Editor's Note:

Many stocks saw almost no follow through on Thursday's intraday rebound. The S&P 500 also struggled and saw its rebound off the 200-dma from Thursday roll over again. A lot of investors are watching the 1260 and 1250 levels as key support on the S&P 500. A breakdown here would be very bearish.

Don't forget that we only have three weeks left on our July calls.

-James

Current Portfolio:


CALL Play Updates

Currently we have no active call trades. Check tonight's new plays section.


PUT Play Updates

Becton, Dickinson and Company - BDX - close: 84.84 change: -0.84

Stop Loss: --.--
Target(s): 81.50
Current Option Gain/Loss: - 60.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/25 update: BDX did not see any follow through on Thursday's sharp intraday bounce. Shares might actually breakdown from its three-week trading range soon. Readers may want to launch new positions on a new relative low under $84.19. I am adjusting our target to $81.50 to stay above the 200-dma.

- Suggested (SMALL) Positions -

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

06/22 The bid for our option has vanished. I am removing our stop loss on this trade.

chart:

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: 67.71 change: -0.34

Stop Loss: 70.55
Target(s): 64.50, 62.50
Current Option Gain/Loss: -16.7% & -29.2%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/25 update: Shares of DO were upgraded on Friday morning and the news helped give the stock a boost. Yet oil service stocks were some of the market's worst performers and DO reversed forming another failed rally under $70. This move can be used as a new entry point but readers may want to lower their stops.

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

- Second Position -

Long July $67.50 PUT (DO1116S67.5) Entry @ $2.46

06/22 failed rally at $70 is a new entry point. add 2nd position
06/15 new stop loss @ 70.55
06/13 new stop loss @ 71.55

chart:

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


Public Storage - PSA - close: 110.73 change: +1.96

Stop Loss: 113.55
Target(s): 107.50
Current Option Gain/Loss: -24.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/25 update: I had cautioned readers to expect a bounce in PSA. Sure enough the stock opened higher and posted a +1.8% gain. Volume on Friday was almost as strong as Thursday's. The move today happened to get a boost from an analyst upgrade, which probably helped account for the volume. I remain bearish on PSA but readers can choose to launch positions now or look for a failed rally type of move closer to $112.00. Our target is $107.50. More aggressive traders could aim lower but that would require PSA to breakdown under its simple 200-dma (which is certainly possible, especially if the S&P 500 breaks down under 1260 or 1250.

- Suggested (SMALL) Positions -

Long July $110 PUT (PSA1116S110) Entry @ $2.50

chart:

Entry on June 23 at $110.08
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 765 thousand
Listed on June 22, 2011


Transocean Ltd. - RIG - close: 59.81 change: -1.76

Stop Loss: 66.15
Target(s): 58.00, 55.25
Current Option Gain/Loss: +42.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/25 update: RIG is testing support near $60.00 again. Friday's close under this level is bearish but it's no guarantee of future declines. Previously I had suggested that more conservative traders take profits early near $60.00. The trend is very much down and oil service stocks were big underperformers on Friday. My only concern is that RIG is starting to look a little oversold here. I am moving our stop loss down to $65.10. I am not suggesting new positions at this time.

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

- Suggested (SMALL) Positions -

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

06/25 new stop loss @ 65.10
06/20 RIG has hit $60. Cautious traders may want to take profits now (option @ +68%). The newsletter's target is $58.00

chart:

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: 38.94 change: -3.94

Stop Loss: 42.55
Target(s): 40.50, 36.00
Current Option Gain/Loss: +213.6% & +197.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/25 update: Target achieved. A disappointing earnings report from rival Micron (MU) helped send SNDK lower on Friday. SNDK plunged through the $40 level to close at new multi-month lows. Our first target was hit at $40.50 and the puts were trading around $2.65 for the July $42 put and around $1.55 on the July $40 put. If you haven't taken profits yet you might want to do so now with the options up +200% or more.

I am lowering our stop loss down to $42.55. I would not launch new positions here. I'm adjusting our final target to $36.50.

- Suggested Positions -

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

- or -

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

06/25 new stop loss @ 42.55
06/24 1st target hit @ 40.50, Options @ $2.65 (+140.9%) & $1.55 (+124.6%)
06/18 new stop loss @ 45.05
06/08 New stop loss @ 46.25

chart:

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


T.Rowe Price Associates - TROW - close: 56.51 change: -0.57

Stop Loss: 59.05
Target(s): 51.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see Trigger

Comments:
06/25 update: TROW is still bouncing near short-term support at $56.00. The overall trend is remains bearish but I am wary of launching positions. Originally our plan was to buy puts on a bounce near resistance at $60. I am adjusting our strategy tonight since the financial sector looks so weak.

We'll wait for a drop under $56.00 and use a trigger at $55.75 to buy puts. However, we want to keep our position size very small! This is an aggressive entry point. If triggered we'll use a stop loss at $59.05. Our target will be $51.00.

Trigger @ 55.75 -- new trigger

- Suggested Positions -

buy the July $55 PUT (TROW1116S55)

06/25 new strategy. Trigger @ 55.75, stop @ 59.05, Target 51.00

chart:

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


CLOSED BULLISH PLAYS

Costco Wholesale - COST - close: 79.13 change: -1.27

Stop Loss: 78.75
Target(s): 83.90, 87.50
Current Option Gain/Loss: -26.2% & -14.6%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/25 update: Our new COST play is not off to a very good start. The S&P 500's bounce from its 200-dma has already reversed and COST looks like it will follow. COST's morning rally attempt on Friday quickly reversed near $81.00 and shares plunged back under the $80.00 level and its 10, 20 and 50-dma. Lack of follow through on Thursday's intraday bounce and this new close under support is very short-term bearish. COST actually closed on its low for the day. Aggressive traders may want to let it ride but I anticipate COST hitting our stop loss at $78.75 on Monday. Therefore I'm suggesting we hit the eject button and abort this trade early right now.

- Suggested (SMALL) Positions -

July $80 call (COST1116G80) Entry @ $1.60, exit 1.18 (-26.2%)

- or -

Aug. $82.50 call (COST1120H82.5) Entry @ $1.30, exit 1.11 (-14.6%)

06/25 No follow through on the bounce. Exit immediately.

Annotated Chart:

Entry on June 24 at $ xx.xx
Earnings Date 10/05/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on June 23, 2011


Forest Labs Inc. - FRX - close: 39.33 change: -0.56

Stop Loss: 36.75
Target(s): 39.00, 42.50
Current Option Gain/Loss: +121.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/25 update: The market witnessed a widespread decline on Friday and FRX was no exception. Shares are starting to see some profit taking. The $39 and $38 levels might offer some support but I wouldn't count on it. I am suggesting we exit now to lock in a gain before they evaporate.

- Suggested Positions -

August $37 call (FRX1120H37) Entry @ $1.40, exit $3.10 (+121.4%)

06/25 Exit early, Option @ $3.10 (+121.4%)
06/21 new stop loss @ 36.75
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

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


CLOSED BEARISH PLAYS

Cognizant Technology - CTSH - close: 71.14 change: -0.96

Stop Loss: 73.05
Target(s): 68.00, 65.25
Current Option Gain/Loss: -40.0% & -40.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/25 update:j Some of the high-profile technology names have been extremely volatile this week. CTSH is one of them and the stock has been very, very tough to trade. The stock opened this morning under resistance at its 200-dma. Then on no discernable news shares spiked higher with a move to $74.79 only to reverse immediately lower and eventually close down -1.3%. Our stop loss was hit at $73.05. Aggressive traders may want to reconsider launching new put positions here but do so cautiously.

- Suggested (SMALL) Positions -

July $70 PUT (CTSH1116S70) Entry @ $1.75, exit 1.05 (-40.0%)

- or -

Aug $67.50 PUT (CTSH1120T67.5) Entry @ $2.50, exit 1.50 (-40%)

06/24 CTSH spiked past resistance on no news and then quickly reverses lower. Our stop is hit at $73.05. Options @ -40% & -40%

chart:

Entry on June 23 at $70.75
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on June 22, 2011