Editor's Note:

High-flying, technology giant AAPL was a significant underperformer on Monday and broke support. Our aggressive call play on AAPL was stopped out but our new put play has been triggered.

Our NKE put play has been stopped out.

-James

Current Portfolio:


CALL Play Updates

Fossil Inc. - FOSL - close: 110.71 change: +4.03

Stop Loss: 104.40
Target(s): 109.75, 114.00
Current Option Gain/Loss: +23.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/20 update: FOSL displayed significant relative strength today with a +3.7% rally and a close over round-number resistance at $110. If there was anything to complain about it would be the low volume on the move. Please note that I am raising our stop loss to $104.40. Our final target is $114.00.

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

06/20 new stop loss @ 104.40
06/18 Cautious traders may want to exit early now.
06/14 1st target hit @ 109.75, July option @ 3.20 (+6.6%)
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: 39.49 change: +0.81

Stop Loss: 35.75
Target(s): 39.00, 42.50
Current Option Gain/Loss: +121.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/20 update: FRX was also showing relative strength with a +2.0% gain. Shares closed over short-term resistance at $39.00. I am raising our stop loss up to $35.75. I am not suggesting new positions at this time.

- Suggested Positions -

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

06/20 new stop loss @ 35.75
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

Entry on May 20th at $35.29
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 3.2 million
Listed on May 19th, 2011


PUT Play Updates

Apple Inc. - AAPL - close: 315.32 change: -4.94

Stop Loss: 325.50
Target(s): 301.00
Current Option Gain/Loss: - 2.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/20 update: The sell-off in AAPL continues. While the rest of the market was bouncing AAPL was breaking down. The stock gapped open lower at $317.36 and then plunged to new 2011 lows near $310 before paring its losses. Our trigger to buy puts was at $318.25 but AAPL gapped open below this level. The July $300 put opened at $4.50.

Readers may want to wait for AAPL to retest $320 as resistance and then launch new positions if you missed the entry point this morning.

AAPL is due to report earnings in late July and we do not want to hold over this announcement. OPEN... $4.50 bid 4.40/4.55

- Suggested Positions -

Long July $300 PUT (AAPL1116S300) Entry @ $4.40

Chart:

Entry on June 20th at $317.36
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume = 13.7 million
Listed on June 18th, 2011


Amazon.com Inc. - AMZN - close: 187.72 change: +1.35

Stop Loss: 192.55
Target(s): 180.25, 175.00
Current Option Gain/Loss: -31.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/20 update: AMZN is trying to bounce but it didn't make it very far and volume was very low today. Wait for a new failed rally near $190 or its 50-dma before considering new bearish positions.

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 July $180 PUT (AMZN1116S180) Entry @ $4.40

06/16 planned exit, June $185 put @ -27.3%
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: 85.96 change: +0.83

Stop Loss: 87.15
Target(s): 80.50
Current Option Gain/Loss: -60.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/20 update: BDX is bouncing from the $85.00 level but shares have not yet broken the bearish trend of lower highs. It does mean that our bearish play is in jeopardy, especially if the market rallies again on Tuesday. I am not suggesting new positions at this time.

Our target is $80.50. We'll try and keep our target just above the 200-dma.

- 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


Deere & Co - DE - close: 80.06 change: +1.53

Stop Loss: 82.75
Target(s): 75.25, 71.00
Current Option Gain/Loss: -42.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/20 update: Investors were bargain hunting in the industrial names today and DE rallied off its morning lows to close on the $80 level. Wait for a new failed rally move before launching positions. DE's next level of resistance to look for an entry point is in the $81.50-82.00 area. Our first target is $75.25. Our second, more aggressive target would be $71. FYI: The Point & Figure chart for DE is bearish with a $71 target.

- Suggested Positions -

Long July $75 PUT (DE1116S75) Entry @ $1.52

Entry on June 16th at $79.25
Earnings Date 08/17/11 (unconfirmed)
Average Daily Volume = 5.7 million
Listed on June 15th, 2011


Diamond Offshore Drilling, Inc. - DO - close: 66.73 change: -0.61

Stop Loss: 70.55
Target(s): 64.50, 62.50
Current Option Gain/Loss: +11.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/20 update: Energy stocks were underperformers today in spite of a bounce in crude oil prices. DO spent most of the day drifting sideways but still closed down -0.9%. I would wait for a bounce near resistance at $70 and its 200-dma before considering new bearish positions.

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

06/15 new stop loss @ 70.55
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


Transocean Ltd. - RIG - close: 59.87 change: -1.40

Stop Loss: 66.15
Target(s): 58.00, 55.25
Current Option Gain/Loss: +68.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/20 update: The sell-off in RIG continues and shares broke down under what should have been round-number support at $60.00. The stock is growing more and more oversold and could see a sharp bounce soon. I am not suggesting new positions at this time. Our first target to take profits is at $58.00.

In previous updates I suggested that more conservative traders take profits early near $60.00.

We wanted to keep our position size small to limit our risk.

- Suggested (SMALL) Positions -

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

06/20 RIG has hit $60. Cautious traders may want to take profits now (option @ +68%). The newsletter's target is $58.00

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: 41.79 change: +0.85

Stop Loss: 45.05
Target(s): 40.50, 36.00
Current Option Gain/Loss: + 57.2% & + 36.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/20 update: SNDK produced a sharp bounce (+2.0%) but the rally quickly stalled at short-term resistance near $42.00. More conservative traders may want to take profits early or lower their stops (or both). I am not suggesting new positions at this time.

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

06/18 new stop loss @ 45.05
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: 86.85 change: +0.44

Stop Loss: 88.05
Target(s): 84.00, 81.00
Current Option Gain/Loss: -30.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/20 update: SRCL is still trying to bounce and rebounded off the $86.00 level this morning. Yet the rally stalled at its 100-dma. If there is any follow through higher tomorrow there is a chance we'll get stopped out at $88.05. I am not suggesting new positions at this time.

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

06/15 adjusted 2nd target to $81.00.
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


T.Rowe Price Associates - TROW - close: 57.67 change: +0.44

Stop Loss: 61.75
Target(s): 55.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see Trigger

Comments:
06/20 update: TROW looks like it's building up steam for a bounce. We're expecting the stock to find resistance at $60.00 or the $61.00 level. We want to buy puts at $59.50. If triggered we'll use a stop loss at $61.75 (new stop). Our target is $55.25. FYI: The Point & Figure chart for TROW is bullish with a $51 target.

Trigger @ 59.50

- Suggested Positions -

buy the July $60 PUT (TROW1116S60)

Entry on June xxth at $ xx.xx
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on June 13th, 2011


Whole Foods Market - WFM - close: 56.90 change: +1.21

Stop Loss: 58.15
Target(s): 55.10, 52.00
Current Option Gain/Loss: - 3.8%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/20 update: The oversold bounce in WFM continues and shares are up three days in a row. The stock got a boost today thanks to an analyst upgrade this morning. The rebound stalled at short-term resistance near $58.00 but if the market continues higher tomorrow there is a good chance we'll get stopped out. I am not suggesting new positions at this time.

- Suggested Positions -

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


Walter Energy, Inc. - WLT - close: 105.59 change: -2.48

Stop Loss: 115.50
Target(s): 100.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see TRIGGER

Comments:
06/20 update: WLT underperformed on Monday thanks to a downgrade by Goldman Sachs. Shares gapped open lower and closed down -2.2%. We do not want to chase it. Right now we're waiting for a bounce back toward resistance. We want to be ready to use that bounce as an entry point to launch bearish positions. The 200-dma should now be resistance. I am suggesting a trigger to open bearish positions at $112.00. We'll use a stop loss at $115.50. WLT can be a volatile stock so we want to keep our position size small to limit our risk. If triggered at $112.00 our target is $100.50. We do not want to hold over the late July earnings report.

Trigger @ $112.00

- Suggested Positions -

Buy the July $105 PUT (WLT1116S105)

- or -

BUy the Sept. $100 PUT (WLT1117U100)

Entry on June xxth at $ xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on June 18th, 2011


CLOSED BULLISH PLAYS

Apple Inc. - AAPL - close: 320.26 change: -4.90

Stop Loss: 318.25
Target(s): 337.50, 347.50
Current Option Gain/Loss: - 36.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/20 update: Ouch! AAPL was a huge underperformer on Monday. The stock gapped open lower at $317.36. This was below support at $320 and below its long-term trendline of support. This was also below our stop loss at $318.25 so our call play was closed immediately.

FYI: Today's move also launches our new put play on AAPL.

This has always been a very aggressive, higher-risk trade.

(SMALL POSITIONS)- Suggested Positions -

July $340 call (AAPL1116G340) entry @ $3.05, exit $1.95 (-36.0%)

06/20 gap down exit @ 317.36, option @ $1.95 (-36.0%)
06/16 new stop loss @ 318.25

chart:

Entry on June 15th at $325.00
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume = 12.9 million
Listed on June 8th, 2011


CLOSED BEARISH PLAYS

Nike Inc. - NKE - close: 83.23 change: +2.12

Stop Loss: 83.05
Target(s): 75.50
Current Option Gain/Loss: -25.0%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
06/20 update: After two weeks of failing at resistance near the $82 area and the 200-dma shares of NKE suddenly found new strength. The stock rallied +2.6% and closed above resistance. Shares hit our stop loss at $83.05 along the way. NKE's larger trend still has a bearish pattern of lower highs but short-term today's breakout is definitely bullish.

- Suggested Positions -

July $80 PUT (NKE1116G80) Entry @ $2.00, exit $1.50 (-25%)

06/20 stopped out @ 83.05, option @ $1.50 (-25%)
06/11 New stop loss @ 83.05

chart:

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