Current Portfolio:


PUT Play Updates

Deere & Co. - DE - close 58.01 change +0.75 stop 60.05

Target(s): 56.30, 55.20, 53.25, 51.75
Key Support/Resistance Areas: 60.00, 57.50, 56.50, 56.00, 54.00, 52.70, 51.50
Current Gain/Loss: -40%
Time Frame: 1 to 2 weeks
New Positions: Yes, with a tight stop

Comments:
7/10: DE is not acting as I suspected and the position is moving against us. The stock has rallied to close its gap down on 6/29 which is also just underneath its broken upward trend line that began in July 2009. DE also closed right at its 20-day and 50-day SMA's from below. This the area where I thought any bounce in DE would stop and I think new bearish positions could be opened here with tight stops. The volume on this bounce has been significantly lighter than the pullback which is a bearish signal because it indicates that the stock is being more heavily distributed rather than accumulated. However, if the bounce doesn't stop here readers should consider getting out of the way and closing positions. A tighter stop could placed at $59.30 which is above the 100-day SMA and Friday's high. Officially, I am sticking with the original stop but have tightened the targets. These are near support/resistance and are places where I would suggest tightening stops.

7/7: DE had a huge day and closed +3.61% higher. The stock closed right at a key support/resistance level at $56.50 and is entering a congestion zone, downtrend line, the backside of a broken upward trend line, and all of its SMA's from below. The stock could bounce a little further but I would be very surprised to see DE above $58.00. I suggest we use some patience and see how the this relief rally plays out in the coming days.

7/6: DE traded up to $56.06 this morning which triggered our entry to buy August $45.00 PUTS. The stock sold off the remainder the day and has peeked its head below the 200-day SMA for three consecutive sessions but has yet to close below it. If it does we should hit our first target of $53.25 relatively quick. If DE breaks down prior to bouncing I suggest readers be quick to take profits at the first target or tighten stops to protect against a hard reversal.

Current Position: August $55.00 PUTS, entry was at $3.00

Annotated Chart:

Entry on July 6, 2010
Earnings 8/18/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on July 3, 2010


Ingersoll-Rand - IR - close 34.04 change -0.21 stop 36.60

Target(s): 33.25, 32.05, 31.25
Key Support/Resistance Areas: 37.00, 36.50, 35.70, 34.50, 33.11, 31.50, 30.12
Current Gain/Loss: +0.00%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
7/10: I am comfortable with the fill we got in IR on Thursday. The stock is forming a bear flag and I expect it break down when the oversold bounce in the market loses momentum. I've adjusted our targets and added one just below for readers looking for a quick exit. If the first target is hit the gain should be 10% to 15%. This is good place to at least tighten stops to see if we get more out of the position.

7/7: IR has broken down hard since its YTD high of $40.65 on 6/21. Today the stock gained +1.73% compared to the broader indexes that all gained approximately +3%. This is underperformance. IR appears to be forming a bear flag on the daily chart and I suggest readers take advantage of a break down below its recent lows near $33.00, or on any strength the stock exhibits in the coming days. The stock has broken below its 200-day SMA (currently $35.29) and if it bounces I anticipate it struggling at this level. There is a ton of overhead resistance to deal with (see rectangle). I've chosen a trigger of $34.30 and $32.96 to initiate short positions, whichever occurs first. $34.30 is just below Tuesday's highs which IR couldn't get to today. We'll use a wide stop of $36.60 until we are in the position and then adjust it. If we get filled at the higher price it presents a good risk reward set-up, i.e. risking $1.85 to make $2.70 at our first target of $31.60, and $3.70 at our second target of $30.60. If IR breaks lower I believe the selling will gain steam quickly.

Current Position: August $35.00 PUTS, entry was at $2.25

Annotated Chart:

Entry on July 8, 2010
Earnings 7/19/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on July 7, 2010


Lululemon Athletica Inc. - LULU - close 38.89 change +0.17 stop 41.30 *NEW*

Target(s): 35.80, 34.55, 33.50
Key Support/Resistance Areas: 42.25, 39.75, 37.00, 35.16, 32.75
Time Frame: 1 week

Comments:
7/10: LULU is getting ever so close to our entry. The stock traded to within 8 cents on Friday and backed off. The bounce over the past few days has been on extremely light volume showing a lack of participation. This is one of the most bloated retail stocks out there trading at a P/E of 38. It is a novelty retailer and sometimes the P/E doesn't matter so I will keep a tight leash on this and use a stop of $41.30 which is just above the 20-day and 50-day SMA's. LULU has not tested them from below since breaking through them in June. I like the short set-up and want to lower the entry trigger to $39.15. I have also adjusted the targets. I'm looking for LULU to make quick trip back down to test its lows and possibly break them.

7/7: LULU rallied +4.24% higher today and is getting closer to our short entry trigger at $39.25. If the stock trades to this level I feel comfortable suggesting a short position as it will be the first time the stock approaches its 50-day SMA since breaking it on 6/25. The 20-day SMA is also overhead, along with a downtrend line which will provide even more resistance. I think patience will pay off for us on this trade.

7/6: LULU came within 15 cents of hitting our trigger to enter short positions today, and then reversed down. The stock has faced a barrage of selling recently and is coming into a prior support/resistance area near our first target of $35.25. If the stock keeps testing this area the support should eventually break. I only wish LULU and the market were not so oversold. I am expecting this stock to bounce, maybe even up to its 50-day SMA which is near $40.00. Considering the conditions I would like to raise our entry back to $39.25 (below the 50-day SMA). If we are patient and get a good short entry it should pay off.

Suggested Position: Buy August $35.00 PUTS if LULU trades to $39.25, current ask $2.05, estimated ask at entry 1.55

Annotated Chart:

Entry on July xx
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 700,000
Listed on July 1, 2010


Polo Ralph Lauren - RL - close 77.16 change -0.06 stop 82.50

Target(s): 75.25, 73.50, 72.10
Key Support/Resistance Areas: 82.00, 80.00, 78.00, 75.00
Current Gain/Loss: -1.6%
Time Frame: 1 week
New Positions: Yes

Comments:
7/10: We initiated AUG $75 PUTS at the open for $3.00. The opening print was all RL could muster for the day as the stock drifted lower throughout the day. There is a lot of resistance to keep RL in check. I am looking to book a quick on this position and expect the stock to hit our first target of $75.25 relatively quick. This should give us a +20% gain on the position and is good place to tighten stops to protect profits. My primary target is $73.50 but that may take a bit longer depending on earnings, news, and how the market is reacting to it.

7/8: RL has rallied +8% off of its lows on Friday and is now approaching its 20-day SMA, two downtrend lines, and a price congestion area dating back to October 2009, all from below. The facts are that the consumer is not in good shape, jobs are hard to come to come by, and the housing market remains in the tank. This doesn't bode well for retailers and I believe we will see RL retest its lows before it breaks the downtrend lines. I've chosen $77.40 as the entry trigger which is just above today's closing price. I would like to buy August $75.00 PUTS for no more than $3.00 which is what they should be worth at $77.40. Our stop will be $82.50 which is below the 20-day and 200-day SMA's and will be below the 50-day SMA in a matter of couple of days.

Current Position: August $75.00 PUTS, entry was at $3.00

Annotated chart:

Entry on July 9, 2010
Earnings 8/5/2010 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on July 8, 2010


PowerShares QQQQ Trust - QQQQ - close 44.62 change +0.42 stop 46.90

Target(s): 43.60, 42.55, 41.80, 41.05
Key Support/Resistance Areas: 46.77, 45.25, 44.46, 43.50, 42.50, 41.00
Current gain/loss: -11%
Time Frame: 1 to 2 weeks
New Positions: Yes

Comments:
7/10: QQQQ is bouncing but I expect the selling to resume soon. In light of the choppy trading that I foresee I am going offer a near term target of $43.60 which is $1 lower than current levels. For readers in PUT positions they should be worth about $2.15 (entry was at $1.85) which would be a +16% gain. This target is near the June 8 low and may form an inverse head and shoulders pattern. I suggest being quick to tighten stops at this level to protect profits. QQQQ may bounce up to its 20-day or 50-day SMA just overhead before reversing so I suggest being patient. There was a lot of volume in the August PUT strikes on Friday and large blocks bought on the offer. This is a good sign for a move lower but earnings is the wild card.

7/7: QQQQ had a monster truck rally today but I believe this will be short lived. The ETF is nearing an important resistance level at $44.46 and has all of its SMA's and plenty of congestion overhead to act as resistance. The rectangle on the chart represents a gap that I suppose could get filled so conservative traders may consider waiting to enter at $45.00. I'm just not confidant the gap will get filled. Today was a relief rally and we may get a little more but I think the selling will resume again and QQQQ should easily retest its lows and possibly break them. Let's use a trigger of $44.30 to initiate short positions. Our stop is $46.90 and I do not see QQQQ trading up to this level prior to breaking down again.

