Editor's Note:

Shares of Forest Labs Inc. (FRX) continue to rally and shares hit our upside target this morning. I am suggesting we take profits in our June puts on WFM immediately.

-James

Current Portfolio:


CALL Play Updates

Apple Inc. - AAPL - close: 326.60 change: +0.70

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:
06/13 update: We are trying to buy calls on a dip near AAPL's 200-dma. That's why we moved the trigger to $324.00. Yet AAPL bounced at $325.07 and the 200-dma has now risen to $324.27. I am moving our trigger back to $325.00 and we'll adjust our stop loss to $318.45.

In summary, this is a very aggressive, higher-risk trade. If the 200-dma fails then AAPL is headed for the next level of support at $320.00. 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


Fossil Inc. - FOSL - close: 106.90 change: +1.42

Stop Loss: 99.39
Target(s): 109.75, 114.00
Current Option Gain/Loss: - 8.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/13 update: Traders bought the dip near short-term support at $105.00 again. This is encouraging to see but I would not open new bullish positions at this time.

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

- Suggested (SMALL) Positions -

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

06/11 Exit June calls ASAP. Option @ 0.35 (-74.6%)

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: 38.57 change: +0.62

Stop Loss: 34.90
Target(s): 39.00, 42.50
Current Option Gain/Loss: +92.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/13 update: Target achieved. I was a little surprised to see FRX rally on news that billionaire activist investor Carl Icahn told FRX that he plans to nominate four candidates to FRX's nine-member board (source: WSJ). The stock gapped open higher at $38.47 and spiked to $39.14 intraday. Our first target to take profits was hit at $39.00. The August $37 call was trading with a bid near $2.85 (+103.5%).

More conservative traders may want to raise their stop higher. FRX is looking very overbought and the $40.00 level could be round-number, psychological resistance. Our secondary target is $42.50. I am not suggesting new positions at this time.

- Suggested Positions -

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

06/13 1st target hit @ $39.00. August $37 call @ $2.85 (+103.5%)
06/11 New stop loss @ 34.90
06/10 Planned exit of June $37 call. exit $1.10 (+69.2%)
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

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: 137.53 change: +1.61

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:
06/13 update: Hmm... given the three-day bounce in GS I'm starting to wonder if we've missed our entry point. Financials rallied again on Monday and GS managed to close above its 20-dma. The overall trend is still down but if you're the optimistic type you could argue that GS formed a little double bottom near $131.55 last week.

I am not suggesting positions at this time. We'll stick to our plan, which is to buy calls (small positions) at $130.25. However, if GS continues to bounce and closes above $140 we'll re-evaluate.

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: 100.64 change: +1.04

Stop Loss: n/a
Target(s): 109.00, 114.00
Current Option Gain/Loss: -93.2%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
06/13 update: UNP is still churning sideways on either side of the $100 level. I remain very wary here and would not start new positions at this time. Odds are that our June $105 call option is going to expire worthless.

- Suggested Positions -

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

06/11 option has deteriorated. Removing the stop loss.

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: 186.29 change: -0.24

Stop Loss: 192.55
Target(s): 180.25, 175.00
Current Option Gain/Loss: -35.6% & -11.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/13 update: It is encouraging to note that AMZN did not produce a bounce today. Shares tried to rebound but failed at their 10-dma this morning. The stock is currently resting on support near the $185.00 level. I am not suggesting new positions at this time. FYI: We have four days left for our June puts. More conservative traders may want to cut their losses now and exit early.

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

06/11 New stop loss @ 192.55
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


Becton, Dickinson and Company - BDX - close: 85.06 change: +0.14

Stop Loss: 87.15
Target(s): 80.50
Current Option Gain/Loss: -30.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/13 update: BDX didn't really move much today. Shares just bounced around the $85.50-84.90 zone. I don't see any changes from my weekend comments. I would still launch new bearish positions here. Our target is $80.50. We'll try and keep our target just above the 200-dma.

NOTE: Just because the July $80 puts are inexpensive don't go overboard. Keep your position size small.

- Suggested (SMALL) Positions -

Long July $80 put (BDX1116S80) Entry @ $0.50

Entry on June 13th at $84.95
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on June 11th, 2011


Diamond Offshore Drilling, Inc. - DO - close: 67.33 change: -0.89

Stop Loss: 71.55
Target(s): 64.50, 62.50
Current Option Gain/Loss: +13.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/13 update: Energy stocks were struggling today and oil services were some of the market's worst performers. Shares of DO spiked down to $66.38 before trimming its losses. I am moving our stop loss down to $71.55. I would prefer to launch new positions on a bounce or failed rally near resistance at $70 and the 200-dma.

Earlier Comments:
Our targets are $64.50 and $62.50. 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

06/13 new stop loss @ 71.55

Entry on June 8th at $68.91
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 7th, 2011


General Dynamics Corp - GD - close: 69.64 change: +0.27

Stop Loss: 72.25
Target(s): 65.50
Current Option Gain/Loss: - 8.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/13 update: Monday was a quiet session for GD. The stock churned sideways under resistance at $70 and its 200-dma. I would still consider new positions now at current levels.

-Suggested Positions-

Long July $67.50 PUT (GD1116S67.5) Entry @ $1.25

Entry on June 10th at $69.75
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on June 9th, 2011


Nike Inc. - NKE - close: 80.51 change: +0.85

Stop Loss: 83.05
Target(s): 75.50
Current Option Gain/Loss: +24.5%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
06/13 update: NKE saw a morning spike toward $82.00 before paring its gains. There is no change from my prior comments. I would still consider new positions now.

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

06/11 New stop loss @ 83.05

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


Transocean Ltd. - RIG - close: 62.23 change: -0.62

Stop Loss: 66.15
Target(s): 58.00, 55.25
Current Option Gain/Loss: +21.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/13 update: RIG was kind enough to gap open higher for us this morning, which set our entry point at $63.32. The rebound quickly faded as oil service stocks were some of the market's worst performers today. RIG dropped to new multi-month lows. You could argue that RIG is a little bit oversold here so we want to keep our position size small to limit our risk.

More conservative traders may want to take profits early near $60.00 since the $60 level might be support but I'm setting our targets at $58.00 and $55.25.

- Suggested (SMALL) Positions -

Long July $60 puts (RIG1116S60) Entry @ $1.32

Entry on June 13th at $63.32
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 4.3 million
Listed on June 11th, 2011


SanDisk Corp. - SNDK - close: 42.45 change: -0.08

Stop Loss: 46.25
Target(s): 40.50, 36.00
Current Option Gain/Loss: +39.0% & +18.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/13 update: SNDK has been moving sideways the last four days. I am expecting an oversold bounce soon. SNDK should have resistance near $45.00 and its 200-dma. Wait for a bounce or failed rally near this level before launching 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: 85.05 change: +0.15

Stop Loss: 90.05
Target(s): 84.00, 80.50
Current Option Gain/Loss: +36.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/13 update: SRCL tried to rally this morning. The stock was upgraded and shares gapped open at $85.72 but the rally quickly faded. Shares spent the day hovering near support at $85.00. There is no change from my weekend comments. More conservative traders may want their stop lower or consider taking profits early right now. Our first target is $84.00. Our second target is $80.50.

- Suggested Positions - Long July $85 PUT (SRCL1116S85) Entry @ $1.50

06/11 new stop loss @ 88.05
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: 54.71 change: +0.48

Stop Loss: 58.15
Target(s): 55.10, 52.00
Current Option Gain/Loss: +136.3% & +106.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/13 update: WFM bounced at the $54.00 level midday. I am suggesting we exit our June puts immediately. The June $60 put has a bid of $5.20 (+136.3%). I'm worried that WFM might see an oversold bounce back toward the $57-58 area or worse. We'll keep our July puts but more conservative traders may want to take profits there too. Our final target for the July puts is $52.00. I am not suggesting new positions at this time.

- Suggested Positions -

June $60 PUT (WFM1118R60) Entry @ $2.20, exit $5.20 (+136.3%)

- or -

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

06/13 Exit June $60 puts. Bid @ $5.20 (+136.3%)
06/11 New stop loss @ 58.15.
06/11 Consider exiting our June puts early.
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