Editor's Note:
The stock market managed a widespread bounce on Thursday. There was not any one factor driving stocks higher. Although oil's decline fueled a rebound in the transports.

Tomorrow morning will bring the April nonfarm payroll (jobs) report. Economists are expecting +224,000 new jobs.

IMAX has been removed. OVAS was stopped out this morning.


Current Portfolio:


BULLISH Play Updates

Allegheny Technologies - ATI - close: 34.80 change: -0.70

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:
05/07/15: The SLX steel ETF underperformed the broader market with a -1.7% decline. ATI was leading the group lower with a -1.97% drop and that's after paring its losses. I don't see any company-specific news behind today's weakness. If shares don't recover tomorrow we'll likely remove ATI as a candidate.

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




BEARISH Play Updates

Emerge Energy Services - EMES - close: 35.30 change: -2.65

Stop Loss: 41.25
Target(s): To Be Determined
Current Gain/Loss: +6.2%
Entry on May 07 at $37.65
Listed on May 06, 2015
Time Frame: 8 to 12 weeks
Average Daily Volume = 413 thousand
New Positions: , see below

Comments:
05/07/15: Our new bearish play on EMES is off to a strong start. Shares hit our suggested entry point at $37.65 early this morning. The stock accelerated lower with a -6.98% decline to close at new 52-week lows.

Trade Description: May 6, 2015:
The bubble in fracking sand and proppant stocks popped in 2014. The top in the fracking sand producers was just a couple of months after crude oil peaked last year. The impact of crude oil's decline and the industry's reaction to the oversupply-pricing issue will still be felt for months to come. Just as the oil and gas producers are cutting expenses, mothballing rigs, and delaying new projects, the proppant companies are forced to do the same. EMES recently announced they were canceling plans to build a new silica sand processing facility.

EMES is in the basic materials sector. They're part of the oil services industry. According to the company, "Emerge Energy Services LP (EMES) is a growth-oriented limited partnership engaged in the businesses of mining, producing, and distributing silica sand, a key input for the hydraulic fracturing of oil and natural gas wells. Emerge Energy also processes transmix, distributes refined motor fuels, operates bulk motor fuel storage terminals, and provides complementary fuel services. Emerge Energy operates its sand segment through its subsidiary Superior Silica Sands LLC and its fuel segment through its subsidiaries Direct Fuels LLC and Allied Energy Company LLC."

The earnings picture has been damaged by a very rough pricing environment for EMES' sand. Their Q4 2014 earnings, announced on March 2nd, were $1.01 per share. That was 12 cents below expectations. Q4 revenues were down -1.4% to $242.6 million compared to analysts' estimates of $301 million. That's a huge revenue miss.

The weakness continued in the first quarter. Wall Street was expecting EMES to report Q1 2015 earnings of $0.83 a share on revenues of $264 million. The company only delivered $0.39 per share with revenues down -25.5% to $204 million. The rest of 2015 is expected to remain challenging.

The stock was hammered again on April 24th when EMES management reduced their dividend from $1.41 per share down to $1.00.

The $40.00 level has been support and now shares are breaking down. The most recent data listed short interest at 13% of the very small 14.6 million share float. This time the shorts are probably right but the high short interest could make this a volatile trade. EMES' recent attempt at a bounce has been failing. We want to catch the next leg lower. Tonight we are suggesting a trigger to launch bearish positions at $37.65.

- Suggested Positions -

Short EMES stock @ $37.65

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

Long JUN $35 PUT (EMES150619P35) entry $2.35

05/07/15 triggered @ 37.65
Option Format: symbol-year-month-day-call-strike



CLOSED BULLISH PLAYS

IMAX Corp. - IMAX - close: 36.72 change: -0.36

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: see below

Comments:
05/07/15: Shares of IMAX did not participate in the market's widespread bounce today. Instead the stock fell for its third loss in a row. Considering this relative weakness we are removing IMAX as an active candidate.

Trade did not open.

05/07/15 removed from the newsletter, suggested entry was $38.25

chart:



CLOSED BEARISH PLAYS

OvaScience, Inc. - OVAS - close: 25.74 change: +1.25

Stop Loss: 27.25
Target(s): To Be Determined
Current Gain/Loss: -3.0%
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:
05/07/15: Sometimes stocks just refuse to cooperate. Our OVAS trade was looking pretty good as of yesterday's close.

This morning OVAS gapped open higher at $28.47, a +16.25% move, thanks to some news on its augment fertility treatment. This treatment is not approved in the U.S. yet. It's natural that bearish traders might react in a panic on any good news regarding this OVAS product. Today's news was the first birth of a baby (what else?) using the experimental fertility treatment.

The rally immediately failed at technical resistance near OVAS' converging 20-dma and 200-dma. Unfortunately our stop loss was $27.25 so the gap higher immediately closed our play.

- Suggested Positions -

Short OVAS stock @ $27.65 exit $28.47 (-3.0%)

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

JUN $25 PUT (OVAS150619P25) entry $2.95 exit $1.95 (-33.9%)

05/07/15 stopped out on gap open at $28.47
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

chart: