Editor's Note:

A widespread bounce appeared across most of the stock market. Biotech, disk drives, airlines and casinos were the exceptions.

The bounce may not be over yet but the intermediate trend is still down!

-James

Current Portfolio:


CALL Play Updates

Apple Inc. - AAPL - close: 331.49 change: -0.75

Stop Loss: 317.45
Target(s): 337.50, 347.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
06/09 update: I find it very interesting that AAPL did not participate in the market's widespread bounce today. There is no change from my prior comments.

This is an aggressive trade, given the short-term down trend, but I'm suggesting we buy calls on a dip at $325.00. This will be close to the 200-dma and relatively close to AAPL's long-term trendline of higher lows. The April low was near $320 so I'm setting our stop loss at $317.45 just in case AAPL does see a spike toward the $320 area. Let's keep our position size small to limit our risk. We have two targets at $337.50 and $347.50.

Trigger @ $325.00 (SMALL POSITIONS)

- Suggested Positions -

buy the July $340 call (AAPL1116G340)

Entry on June xxth at $ xx.xx
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume = 12.9 million
Listed on June 8th, 2011


Baker Hughes Inc. - BHI - close: 74.70 change: +2.01

Stop Loss: 69.90
Target(s): 79.00
Current Option Gain/Loss: -21.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/09 update: BHI displayed some relative strength and outperformed many of its peers with a +2.7% gain today. Shares are nearing resistance at the $75.00 level. Traders may want to consider buying a rally above $75.00 but if you do I would raise your stop near $72.00 (be sure to buy July calls and not Junes).

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: 105.76 change: +3.35

Stop Loss: 99.39
Target(s): 109.75, 114.00
Current Option Gain/Loss: - 67.3% & -23.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: After flirting with a breakdown under support for several days FOSL is surging higher now that we have an up day for the market. Volume was strong behind the rally, which is a good sign. The stock is firmly inside the $105-106 resistance area so you may not want to launch positions here.

NOTE: Readers may want to exit the June calls now (bid $0.45). If you do you're giving up the chance that FOSL continues to rally higher. Then again if FOSL rolls over from here this call value will vanish pretty quickly.

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: 37.86 change: +0.86

Stop Loss: 34.45
Target(s): 39.00, 42.50
Current Option Gain/Loss: +61.5% & +53.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/09 update: FRX continues to show relative strength. I'm concerned that shares are starting to look a little overbought. Please note that I'm suggesting we exit our June calls tomorrow (Friday) at the closing bell to avoid the time decay over the weekend. June options expire at the end of next week. I am not suggesting new positions at this time.

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

06/09 Prepare to exit the June calls on June 10th at the close
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: 133.53 change: +1.94

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:
06/09 update: Financials were in bounce mode but the rebound in GS stalled at resistance near $135.00. Shares were sinking lower into the closing bell. 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 July $135 call (GS1116G135)

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: 101.29 change: +1.55

Stop Loss: 98.95
Target(s): 109.00, 114.00
Current Option Gain/Loss: -83.3%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/09 update: UNP delivered +1.5% bounce but shares remain under short-term resistance at $102 and its 30-dma. I would not launch 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: 189.68 change: +1.63

Stop Loss: 195.15
Target(s): 180.25, 175.00
Current Option Gain/Loss: -53.2% & -23.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: Technology stocks were laggards most of the session. AMZN spent most of the day stuck under resistance at the $190.00 level. Late this afternoon there was a spike higher but the stock failed near its 50-dma. I'm not suggesting new positions tonight. Let's see how shares fare on Friday.

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: 69.18 change: +0.71

Stop Loss: 72.65
Target(s): 64.50, 62.50
Current Option Gain/Loss: -17.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/09 update: Oil stocks are starting to see a little bounce. Look for DO to bounce toward resistance near $70.00 and its 200-dma. We can launch new positions near $70 or wait for a bounce or failed rally near the 10-dma currently near $71.00 instead.

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: 80.67 change: +0.57

Stop Loss: 84.05
Target(s): 75.50
Current Option Gain/Loss: +18.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
06/09 update: NKE's bounce kept pace with the rebound in the major indices. I would still consider new put positions now or you could wait for another failed rally type of move near the 200-dma.

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: 42.53 change: -0.11

Stop Loss: 46.25
Target(s): 40.50, 36.00
Current Option Gain/Loss: +47.2% & +30.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/09 update: SNDK failed to participate in the market's widespread rebound today. That's good news for the bears. Yet I would not launch new positions here. Readers may want to wait for a bounce near $44 or $45 before initiating new positions.

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: 86.08 change: +0.80

Stop Loss: 90.05
Target(s): 84.00, 80.50
Current Option Gain/Loss: +13.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/09 update: SRCL is still churning sideways above support near $85.00. I am concerned the stock could see an oversold bounce back toward $88 or even the $90 level and resistance at its 50-dma.

I am not suggesting new bearish positions at current levels.

- Suggested Positions - 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: 55.14 change: +0.70

Stop Loss: 60.15
Target(s): 55.10, 52.00
Current Option Gain/Loss: +118.1% & + 90.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/09 update: WFM produced an oversold bounce that stalled intraday at resistance near $56.00. That doesn't mean the bounce is over. More conservative traders may want to exit the rest of our June put positions. 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

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