Current Position: August $45.00 PUTS, entry was at $1.85

Annotated chart:

Entry on July xx
Earnings N/A (unconfirmed)
Average Daily Volume: 100 million
Listed on July 7, 2010


Starbucks Corp. - SBUX - close 25.30 change +0.48 stop 26.75 *NEW*

Target(s): 24.25, 23.70, 22.55, 21.30
Key Support/Resistance Areas: 26.50, 26.00, 25.25, 24.80, 24.00, 23.60, 22.50
Current Gain/Loss: -21%
Time Frame: 1 to 2 weeks
New Positions: Yes, with a tight stop

Comments:
7/10: SBUX has retraced some of its recent decline as the market has bounced. The stock is testing its 100-day SMA from below and the backside of its broken upward trend line for the first time since breaking in late June. The 100-day SMA has been an important reference point for the stock in 2010. We are also near an important support/resistance level of $25.25 so this is a logical place for SBUX to reverse back down. However, the broader market direction will most determine our fate on this position. A tighter stop could be placed at $25.80 but the bounce may go a little further so patience is suggested. I am looking for SBUX to make a lower high and reverse back down to at least retest its lows. I like new positions at these levels.

7/6: SBUX came with 6 cents of our trigger to enter short positions and then proceeded close down -3.04%. I'm expecting SBUX to bounce with the broader market so I suggest being patient and ready to short the stock if it trades to our trigger of $24.75.

7/3: Last week SBUX broke below a trend line that began in October 2009 and collapsed below it 20-day, 50-day, and 100-day SMA's. These SMA's (in particular the 100-day SMA) have been key areas where the stock has bounced during its rally over the past year. And now that the stock is below them it has probably seen its best days, at least for awhile. I would like to use a trigger of $24.75 to enter short positions which is below the stock's 100-day SMA, the underside of the broken trend line, and the recent steep downtrend line, all of which are converging (see oval on chart). The $25.00 area could also be considered an entry point but I chosen $24.75 because it is near Friday's highs which could possibly form a double top on the intraday charts. Our primary target is $22.55 but I have also listed $23.70 as area to consider tightening stops. It is above the 200-day SMA which SBUX has not touched in over a year.

Current Position: August $25.00 PUTS, entry was at $1.40

Annotated Chart:

Entry on July 8, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on July 3, 2010


CLOSED BULLISH PLAYS

Allergan, Inc. - AGN - close 65.49 change +0.91 stop 62.12 *NEW*

Target(s): 63.75 (hit), 64.45 (hit), 65.25 (hit)
Key Support/Resistance Areas: 65.50, 64.50, 63.80, 61.80, 59.50
Final Gain/Loss: +35.5%
Time Frame: 1 week
New Positions: Closed (7/8/10)

Comments:
7/10: AGN hit all of our targets on Thursday and we closed the position for a +35% gain. The stock is near 2 year highs and if it breaks out higher the next resistance is $67.50 to $70.00 which is near the highs from late 2006/early 2007. The highest closing price of the past 3 years was near $68.50. I don't expect much more out of the stock and would use tight stops to protect against a reversal. There has been takeover chatter about AGN but I have not read anything to confirm it. If the information is not true the stock could fall hard.

7/7: AGN calls were initiated at the open this morning and the stock came within 1 penny of hitting our first target this afternoon. I would be hesitant to open new positions and chase the stock up here. I suggest readers tighten stops to $62.12 and be quick to take profits as our targets approach as I am not confident how long this rally will last. We should have no problem hitting our first target of $63.75 tomorrow. Our next target is $64.75. These areas are logical places to further tighten stops to see if we can get more profit out of the positions. For readers who do not trade intraday I think a good strategy on this position would be to place a one cancels the other bracket order (OCO) with the stop order based on the price of AGN stock (i.e. our stop of $62.12) while the sell limit order based on the price on the $65.00 calls. The projected price of the calls at our second target of $64.45 is approximately $3.80. The bottom line is we have a gain and I do not suggest holding on to the position trying to squeeze out more gains. The broader market can go down just as fast it went up today.

7/6: AGN closed above a downtrend line that began on 4/1 on Friday and has now retraced some of those gains and tested the backside of it. The stock is also above a key support level at $61.80 and all of its major SMA's, which should provide additional support if there is a pullback. I'm expecting the stock to bounce with the overall market and possibly retest its YTD highs. However, I suggest being quick to tighten stops if AGN moves higher. If AGN hits our first target we should be able to make 30% to 40% on the call position. Option activity has also been picking up mainly in the July strike prices. Our stop will be $59.38 which is below the opening gap up on Friday and all of the SMA's.

Closed Position: August $65.00 CALLS at $4.20, entry was at $3.10

Annotated Chart:

Entry on July 7, 2010
Earnings Date 8/8/10 (unconfirmed)
Average Daily Volume: 2.58 million
Listed on 7/6/10