Editor's Note:

Friday was another rough day for the bulls following a very bearish jobs report. Stocks marked their fifth weekly loss in a row. We had four bullish candidates get stopped out.

-James

Current Portfolio:


CALL Play Updates

Alliance Data Systems - ADS - close: 89.86 change: -1.60

Stop Loss: 88.65
Target(s): 96.50, 99.75
Current Option Gain/Loss: -83.3% & -59.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/04 update: This is it. ADS has come to its do or die moment with a three-day pull back to support near $90 and its 40 and 50-dma. Technically this dip to support within the up trend should be considered a bullish entry point. However, if the market sees any follow through lower on Monday there is a good chance ADS will hit our stop loss. Of course if you're the optimistic type then the S&P 500 is testing significant support near 1300 and if there was a spot for the market to bounce this is it.

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

06/02 New stop loss @ 88.65

chart:

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


Baker Hughes Inc. - BHI - close: 74.58 change: +0.98

Stop Loss: 69.90
Target(s): 79.00
Current Option Gain/Loss: + 7.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/04 update: BHI was one of the market's better performers on Friday. The company issued positive comments about its outlook for the second half of 2011. The stock saw a morning dip toward short-term support near $72 and then bounced to a new four-week high before paring its gains. If you're looking for a bullish candidate BHI is probably one of the stronger contenders and we could launch positions on this bounce but you might want to raise your stop loss toward the $71.75 area. I am raising the newsletter's stop loss to $69.90.

Earlier Comments:
We wanted to keep our position size small to limit our risk.

-Small Positions - Suggested Positions -

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

06/04 new stop loss @ 69.90

chart:

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


Fossil Inc. - FOSL - close: 100.50 change: -1.76

Stop Loss: 99.39
Target(s): 109.75, 114.00
Current Option Gain/Loss: -89.1% & -60.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/04 update: FOSL did indeed bounce from support near $100 but the bounce didn't last very long. The market's negative reaction to the jobs number sent FOSL to an intraday low of $99.50 before shares bounced. FOSL was rolling over late on Friday. The stock is testing key psychological support at the $100.00 area and we have a stop loss at $99.39. Shares should also have technical support at the 40 and 50-dma but we would get stopped out if FOSL dipped that low.

Technically a bounce from $100 could be used as a bullish entry point but given the market's downtrend you may want to pause on launching new positions. If FOSL does continue to sink the stock should find additional support near $95 and $90.

Earlier Comments:
We wanted 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

chart:

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: 36.90 change: +1.33

Stop Loss: 34.45
Target(s): 39.00, 42.50
Current Option Gain/Loss: + 0.0% & +21.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/04 update: FRX was one of the market's better performers on Friday with a +3.7% rally. The stock got a boost from an upgrade by J.P.Morgan and from news it was accelerating its stock buyback program with a $500 million purchase through Morgan Stanley. FRX ended the week at new two-year highs. We are raising our stop loss to $34.45. I am not suggesting new positions at this time but if you're looking for a new bullish trade then consider buying a dip in FRX.

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

06/04 new stop loss @ 34.45
05/28 New stop loss @ 33.75

chart:

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: 135.33 change: +0.95

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:
06/04 update: GS bucked the trend in financials on Friday and posted a gain. Nothing has changed for us. This remains a very aggressive trade and we're waiting for GS to hit our entry point.

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)

chart:

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


Union Pacific - UNP - close: 101.14 change: -1.08

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -70.9%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/04 update: Transport stocks were under performers on Friday with the Dow transportation index down -1.7%. UNP gapped open lower and dipped to support near $100 and its 50-dma before bouncing. Technically a bounce from support near $100 would be a bullish entry point but given the bearish trend in the major averages you may want to pause on starting new positions.

- Suggested Positions -

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

chart:

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


PUT Play Updates

Stericycle Inc. - SRCL - close: 85.69 change: -1.92

Stop Loss: 90.05
Target(s): 84.00, 80.50
Current Option Gain/Loss: +80.0% & +30.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/04 update: SRCL is cooperating with us. Shares broke down under support at their 100-dma on Friday. The stock closed at new two-month lows. There is a chance that SRCL might bounce at the $85.00 level but the path of least resistance seems to be lower. I am not suggesting new positions at this time. We'll wait for a new lower high or failed rally type of move. Please note our new stop loss at $90.05.

- Suggested Positions -

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

- or -

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

06/04 new stop loss @ 90.05

chart:

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


Whole Foods Market - WFM - close: 57.15 change: -1.54

Stop Loss: 61.55
Target(s): 55.10, 52.00
Current Option Gain/Loss: +40.9% & +35.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/04 update: The dismal jobs report on Friday did not inspire a lot of confidence for consumer-related names. WFM gapped open lower under $58 and closed down -2.6%. Please note that I am lowering our stop loss to $60.65. Don't be surprised if WFM manages a bounce near $56.50 and its late February and early March lows. Prior support near $58 and its 100-dma should be new resistance. Our targets are $55.10 and $52.00.

- Suggested Positions -

Long June $60 PUT (WFM1118R60) Entry @ $2.20

- or -

Long July $55 PUT (WFM1116S55) Entry @ $1.05

06/04 new stop loss @ 60.65

chart:

Entry on June 2 at $58.70
Earnings Date 08/11/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on June 1st, 2011


CLOSED BULLISH PLAYS

Avalonbay Communities - AVB - close: 131.24 change: +2.48

Stop Loss: 127.75
Target(s): 134.90, 139.50
Current Option Gain/Loss: - 70.0% & -50.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/04 update: Choose your favorite cuss word and insert it here...( )! Thursday night AVB issued a press release and raised their Q2 and 2011 earnings guidance. Yet shares still gapped open lower and sank to $127.51 before bouncing big (+1.9% on the day). The stock is now back above resistance at the $130 level. Our stop loss was hit at $127.75.

Our call play has been closed but if you were looking for a bullish candidate I'd keep your eye on AVB.

Unfortunately, AVB's options didn't trade much on Friday. The exit price listed below is an estimate.

- Suggested Positions -

June $135 call (AVB1118F135) Entry @ $0.50, exit $0.15 (-70%)

- or -

July $135 call (AVB1116G135) Entry @ $1.50, exit $0.75 (-50%)

06/03 Stopped out @ 127.75, Options @ -70% & -50%

chart:

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: 74.84 change: -0.85

Stop Loss: 74.85
Target(s): 79.95, 84.50
Current Option Gain/Loss: -68.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/04 update: BA did not perform very well on Friday. Shares gapped open lower under support at the $75.00 level. The stock opened at $74.71. Our stop loss was $74.85 so the play was closed immediately. Shares spent the rest of the day trying and failing to rally back above the $75.00 level.

- Suggested Positions -

June $80 call (BA1118F80) Entry @ $0.35, exit $0.11 (-68.5%)

06/03 Gap open lower, Stopped out @ 74.71, option @ -68.5%
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


Deere & Co - DE - close: 82.20 change: -2.03

Stop Loss: 82.20
Target(s): 89.75
Current Option Gain/Loss: -73.3% & -70.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/04 update: Friday proved to be another ugly day for the market thanks to the jobs report. DE gapped open lower under its 200-dma and quickly hit our stop loss at $82.20. Our aggressive trade on DE has been closed.

-Small Positions Only-

June $90 call (DE1118F90) Entry @ $0.45, exit $0.12 (-73.3%)

- or -

June $87.50 call (DE1118F87.5) Entry @ $1.01, exit $0.30 (-70.2%)

06/03 stopped out @ 82.20, Options @ -73.3% & -70.2%

chart:

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: 56.73 change: -1.31

Stop Loss: 56.95
Target(s): 64.00, 68.50
Current Option Gain/Loss: -93.4% & -58.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/04 update: We have been growing concerned about the action in ESRX, which is why we raised the stop loss to $56.95 on Thursday. Unfortunately for the bulls the sell-off in ESRX has accelerated. Shares gapped open lower on Friday at $57.54 and quickly fell through its 50-dma. Our stop loss was hit Friday afternoon.

- Suggested Positions -

June $60 call (ESRX1118F60) Entry @ $1.53, exit $0.10 (-93.4%)

- or -

August $60 call (ESRX1120H60) Entry @ 3.15, exit $ 1.30 (-58.7%)

06/03 stopped out @ 56.95, options @ -93.4% & -58.7%
06/02 new stop loss @ 56.95

chart:

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


Wynn Resorts Ltd. - WYNN - close: 143.41 change: -2.85

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:
06/04 update: I am removing WYNN as a bullish candidate. Shares seem stuck in the $140-150 zone. Nimble traders could try buying calls near support and selling near resistance but it's a volatile stock. WYNN looks headed for $140 again. Shares never hit our buy-the-breakout trigger at $152.00. The longer-term trend for WYNN is still up so I would keep it on your watch list.

Our Trigger to launch positions was never hit!

chart:

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