CALL Play Updates

Euro Currency ETF - FXE - close: 142.15 chg: +0.20 stop: 139.40

The FXE spent most of last week churning sideways but the general trend is still up. Nothing has changed for us. I wouldn't be surprised to see a dip back toward $141.00 or $140.00. Our first target is $144.50. Our second target is $148.50. The P&F chart is bullish with a $168 target.

Suggested Options:
If we see another dip near $140 I would use the September calls.

Annotated Chart:

Picked on     June 23 at $140.76
Change since picked:      + 1.39
Earnings Date           00/00/00
Average Daily Volume =       461 thousand    
Listed on  June 23, 2009         


Gold Miner ETF - GDX - close: 39.90 change: -0.06 stop: 36.49 *new*

Unfortunately, gold also churned sideways last week and the GDX followed suit by hovering around the $40.00 level. I'm raising our stop loss to $36.49. More conservative traders may want to adjust theirs higher toward $38.00. I'm not suggesting new bullish positions in the GDX at this time. GDX has already exceeded our first target. Our second target is $42.40.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on     July 13 at $ 36.49 /gap higher entry
                               /originally listed at $35.93
Change since picked:      + 3.41
            gap higher exit   /1st target hit @ 39.95 (+9.4%)
Earnings Date           00/00/00
Average Daily Volume =       6.8 million  
Listed on  July 13, 2009         


O'Reilly Automotive - ORLY - close: 41.07 change: -0.03 stop: 39.95

ORLY managed to hit new highs last week but the upward momentum has stalled. Last week was more of a sideways consolidation. Earnings are due out on July 29th after the closing bell. We will plan to exit on Wednesday at the close. I'm not suggesting new positions at this time. Our first target is $44.00.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on     July 13 at $ 40.00
Change since picked:      + 1.07
Earnings Date           07/29/09 (confirmed)
Average Daily Volume =       1.9 million  
Listed on  July 13, 2009         


Polaris - PII - close: 36.12 change: -0.21 stop: 31.45

We've been waiting for a pull back in PII to launch positions. Yet after Thursday's high a pull back from here is going to look like a potential double top, which is bearish. The stock appears to have support at $34, 32 and 30, which is easier to see on an intraday chart. Normally you would think that falling consumer confidence would be bad for a company like PII and its high-end, discretionary products. Yet the stock is showing strength and the stock's P&F chart is bullish with a $49 target. I am suggesting readers stick to our plan and wait for a dip in the $33.00-32.00 zone with a tight stop at $31.45. Our first target is $37.25. Our second target is $39.50.

Suggested Options:
I am suggesting the September $35 and $40 calls.

Annotated Chart:

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           07/16/09 (confirmed)
Average Daily Volume =       436 thousand 
Listed on  July 18, 2009         


PUT Play Updates

Compass Minerals Intl. - CMP - cls: 48.79 change: +1.90 stop: 51.05

Is this a bullish reversal in CMP? The stock almost erased Thursday's losses with a sharp 4% gain on Friday. Volume was above average but not even close to the volume on Thursday's drop. The overall trend is down and I remain bearish but we're running out of time. We will plan to exit on Tuesday, July 28th at the closing bell to avoid holding over earnings later that evening. CMP has exceeded our first target at $47.50 and I am adjusting our second target to $45.50.

Suggested Options:
No new plays at this time.

Annotated Chart:

Picked on     July 06 at $ 52.25 *triggered     
Change since picked:      - 3.46
                               /1st target hit @ 47.50 (-9.0%)
Earnings Date           07/28/09 (confirmed)
Average Daily Volume =       792 thousand 
Listed on  June 29, 2009         


Genzyme Corp. - GENZ - close: 52.78 change: +0.61 stop: 54.15

I was expecting more follow through lower after Thursday's failed rally near previous support. I would still consider new bearish positions here but readers may want to wait for a new drop under Friday's low near $51.60. Remember, we want to launch the first half of our position now and the second half of our position at $49.90. Our first target is $45.50. Our second, multi-week target is $40.50.

Suggested Options:
I'm suggesting the August and September puts for the shorter-term trades and the September-October puts for the longer-term ($40-target) trades.

Annotated Chart:

1st Entry on  July 23 at $ 52.17 *1/2 of position
2nd Entry on  July xx at $ xx.xx (2nd half @ trigger 49.90)
Change since picked:      + 0.61
Earnings Date           07/22/09 (confirmed)
Average Daily Volume =       2.8 million  
Listed on  July 22, 2009         


LEAP Wireless - LEAP - close: 25.95 change: +0.07 stop: 29.45

It's tough to profit on bearish plays with the market in rally mode but LEAP continues to under perform the market. I would wait and watch for a failed rally near $27.00 (maybe $28.00) as a new bearish entry point to buy puts. Our first target is $22.65. Our second target is $20.25. The $22.50 level could be strong support so I suggest readers take off most of their position there. FYI: The P&F chart is bearish with a $19.00 target.

Suggested Options:
If LEAP provides a new entry point I would use the August puts.

Annotated Chart:

Picked on     July 17 at $ 26.80 *triggered    
Change since picked:      - 0.85
Earnings Date           08/06/09 (confirmed)
Average Daily Volume =       2.2 million  
Listed on  July 16, 2009         


Nike - NKE - close: 52.17 change: +1.03 stop: 53.51

A little bounce from the $50.50 level and NKE's 200-dma isn't surprising but the stock has been under performing for days. I expect that will continue. At this point we can wait for a failed rally move near $53.00 as our next entry point. Or as I suggested earlier more conservative traders may want to wait for a breakdown under $50.00 before initiating positions. Our first target is the $46.00-45.00 zone.

Suggested Options:
I am suggesting the August puts. Don't buy too many August $45 puts just because their cheap!

BUY PUT AUG 50.00 NKE-TJ open interest=6834 current ask .70
BUY PUT AUG 45.00 NKE-TI open interest=3169 current ask .10

Annotated Chart:

Picked on     July 23 at $ 51.14
Change since picked:      + 1.03
Earnings Date           09/23/09 (unconfirmed)
Average Daily Volume =       3.8 million  
Listed on  July 23, 2009         


United Technologies - UTX - close: 52.23 change: -1.15 stop: 55.05

UTX continues to under perform the market. Shares dropped 2.1% on Friday and clung desperately to the $52.00 level most of the session. I would wait for a failed rally in the $53-54 zone before launching new positions now. Our first target to take profits is at $50.15.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on     July 22 at $ 53.12
Change since picked:      - 0.89
Earnings Date           07/21/09 (confirmed)
Average Daily Volume =       5.9 million  
Listed on  July 22, 2009         


WestAmerica - WABC - close: 48.40 change: -0.15 stop: 50.05

It looks like WABC caught a little short covering rally on Thursday when the market broke to new highs. Yet the bounce in WABC is stalling at its trend of lower highs. This looks like a new entry point to buy puts. Our first target is $41.50. Our second target is $38.00. The Point & Figure chart is bearish with a $37.00 target. Readers may want to trade October puts because WABC doesn't move that fast.

Suggested Options:
We want to use the August or October puts. Septembers don't have any open interest. I prefer Octobers.

Annotated Chart:

Picked on     July 18 at $ 47.61 /gap higher entry
                               /originally listed at $47.07
Change since picked:      + 0.79 
Earnings Date           07/14/09 (confirmed)
Average Daily Volume =       331 thousand 
Listed on  July 18, 2009         


Strangle & Spread Play Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

McDonald's - MCD - close: 56.08 change: -0.01 stop: n/a

MCD closed virtually unchanged on Friday as investors bought the dip near its 100-dma for the second time in a row. Earnings came out last week so we are no longer suggesting new strangle positions.

I suggested the August $60 calls (MCD-HL) and the August $55 puts (MCD-TK). Our estimated cost is $1.25 (0.70 + 0.55). We want to sell if either option hits $2.75 or higher. This may take a few weeks to succeed.

Suggested Options:
No new plays at this time.

Annotated Chart:

Picked on     July 18 at $ 57.84
Change since picked:      - 1.76
Earnings Date           07/23/09 (unconfirmed)
Average Daily Volume =       7.8 million  
Listed on  July 18, 2009         


CLOSED BULLISH PLAYS

Lorillard - LO - close: 71.90 change: -0.21 stop: 69.95

LO fought back from its intraday lows and almost closed unchanged on the session. It was our plan to exit on Friday at the closing bell to avoid holding positions over the Monday morning earnings report. Wall Street expects a profit of $1.43 a share. I would keep LO on your watch list. If shares dip and bounce from the $70.00 level again it would be a new bullish entry point.

Chart:

Picked on     July 22 at $ 70.50 *triggered  
Change since picked:      + 1.40 <-- early exit @ 71.90 (+1.9%)
Earnings Date           07/27/09 (confirmed)
Average Daily Volume =       1.5 million  
Listed on  July 18, 2009         


CLOSED BEARISH PLAYS

Caterpillar - CAT - close: 42.00 change: +0.74 stop: 41.65

During the first hour on Friday it looked like CAT was going to retreat but when the market didn't break on the AMZN/MSFT earnings disappointments stocks continued to climb and CAT hit new relative highs. Shares hit our new stop at $41.65. This stock is showing a lot of strength for a company that said they could lose money in the third quarter this year.

Chart:

Picked on     July 22 at $ 38.66
Change since picked:      + 2.99<-- stopped @ 41.65 (+7.7%)
Earnings Date           07/21/09 (confirmed)
Average Daily Volume =        15 million  
Listed on  July 22, 2009         


S&P 500 SPDRS - SPY - close: 98.06 change: +0.40 stop: 98.55

The bears are getting steamrolled as money managers desperately chase performance. Investors bought the dip Friday morning and the S&P 500 rallied to close over the $98.00 level. Thursday night stocks were sinking sharply on the AMZN and MSFT earnings reports. If this can't spark a correction I don't know what will. We may have to wait for a rally toward resistance near 1,000 or the August non-farm payrolls report. I am going to admit defeat here and suggest an early exit. Odds are growing every day for a market pull back but traders can go broke even when the odds are in your favor.

Annotated Chart:

** 2nd attempt, new entry @ 97.66 **
Entry  on     July 23 at $ 97.20 /gap down entry
                              /originally listed at $97.66
Change since picked:      + 0.86 <-- exit early! (+ <1%)
Earnings Date           00/00/00
Average Daily Volume =       197 million  
Listed on  July 21, 2009