Editor's Note:

Good evening. Our positions moved in the right direction today, but now we need follow through to the upside. We are positioned for a continued bounce possibly into next week. And I plan to have more short candidates soon. I am also listing several targets and support/resistance levels in our trades to help readers better manage positions. My goal is to help readers protect profits at critical levels which is essential considering the current market volatility.

Current Portfolio:


CALL Play Updates

Diana Shipping, Inc - DSX - close 13.66 change +0.35 stop 12.90

Target(s): 14.00, 14.35, 14.75
Key Support/Resistance Areas: 15.00, 14.40, 14.15, 13.50, 13.25, 13.00
Current Gain/Loss: +3.2%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
DSX closed right on its 20-day SMA today and if it can break through I expect this trade to produce nice returns. Ultimately, $14.35 is our original target which is just below the stock's 50, 100, and 200-day SMA's. This is the area I will be looking to take profits. The stock also has resistance at $14.15 which is why I have also listed $14.00 as a lower target. I would expect some resistance here and is also a good place to tighten stops.

Current Position: July $12.50 CALL, entry $1.55

Entry on 5/28/10
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 1.4 million
Listed on 5/27/10


Qualcomm Inc - QCOM - close 36.02 change +.95 stop 33.45

Target(s): 36.45, 36.95, 38.00, 38.95
Key Support/Resistance Areas: 37.00, 36.25, 35.25, 34.50
Current Gain/Loss: +23%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
QCOM bounced back today after back testing the broken down trend line which began on April 21st. The targets above can be used as a guide to exit positions. These are prudent areas to tighten stops or simply take profits. The 20-day SMA is just overhead and near our first target of $36.45. But the broader market strength, or lack thereof, is going to determine how far QCOM runs from here. Ideally, I'm looking for our $38.00 target to be hit but tightening stops on the way up is the prudent thing to do.

Current Position: July $36.00 CALL, entry at $1.30

Entry on 6/1/2010
Earnings Date 7/21/2010 (unconfirmed)
Average Daily Volume: 26 million
Listed on 5/29/10


Rino International - RINO - close 12.61 change +0.69 stop 11.70

Target(s): 13.25, 13.65, 14.00, 14.50, 15.95, 16.90
Key Support/Resistance Areas: 15.00, 14.50, 13.75, 12.75, 11.75
Current Gain/Loss: -13%
Time Frame: Several weeks
New Positions: Yes, with a tight stop

Comments:
RINO seems to have found its footing and I expect the stock to follow through higher from here. There are several targets listed above readers can use as a guide to exit positions or tighten stops. I'm eyeing $13.65 as a potential stall point for RINO but if the broader market continues higher we could see a nice rally in RINO. $13.65 is a logical place to at least tighten stops or take some profits off of the table. Fundamentally, RINO trades at a low PE ratio of about 5 and I think there is a lot of room to for this stock to run.

Current Position: July $12.50 CALL, entry at $1.50

Entry on May 27, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 926,000
Listed on 5/25/10, 2010


Trina Solar - TSL - close 17.04 change +0.39 stop 16.45

Target(s): 17.45, 17.95, 18.40, 19.00, 19.95
Key Support/Resistance Areas: 16.55, 17.25, 18.50, 19.00, 20.00, 21.00
Current Gain/Loss: -10%
Time Frame: 1 to 2 weeks
New Positions: Yes, with a tight stop

Comments:
As mentioned in yesterday's updates we had to enforce our gap rule today as TSL opened very close to our stop. It got hairy during the first 15 minutes of trading but the stock rebounded nicely and never took out the first 15 minute bar. TSL closed +11% off of its lows and I am expecting follow through from here. I have several targets listed above for readers to use as a guide to exit positions. If the market can follow through the remainder of the week I am looking for TSL to touch its declining 20-day SMA which should be near our $18.40 target. But I also want to urge traders to tighten stops if TSL moves higher and our position turns positive. Protecting profits is a must in this volatile market.

Current Position: July $18.00 CALL, entry at $1.50

Entry on 6/1/2010
Earnings Date 7/21/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on 5/29/10


PUT Play Updates

NONE, EXCEPT FOR GYMB AND SII WHICH WERE CLOSED (see below).


CLOSED BEARISH PLAYS

The Gymboree Corporation - GYMB - close 44.47 change +0.54 stop 46.60

Target(s): 43.50 (hit), 42.90, 42.40, 40.25
Key Support/Resistance Areas: 46.30, 46.00, 44.00, 43.45, 42.75
Current Gain/Loss: +23.7%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
GYMB traded down to our new target of $43.50 so we are flat the position for +23.7% gain. The stock traded down to the penny of our key support area of $43.45 and then reversed higher with the broader market in the afternoon. It is uncanny how support and resistance levels work. I'm sure it wasn't just GYMB that found support and reversed higher. At the end of the day I expected more downside and profits in this trade but since it has not followed through it was time close the position for a small gain. Readers who may still have positions can use the above support/resistance areas a guide to exit positions. But I would probably bump up the second target to from $42.90 to $43.05 and I would use a tighter stop to protect capital.

Closed Position: July $45.00 PUT at $3.65, entry was at $2.95

Annotated Chart:

Entry on May 27, 2010
Earnings More than 2 months (unconfirmed)
Average Daily Volume: 1.1 million
Listed on May 22, 2010


Smith International, Inc - SII - close 37.70 change +3.25 stop 35.75

Target(s): 34.55 (hit), 33.60, 32.15
Key Support/Resistance Areas: 42.00, 40.90, 39.00, 37.00, 34.00
Current Gain/Loss: -1.5%
Time Frame: 1 to 2 weeks
New Positions: Closed

Comments:
No harm no foul is about all I can say about this trade. A lesson to be learned is to honor our targets and stops. After hitting our first target yesterday afternoon SII reversed hard this morning. We kept the trade open trying to squeeze more out of it, but it wasn't meant to be. It was very apparent in early trading this morning that honoring our stop and stepping aside was the right thing to do. So we are out of the trade for about breakeven. *NOTE: I view this trade as aggressive so please use proper position size to manage risk.

Closed Position: July $37.00 PUT at $3.35, entry at $3.30

Annotated Chart:

Entry on 6/1/2010
Earnings 7/28/10 (unconfirmed)
Average Daily Volume: 7.6 million
Listed on May 29, 2010