Editor's Note:

Very disappointing economic data and another downgrade for Greece sent the stock market plunging. JOSB and UTX have been stopped out. Our BA call play has been triggered. I have removed AAPL as a candidate.

-James

Current Portfolio:


CALL Play Updates

Alliance Data Systems - ADS - close: 92.79 change: +1.14

Stop Loss: 87.99
Target(s): 96.50, 99.75
Current Option Gain/Loss: -29.6% & -16.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01 update: ADS spent the morning consolidating sideways before eventually caving into the market's widespread declines. Readers can look for a bounce from $92 as a potential entry point or wait for a dip closer to the $90.00 level as a bullish entry point.

Earlier Comments:
This is an aggressive trade. We want to keep our position size small to limit our risk. FYI: The most recent data listed short interest at more than 26% of the float. This elevated short interest significantly raises the risk of a short squeeze.

- Suggested (SMALL) Positions -

Long June $95 call (ADS1118F95) Entry @ $1.20

- or -

Long July $95 call (ADS1116G95) Entry @ $2.45

Entry on May 27th at $92.23
Earnings Date 07/18/11 (unconfirmed)
Average Daily Volume = 999 thousand
Listed on May 26th, 2011


Avalonbay Communities - AVB - close: 129.72 change: -3.35

Stop Loss: 127.75
Target(s): 134.90, 139.50
Current Option Gain/Loss: - 20.0% & -20.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/01 update: AVB's big breakout higher yesterday and the sudden reversal today makes this move look like a bull-trap pattern. I am not suggesting new positions at this time. Given the close under the $130.00 level, which should have been support, more conservative traders may want to exit early immediately.

- Suggested Positions -

Long June $135 call (AVB1118F135) Entry @ $0.50

- or -

Long July $135 call (AVB1116G135) Entry @ $1.50

Entry on May 31st at $130.55
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume = 571 thousand
Listed on May 28th, 2011


Boeing Co - BA - close: 75.35 change: -2.68

Stop Loss: 74.85
Target(s): 79.95, 84.50
Current Option Gain/Loss: -60.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/01 update: We were expecting a dip in BA but today's -3.4% sell-off was too much. The stock hit our trigger to buy calls at $76.50 and kept right on going. The close under its 50-dma is bearish but BA still has potential support at the $75.00 level. Although if the stock market continues to sink tomorrow I would expect BA to break down under $75 and hit our stop loss at $74.85. I am not suggesting new positions at this time. We need to step back and wait for the dust to settle after today's market-wide decline.

- Suggested Positions -

Long June $80 call (BA1118F80) Entry @ $0.35

06/01 Triggered @ 76.50
05/31 New trigger @ 76.50, New stop @ 74.85

chart:

Entry on June 1st at $76.50
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on May 17th, 2011


Baker Hughes Inc. - BHI - close: 71.97 change: -1.96

Stop Loss: 68.40
Target(s): 79.00
Current Option Gain/Loss: -48.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01 update: I cautioned readers yesterday to look for a pull back in BHI. Shares fell to $72 and their 50-dma. This should be short-term support but if the market continues to sink then we should expect BHI to fall toward $70 and its 100-dma. I would wait on starting new bullish positions. We want to keep our position size small to limit our risk. Oil and oil stocks can be a volatile bunch.

-Small Positions - Suggested Positions -

Long June $75 call (BHI1118F75) Entry @ $1.61

Entry on May 26th at $73.34
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on May 25th, 2011


Deere & Co - DE - close: 82.76 change: -3.32

Stop Loss: 82.20
Target(s): 89.75
Current Option Gain/Loss: -55.5% & -54.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01 update: It was an ugly day for DE. The S&P 500 lost -2.27% but DE fell -3.85%. Shares also closed under technical support at its simple and exponential 200-dma. Readers may want to exit immediately! We currently have a stop loss at $82.20, which is just under the May lows. If the stock market continues to sink tomorrow there is a very good chance that we will get stopped out. I am not suggesting new positions at this time.

Earlier Comments:
Remember, this is a higher-risk, aggressive trade as we look for an oversold bounce from technical support at the 200-dma. Our exit target is $89.75. More nimble traders could aim for the 100-dma or 50-dma overhead. I would keep our position size small to limit our risk.

-Small Positions Only-

Long June $90 call (DE1118F90) Entry @ $0.45

- or -

Long June $87.50 call (DE1118F87.5) Entry @ $1.01

Entry on May 26th at $84.61
Earnings Date 08/17/11 (unconfirmed)
Average Daily Volume = 5.3 million
Listed on May 25th, 2011


Express Scripts - ESRX - close: 59.05 change: -0.51

Stop Loss: 56.75
Target(s): 64.00, 68.50
Current Option Gain/Loss: -62.0% & -30.1%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/01 update: With the stock market down more than 2% today you could call ESRX's -0.8% drop a show of relative strength. I remain cautious here and we're not suggesting new positions at this time. More conservative traders may want to raise their stop loss near the $58.00 level.

- Suggested Positions -

Long the June $60 call (ESRX1118F60) Entry @ $1.53

- or -

Long the August $60 call (ESRX1120H60) Entry @ 3.15

Entry on May 10th at $59.21
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on May 9th, 2011


Fossil Inc. - FOSL - close: 102.06 change: -3.78

Stop Loss: 99.39
Target(s): 109.75, 114.00
Current Option Gain/Loss: -74.6% & -46.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/01 update: The market's widespread sell-off hit FOSL for a -3.5% decline. Shares paused at their 20-dma. I would expect a dip toward the $100 level now. Readers can use a dip or a bounce near $100 as a new entry point. We do want to keep our position size small to limit our risk.

- Suggested (SMALL) Positions -

Long June $110 call (FOSL1118F110) Entry @ $1.38

- or -

Long July $110 call (FOSL1116G110) Entry @ $3.00

Entry on May 27th at $104.96
Earnings Date 08/09/11 (unconfirmed)
Average Daily Volume = 842 thousand
Listed on May 26th, 2011


Forest Labs Inc. - FRX - close: 35.50 change: -0.52

Stop Loss: 33.75
Target(s): 39.00, 42.50
Current Option Gain/Loss: -69.2% & -28.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/01 update: I have been warning readers to expect a pull back in FRX. If you're looking for a new entry point you have to decide if you want to buy a dip near $35 or wait for a dip closer to $34.00. If you do launch new positions I'd buy the July or August calls.

Our target is the $39.00 level and the $42.50 mark but I'm starting to worry that FRX just doesn't move fast enough.

- Suggested Positions -

Long the June $37 call (FRX1118F37) Entry @ $0.65

- or -

Long the August $37 call (FRX1120H37) Entry @ $1.40

05/28 New stop loss @ 33.75

Entry on May 20th at $35.29
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 3.2 million
Listed on May 19th, 2011


Goldman Sachs - GS - close: 136.17 change: -4.56

Stop Loss: 128.45
Target(s): 134.00, 137.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
06/01 update: Financial stocks were hit hard by profit taking today. The banking indices were off -4%. Shares of GS fell -3.2%. The stock looks like it will test support near $135 and its lows near $133.65 soon.

There is no change from my earlier comments.

Earlier Comments:
The 2010 lows are near $130. I am suggesting we launch very small bullish positions on a dip at $130.25. This is a very aggressive, higher-risk trade.

Trigger @ 130.25 (very small positions)

- Suggested Positions -

buy the June $135 call (GS1118F135)

Entry on May xxth at $ xx.xx
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume = 6.5 million
Listed on May 21st, 2011


Praxair Inc. - PX - close: 103.39 change: -2.45

Stop Loss: 102.95
Target(s): 109.75, 112.25
Current Option Gain/Loss: -58.8% & -53.3%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/01 update: Our trade in PX isn't going to last very long. Shares opened at $105.46 and then plunged to their 50-dma. The stock hit a low of $103.11. If the market continues to sink tomorrow we will likely get stopped out at $102.95. Our biggest risk is another sharp decline in the stock market could push PX to gap open lower. I am not suggesting new positions at this time.

- Suggested Positions -

Long June $105 call (PX1118F105) Entry @ $1.70

- or -

Long July $110 call (PX1116G110) Entry @ $0.75

Entry on June 1st at $105.46
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on May 31st, 2011


Sherwin-Williams Co. - SHW - close: 86.06 change: -1.78

Stop Loss: 84.90
Target(s): 92.25. 97.50
Current Option Gain/Loss: -33.3% & -40.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/01 update: Prior resistance in the $86.50-87.00 area should have been support but the market's sell-off was so sharp today SHW closed near $86. I would wait on starting new positions. Let's wait and see if SHW can bounce from $86 or even the $85 level then we'll reconsider launching new call positions.

- Suggested Positions -

Long June $90 call (SHW1118F90) Entry @ $0.30

- or -

Long July $90 call (SHW1116G90) Entry @ $1.25

Entry on June 1st at $87.73
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 911 thousand
Listed on May 31st, 2011


Union Pacific - UNP - close: 100.86 change: -4.11

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -70.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/01 update: Ouch! Railroad stocks were underperformers on Wednesday. UNP opened at $104.93 and then plunged past its 30-dma to close under $101. The $100 level and its 50-dma should be support but I would wait for a bounce before considering new positions. If we do see anther entry point I'd buy July or August calls.

- Suggested Positions -

Long the June $105 call (UNP1118F105) Entry @ $1.62

Entry on May 9th at $102.19
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on May 7th, 2011


Wynn Resorts Ltd. - WYNN - close: 145.86 change: -0.66

Stop Loss: 146.40
Target(s): 159.75, 169.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Comments:
06/01 update: I was surprised that WYNN didn't see stronger declines. Shares rallied toward $150 intraday only to reverse and close down -0.45%, which is a lot better than the NASDAQ's -2.3%. If the market continues to sink then I would expect WYNN to drop toward support near $140 and its 50-dma. Currently our plan is to buy calls at $152.00.

Trigger @ $152.00

- Suggested Positions -

Buy the June $160 calls (WYNN1118F160)

- or -

Buy the July $160 calls (WYNN1116G160)

Entry on May xxth at $ xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on May 11th, 2011


PUT Play Updates

DaVita Inc. - DVA - close: 83.90 change: -0.15

Stop Loss: 85.35
Target(s): 80.50, 77.00
Current Option Gain/Loss: -31.2% & -75.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01 update: What is going on with DVA? Today was the perfect day for shares to drop. Yet DVA spent the session churning sideways. I couldn't find any news behind DVA's lack of weakness. The stock continues to look poised for more weakness but I would not open new positions at this time. If we DVA doesn't see some follow through lower soon we'll drop it.

Our first target is $80.50 (near the 100-dma). The $80 area will probably be short-term support so we can expect a bounce there. Our secondary target is $77.00.

We want to keep our position size small to limit our risk. The wide spreads on the June $80 puts definitely put us at a disadvantage.

(small positions) - Suggested Positions -

Long Jun $85 PUT (DVA1118R85) Entry @ $2.40

- or -

Long Jun $80 PUT (DVA1118R80) Entry @ $0.60

Entry on May 25th at $83.30
Earnings Date 08/02/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on May 24th, 2011


Stericycle Inc. - SRCL - close: 87.32 change: -1.77

Stop Loss: 91.55
Target(s): 84.00, 80.50
Current Option Gain/Loss: +40.0% & +13.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01 update: Today's stock market decline was enough to short circuit SRCL's bounce attempt. Yet shares only lost -1.9% compared to -2.3% decline for the major indices. I remain cautious here. The 100-dma could be technical support.

Earlier Comments:
FYI: The Point & Figure chart for SRCL is bearish with a $82 target.

- Suggested Positions -

Long June $85 PUT (SRCL1118R85) Entry @ $0.50

- or -

Long July $85 PUT (SRCL1116S85) Entry @ $1.50

Entry on May 31st at $88.78
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 502 thousand
Listed on May 28th, 2011


CLOSED BULLISH PLAYS

Apple Inc. - AAPL - close: 347.83 change: +10.42

Stop Loss: ---.--
Target(s): ---.--, ---.--
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see trigger

Comments:
06/01 update: Another analyst upgrade for shares of AAPL helped push the stock to a new three-week high this morning. The rally lost power and shares eventually turned negative thanks to the widespread market sell-off. The sharp down turn in the market today throws another monkey wrench in our AAPL plans. The stock was in the process of breaking out higher but now it has produced a failed rally pattern. I wouldn't want to short it since AAPL fared better than most stocks today (only -0.6%) but I wouldn't buy it either.

I am removing AAPL from the play list. The stock never hit any of our active triggers. I would keep it on your watch list.

Trade Never Opened

chart:

Entry on May xxth at $ xx.xx
Earnings Date 07/20/11 (unconfirmed)
Average Daily Volume = 16.6 million
Listed on May 2nd, 2011


Jos. A Bank Clothiers - JOSB - close: 49.51 change: -7.59

Stop Loss: 53.75
Target(s): 59.50
Current Option Gain/Loss: -94.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/01 update: JOSB was hammered for a -13.2% loss on Wednesday. The company reported earnings this morning that missed estimates by two cents and missed the revenue number. Investors were very unhappy with the drop in same-store sales from +10.4% a year ago to +0.1% this past quarter. The stock gapped open lower at $50.02. With our stop loss at $ 53.75, the play was closed immediately. Our option went from a bid of $2.65 to $0.10 at the open.

- Suggested Positions -

June $55 calls (JOSB1118F55) entry @ $1.75, Exit 0.10 (-94.2%)

06/01 Gap down exit @ 50.02, June option @ 0.10 (-94.2%)
05/28 new stop loss @ 53.75
05/18 new stop loss @ 52.90
05/14 Exit the May calls. May $55 call @ 0.90 (+28.5%)
05/12 New stop loss at $51.75

chart:

Entry on April 26th at $52.75
Earnings Date 06/01/11 (confirmed)
Average Daily Volume = 510 thousand
Listed on April 25th, 2011


United Technologies Corp. - UTX - close: 84.30 change: -3.47

Stop Loss: 84.75
Target(s): 89.50, 94.75
Current Option Gain/Loss: -80.0%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/01 update: A -280 point drop in the Dow Industrials was too much for UTX to bear. The stock broke down under its 50-dma and under the $85.00 level to hit our stop loss at $84.75.

- Suggested Positions -

June $90 calls (UTX1118F90) Entry @ 0.40, Exit $0.08 (-80%)

06/01 stopped out @ 84.75, Option @ 0.08 (-80%)
05/31 New stop loss @ 84.75
05/26 New stop loss @ 83.80

chart:

Entry on May 23rd at $86.41
Earnings Date 04/20/11
Average Daily Volume = 3.7 million
Listed on April 27th, 2011