. Revenues rose +29% to $62.2 million, significantly above estimates for $55.4 million.

IMAX CEO Richard Gelfond commented on their results, "This is a very exciting time for IMAX. Our continued progress in expanding our theatre network globally, along with our strong film performance during the first quarter, resulted in robust financial results with almost 30% revenue growth and over 50% adjusted earnings growth compared to the same period last year. With record results from Furious 7 in April and a great start to the Avenger's sequel internationally, the momentum has continued into the second quarter."

2015 is expected to be a huge year. The "Fast & Furious 7" film kept the momentum going. IMAX will also benefit from high-profile movies like "Avengers: Age of Ultron", the new James Bond movie, another Mission Impossible film, and the next episode of Star War (#7) this December.

IMAX is rolling out new laser systems and they've signed long-term film deals with Disney and Warner Brothers. IMAX is currently growing at about 120 theaters a year. They're doing well in China. The Chinese movie box office is expected to eclipse the U.S. market by 2020.

Shares of IMAX look bullish with the stock trading at all-time highs. Currently the stock us hovering just below short-term resistance at $38.00. A breakout here could fuel some short covering. The most recent data listed short interest at 20% of the 58.6 million share float. We are suggesting a trigger to launch bullish positions at $38.25.

Trigger @ $38.25

- Suggested Positions -

Buy IMAX stock @ $38.25

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

Buy the SEP $40 CALL (IMAX150918C40)

Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.

Option Format: symbol-year-month-day-call-strike




BEARISH Play Updates

OvaScience, Inc. - OVAS - close: 24.49 change: +0.02

Stop Loss: 27.25
Target(s): To Be Determined
Current Gain/Loss: +11.4%
Entry on April 28 at $27.65
Listed on April 27, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 725 thousand
New Positions: see below

Comments:
05/06/15: The biotech index and ETFs managed a small oversold bounce today. OVAS also delivered a bounce by an extremely thin margin. This failure to follow the industry high is a good signal if you're bearish.

We are moving our stop loss down to $27.25. I am not suggesting new positions.

Trade Description: April 27, 2015:
A report published by Allied Market Research suggested the global in-vitro fertilization (IVF) market was about $9 billion in 2012. Demand is expected to grow the market to more than $21 billion by 2020. OVAS believes their AUGMENT treatment is a huge step in boosting a woman's ability to get pregnant.

Here's a brief description of the company, "OvaScience (OVAS) is a global fertility company dedicated to improving treatment options for women around the world. OvaScience is discovering, developing and commercializing new fertility treatments because we believe women deserve more options. Each OvaScience treatment is based on the Company’s proprietary technology platform that leverages the breakthrough discovery of egg precursor (EggPCSM) cells – immature egg cells found inside the protective ovarian lining. The AUGMENTSM treatment, a fertility option specifically designed to improve egg health, is available in certain IVF clinics in select international regions outside of the United States. OvaScience is developing the OvaPrimeSM treatment, which could increase a woman's egg reserve, and the OvaTureSM treatment, a potential next-generation IVF treatment that could help a woman produce healthy, young, fertilizable eggs without hormone injections."

Excitement over the company's prospects helped drive the stock from less than $10 in August 2014 to an all-time high of $55 in late March 2015. Unfortunately, the stock has reversed lower as the market tries to decipher the data on OVAS' progress. The FDA has prevented OVAS' treatment in the U.S. Critics complain that OVAS has not published any animal studies. There is concern that the procedure might endanger the child. Thus far the handful of tests done outside the U.S. look more like experiments than clinical trials.

Investors have decided to shoot first and ask questions later. That explains the sudden and sharp reversal lower in OVAS' stock. It's not just traders who have turned cautious. Zacks noted that multiple analysts have reduced their estimates on the company.

Technically OVAS is in a bear market with a -47% drop from its closing high. The point & figure chart is bearish with a long-term target at $7.00. The oversold bounce in early April failed and now OVAS is about to breakdown below technical support at its 200-dma. The next stop could be $20.00 if OVAS does close below support near $28.00.

Tonight we are suggesting a trigger to launch small bearish positions at $27.65. We want to limit our position size because this is a high-risk, more aggressive trade. Biotech stocks are normally risky since we never know when the next headline might send the stock soaring or crashing. Traders may want to use options to limit their risk.

- Suggested Positions -

Short OVAS stock @ $27.65

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

Long JUN $25 PUT (OVAS150619P25) entry $2.95

05/06/15 new stop @ 27.25
04/29/15 new stop @ 29.45
04/28/15 triggered @ 27.65
Option Format: symbol-year-month-day-call-strike



CLOSED BULLISH PLAYS

Citigroup Inc. - C - close: 52.82 change: -0.53

Stop Loss: 52.20
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on May -- at $---.--
Listed on May 04, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 19.2 million
New Positions: , see below

Comments:
05/06/15: Citigroup is not cooperating. I warned readers last night that if shares of C continued to sink we would have to rethink our strategy. The stock underperformed both the financial sector and the broader market indices with a -0.99% decline today. We are choosing to remove C as an active candidate.

Trade did not open.

05/06/15 removed from the newsletter, suggested entry was $54.65

chart:


CDW Corp. - CDW - close: 38.64 change: -0.23

Stop Loss: 38.25
Target(s): To Be Determined
Current Gain/Loss: -0.0%
Entry on April 13 at $38.65
Listed on April 09, 2015
Time Frame: Exit PRIOR to earnings on May 7th
Average Daily Volume = 1.0 million
New Positions: see below

Comments:
05/06/15: Our plan was to exit the CDW trade today at the closing bell. Shares dipped to $38.34 intraday before paring its losses. The company reports earnings tomorrow.

- Suggested Positions -

Long CDW stock @ $38.65 exit $38.64 (-0.0%)

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

MAY $40 CALL (CDW150515C40) entry $0.90 exit $0.35 (-61.1%)

05/06/15 planned exit
05/05/15 new stop @ 38.25, prepare to exit tomorrow at the close
05/04/15 new stop @ 37.85
05/02/15 plan on exiting prior to earnings on May 7th
04/29/15 new stop @ 37.40
04/13/15 triggered @ 38.65
Option Format: symbol-year-month-day-call-strike

chart:


Canadian Solar Inc. - CSIQ - close: 34.64 change: -1.28

Stop Loss: 35.40
Target(s): To Be Determined
Current Gain/Loss: -4.5%
Entry on April 28 at $37.05
Listed on April 23, 2015
Time Frame: Exit prior to earnings on May 7th
Average Daily Volume = 2.7 million
New Positions: see below

Comments:
05/06/15: We were also planning to exit CSIQ today at the closing bell since it will also report earnings tomorrow. Unfortunately the stock collapsed on us. Shares fell -3.5% and broke its trend of higher lows. The stock hit our stop loss at $35.40.

- Suggested Positions -

Long CSIQ stock @ $37.05 exit $35.40 (-4.5%)

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

MAY $37 CALL (CSIQ150515C37) entry $2.05 exit $1.23 (-40.0%)

05/06/15 stopped out
05/05/15 prepare to exit tomorrow at the close
05/04/15 new stop @ 35.40
05/02/15 plan on exiting prior to earnings on May 7th
04/28/15 triggered @ 37.05
Option Format: symbol-year-month-day-call-strike

chart: