Editor's Note:

Our bearish play on Whole Foods Market (WFM) has hit our bearish target. Unfortunately our UNP call play isn't looking so hot. I am also suggesting we exit our SRCL June puts now to lock in a gain.

-James

Current Portfolio:


CALL Play Updates

Baker Hughes Inc. - BHI - close: 72.69 change: +0.11

Stop Loss: 69.90
Target(s): 79.00
Current Option Gain/Loss: -57.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/08 update: Shares of BHI were upgraded this morning but the news had little effect on the stock price. Even the +2% bounce in oil prices failed to have much impact. I remain wary here and I'm not suggesting new positions. We're running out of time with our June options. I am seriously tempted to just exit early right now!

More conservative traders may want to raise their stop loss near the $71.75 area to limit their risk since $72.00 is short-term support. Although I will point out that $70.00 and the 100-dma should offer stronger support, which is why our stop is at $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

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: 102.41 change: +0.62

Stop Loss: 99.39
Target(s): 109.75, 114.00
Current Option Gain/Loss: - 89.1% & -53.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/08 update: Positive analyst comments helped propel FOSL higher this morning. Shares are up two days in a row. Volume increased on today's trading. Thus far support at the $100 level is holding. I'm not suggesting new bullish positions in the current market atmosphere but aggressive traders could buy calls on this bounce and just use a tight stop to limit your risk.

NOTE: If FOSL sees a bounce toward resistance in the $105-106 area I would strongly consider an early exit for our June calls. We're running out of time on June options, which expire at the end of next week.

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: 37.06 change: +0.06

Stop Loss: 34.45
Target(s): 39.00, 42.50
Current Option Gain/Loss: - 0.0% & +25.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/08 update: FRX is still showing strength and managed to deliver another gain although it was pretty anemic. The stock essentially spent the day drifting sideways. There is no change from my prior comments. The relative strength is very encouraging I wouldn't chase it.

NOTE: Conservative traders may want to exit their June calls now. With the bid at 65 cents we can avoid a loss.

Our targets are 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: 131.59 change: -1.40

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:
06/08 update: Financial stocks continue to underperform. GS lost another -1% and closed on its lows for the session. The stock is on the verge of testing support near $130.00. It will be make it or break it time. Remember, this is a high-risk trade as we try to catch the falling knife. UPDATE: I am updating our option to Julys instead of the Junes!

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 July $135 call (GS1116G135) current ask $3.20

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: 99.74 change: -0.93

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -90.1%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/08 update: Warning! UNP has closed under round-number, psychological support at the $100.00 mark. At $99.74 the stock is very close to our stop loss at $98.95 and if the market is negative tomorrow we'll probably get stopped out. 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: 188.05 change: +0.50

Stop Loss: 195.15
Target(s): 180.25, 175.00
Current Option Gain/Loss: -23.1% & -10.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/08 update: Hmm... technology stocks were some of the worst performers today and yet AMZN managed to eke out a gain. You could argue AMZN isn't a tech stock but instead just an online retailer but that doesn't change the relative strength in the stock today. Shares remain under resistance near $190 and its 50-dma. I don't see any changes from my prior comments.

06/07 update: This move can be used as a new entry point to buy puts. More conservative traders may want to use a lower stop loss just remember that AMZN can be a volatile equity.

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

06/07 New stop loss @ 195.15.

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


Diamond Offshore Drilling, Inc. - DO - close: 68.47 change: -0.41

Stop Loss: 72.65
Target(s): 64.50, 62.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/08 update: Crude oil prices managed to bounce on Wednesday (+2%) but that didn't help the oil service stocks. DO continues to sink. I don't see any changes from my Tuesday night comments and would still buy puts at current levels.

Earlier Comments:
DO has found support in the $69.00-68.60 area in the past so more conservative traders may want to use a trigger to buy puts at $68.50. Our targets are $64.50 and $62.50. The Point & Figure chart for DO is currently still bullish but the stock is on the verge of forming a new sell signal.

FYI: Traders should note that the most recent data listed short interest at more than 14% of the float. That does raise the risk of a short squeeze should the stock suddenly find strength.

- Suggested Positions -

Long July $67.50 PUT (DO1116S67.5) entry @ $2.09

Entry on June 8th at $ xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 7th, 2011


Nike Inc. - NKE - close: 80.10 change: -1.80

Stop Loss: 84.05
Target(s): 75.50
Current Option Gain/Loss: +35.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
06/08 update: So far so good. Shares of NKE are following our script and the bounce just reversed at resistance. I would consider new positions now although readers might want to consider a tighter (lower) stop loss.

Our target is $75.50 but we'll adjust the target as the trade progresses. NKE is due to report earnings on June 27th and we do not want to hold over the announcement.

- Suggested Positions -

Long July $80 PUT (NKE1116G80) Entry @ $2.00

Entry on June 7th at $81.75
Earnings Date 06/27/11 (confirmed)
Average Daily Volume = 2.3 million
Listed on June 6th, 2011


SanDisk Corp. - SNDK - close: 42.64 change: -0.41

Stop Loss: 46.25
Target(s): 40.50, 36.00
Current Option Gain/Loss: +50.0% & +31.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/08 update: SNDK extended its losses with another -0.9% decline. Shares are starting to look a little bit oversold. Readers may want to wait for a bounce near $44 or $45 before initiating new positions. Please note that I am lowering our stop loss to $46.25.

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

06/08 New stop loss @ 46.25

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: 85.28 change: -0.42

Stop Loss: 90.05
Target(s): 84.00, 80.50
Current Option Gain/Loss: +100.0% & +46.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/08 update: I am suggesting we take profits on our June $85 puts. The trend is still down but we only have a few trading (7) days left on June options. With SRCL hovering near support at $85.00 the stock could see an oversold bounce, which would make our June options crumble. Let's sell our June puts now!

I am not suggesting new bearish positions at current levels.

- Suggested Positions -

June $85 PUT (SRCL1118R85) Entry @ $0.50, exit $1.00 (+100%)

- or -

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

06/08 Exit June $85 puts. Bid @ $1.00 (+100%)
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: 54.44 change: -2.55

Stop Loss: 60.15
Target(s): 55.10, 52.00
Current Option Gain/Loss: +150.0% & +134.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/08 update: Target achieved. WFM hit our first target at $55.10 and kept right on going. The June $60 put was trading near $4.30 at the time. The July $55 put was near $1.92. More conservative traders may want to exit the rest of our June position now. The stock might find support near the bottom of its February gap near $54.00. I am not suggesting new positions at this time.

FYI: We still have an aggressive, secondary target at $52.00.

- Suggested Positions -

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

- or -

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

06/08 1st target hit @ 55.10. June $60 put @ 4.30 (+95.4%), July $55 put @ 1.92 (+82.8%)
06/06 new stop loss @ 60.15
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