Editor's Note:

Stocks pushed their stream of losses to four days in a row. The S&P 500 has broken down under the 1300 level. The NASDAQ has fallen to potential support at the 2700 mark. Meanwhile our ADS call play has been stopped out.

-James

Current Portfolio:


CALL Play Updates

Baker Hughes Inc. - BHI - close: 72.23 change: -2.35

Stop Loss: 69.90
Target(s): 79.00
Current Option Gain/Loss: -52.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/06 update: Oil stocks were some of the worst performers on Monday. Oil services were hit especially hard. Shares of BHI reversed Friday's bounce and fell -3.1%. The stock closed near short-term support at $72.00. If this level breaks it will be a quick drop toward the next level of support near $70.00. More aggressive traders may want to move their stop loss so it's under the 100-dma (currently $69.63) or under the $68.00 level. I am not suggesting new positions at this time. A breakdown under $68.00 would look like BHI had produced a bearish H&S pattern.

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

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: 100.07 change: -0.43

Stop Loss: 99.39
Target(s): 109.75, 114.00
Current Option Gain/Loss: -92.7% & -66.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: I'll be honest here. I'm surprised that FOSL resisted the market's sell-off today. Shares were down (-0.4%) but they did not break down to new relative lows. Even though FOSL held support the future doesn't look very bright here, not with the market accelerating lower. More conservative traders may want to exit early. I am not suggesting new positions at this time.

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

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: 36.31 change: -0.59

Stop Loss: 34.45
Target(s): 39.00, 42.50
Current Option Gain/Loss: -46.1% & + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/06 update: After hitting new multi-year highs on Friday shares of FRX experienced some profit taking today. The trend is up but readers will want to wait for a dip near support before launching new positions.

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

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: 133.90 change: -1.43

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:
06/06 update: I am surprised by the relative strength in GS today. The banking stocks were getting hammered but GS only fell -1%. Overall there has been no change for us. We're still trying to grab the falling knife when GS nears the $130 level. Readers may want to consider trading July calls instead.

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


Union Pacific - UNP - close: 100.13 change: -1.01

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -80.8%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/06 update: Hmm... UNP did not see any follow through on Friday's bounce from $100. Instead the stock rolled over under short-term resistance near $102 and is testing support near $100 and its 50-dma again. If there is any follow through lower tomorrow we will probably get stopped out at $98.95. I am not suggesting new positions at this time.

- 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


PUT Play Updates

Amazon.com Inc. - AMZN - close: 185.69 change: -2.63

Stop Loss: 196.25
Target(s): 180.25, 175.00
Current Option Gain/Loss: +26.2% & +10.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: Our new trade on AMZN is off to a good start. Shares opened at $188.01 and closed down -1.39%. If you were nimble enough shares provided an entry point close to the $190 level where the bounce failed this morning. I am adjusting our stop loss down to $195.25.

Earlier Comments:
The plan was to keep our position size small. Our first target is $180.25. Our second target is $175.00 (or the simple 200-dma, whichever one AMZN hits first).

- small bearish positions -

Long June $185 PUT (AMZN1118R185) Entry @ $2.89

- or -

Long July $180 PUT (AMZN1116S180) Entry @ $4.40

Entry on June 6th at $188.01
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume = 4.5 million
Listed on June 4th, 2011


SanDisk Corp. - SNDK - close: 43.24 change: -1.02

Stop Loss: 47.70
Target(s): 40.50, 36.00
Current Option Gain/Loss: +35.4% & +24.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/06 update: SNDK extended its declines with a -2.3% drop today. Shares opened at $44.31. If you missed the entry point consider waiting for a bounce or failed rally near the $45 level and its 200-dma.

Our targets are $40.50 and $36.00, given enough time. FYI: The P&F chart for SNDK is bearish with a $30 target.

- Suggested Positions -

Long July $42.00 PUT (SNDK1116S42) Entry @ $1.10

- or -

Long July $40.00 PUT (SNDK1116S40) Entry @ $0.69

Entry on June 6th at $44.31
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 5.8 million
Listed on June 4th, 2011


Stericycle Inc. - SRCL - close: 85.55 change: -0.14

Stop Loss: 90.05
Target(s): 84.00, 80.50
Current Option Gain/Loss: +120.0% & +50.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/06 update: SRCL found support at $85.00 this morning and bounced but that bounce was rolling over into the closing bell. The trend is down but I'm not suggesting new positions at this time. I'd rather see a failed rally type of move closer to resistance.

- 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

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: 55.95 change: -1.20

Stop Loss: 60.15
Target(s): 55.10, 52.00
Current Option Gain/Loss: +88.6% & +80.9%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/06 update: WFM extended its losses to four days in a row. The stock is now trading under what was possible support near the late February lows at $56.28. While WFM does look short-term oversold here the next level of support should be the $54.00 level. We have a target at $55.10 and our secondary, more aggressive target is $52.00. Please note our new stop loss at $60.15.

- Suggested Positions -

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

- or -

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

06/06 new stop loss @ 60.15
06/04 new stop loss @ 60.65

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

Alliance Data Systems - ADS - close: 87.73 change: -2.13

Stop Loss: 88.65
Target(s): 96.50, 99.75
Current Option Gain/Loss: -95.8% & -77.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/06 update: The stock market extended its sell-off to four days in a row. ADS followed suit. Today's decline breaks support at the 50-dma and near $88 with the stock's late May lows. Our stop loss was hit at $88.65.

Earlier Comments:
This is an aggressive trade. We want to keep our position size small to limit our risk.

- Suggested (SMALL) Positions -

June $95 call (ADS1118F95) Entry @ $1.20, exit $0.05 (-95.8%)

- or -

July $95 call (ADS1116G95) Entry @ $2.45, exit $0.55 (-77.5%)

06/06 stopped out @ 88.65, Options @ -95.8% & -77.5%
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