Editor's Note:

The U.S. stock market ended the second quarter on a strong note, up +4% in the last four days. Stocks are surging through overhead resistance levels, putting the bears on the run. Semiconductors and oil service stocks were some of the best performers today.

We did see both our bearish oil service plays get stopped out (DO and RIG).

-James

Current Portfolio:


CALL Play Updates

Abercrombie & Fitch Co - ANF - close: 66.92 change: -0.46

Stop Loss: 63.45
Target(s): 69.50, 71.50
Current Option Gain/Loss: - 6.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
06/30 update: I am very disappointed in ANF's performance. The stock market's major averages continue to surge higher and are up +4% on the week. Yet ANF has stalled at short-term resistance near $68 while the S&P 500 is breaking through overhead resistance.

We only have two weeks left on July options. Cautious traders may want to exit early. I am not suggesting new bullish positions at this time!

- Suggested (SMALL) Positions -

Long July $67.50 call (ANF1116G67.5) Entry @ $1.50

Entry on June 28 at $65.48
Earnings Date 08/17/11 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on June 27, 2011


Cerner Corp. - CERN - close: 61.11 change: +0.58

Stop Loss: 57.45
Target(s): 64.75
Current Option Gain/Loss: - 3.1% & - 9.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/30 update: CERN continues to inch higher. Shares almost kept pace with the rally in the NASDAQ today. The stock market looks short-term overbought and due for a dip so readers may want to wait for a dip to $60.00 in CERN before initiating new positions.

There is some resistance in the $62.50 area but I'm setting our target at $64.75. We do not want to hold over the late July earnings report. Keep in mind that July options expire in less than three weeks.

- Suggested (small) Positions -

Long July $60 call (CERN1116G60) Entry @ $1.60

- or -

Long Aug. $62.50 call (CERN1120H62.5) Entry @ $1.60

Entry on June 29 at $60.76
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 624 thousand
Listed on June 28, 2011


Teradata Corp. - TDC - close: 60.20 change: +0.88

Stop Loss: 53.45
Target(s): 59.75, 64.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
06/30 update: TDC delivered a +1.4% gain but shares are still flirting with resistance at the $60.00 level. The stock looks short-term overbought so we don't want to chase it. At the moment we have a buy-the-dip entry point to buy calls at $56.50. FYI: TDC's P&F chart has produced a new triple-top breakout buy signal with a $79 target.

Trigger @ $56.50

- Suggested Positions -

buy the Aug. $60 call (TDC1120H60)

Entry on June xx at $ xx.xx
Earnings Date 08/04/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 25, 2011


Tiffany & Co. - TIF - close: 78.52 change: +0.78

Stop Loss: 73.25
Target(s): 79.75, 84.00
Current Option Gain/Loss: + 6.8% & - 6.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/30 update: TIF is still marching higher and shares added +1.0%. The stock outperformed the RLX retail index's +0.5% gain. The $80.00 level is probably overhead resistance so I'd prefer to wait for a dip before considering new positions. Wait for a dip into the $77-75 area. Our targets are $79.75 for the July calls and $79.75 and $84.00 for the August calls. Readers may want to raise their target for the July calls.

- Suggested (SMALL) Positions -

Long July $77.50 call (TIF1116G77.5) entry @ $1.90

- or -

Long Aug. $80 call (TIF1120H80) entry @ $2.44

Entry on June 28 at $76.80
Earnings Date 08/26/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 27, 2011


PUT Play Updates

Becton, Dickinson and Company - BDX - close: 86.17 change: +0.33

Stop Loss: --.--
Target(s): 81.50
Current Option Gain/Loss: -100.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/30 update: BDX keeps trying to climb higher but it's not making much progress. Shares remain under resistance near $87.00. I am still not suggesting new bearish positions at this time.

- 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.

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


Goldman Sachs - GS - close: 133.09 change: +0.56

Stop Loss: 135.55
Target(s): 121.00, 116.00
Current Option Gain/Loss: -89.6% & -46.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/30 update: Financials tried to bounce again but the group lost momentum on Friday. GS couldn't make it past resistance near $134.00. While this is encouraging for the bears the short-term trend for stocks is up and our trade is at risk. I am not suggesting new positions at this time.

I do consider this an aggressive trade. GS can be a very volatile stock at times. We do not want to hold over the mid July earnings report. FYI: The Point & Figure chart for GS is bearish with a $102 target.

- Suggested Positions -

Long July $125.00 PUT (GS1116S125) entry @ 1.65

- or -

Long Aug. $125.00 PUT (GS1120T125) entry @ 4.20

06/29 new stop loss @ 135.55

Entry on June 28 at $129.00
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on June 25, 2011


SanDisk Corp. - SNDK - close: 41.50 change: +1.01

Stop Loss: 42.55
Target(s): 40.50, 36.50
Current Option Gain/Loss: + 14.5% & - 21.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/30 update: SNDK is getting closer and closer to resistance in the $42.00-42.50 area. The stock produced a strong bounce today with a +2.4% gain. Today's rally followed a similar move in the SOX semiconductor index, which surged toward overhead resistance at its simple and exponential 200-dma. I am not suggesting new bearish positions at this time.

- 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, final target 36.50
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

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: 60.34 change: +1.06

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:
06/30 update: TROW has rallied over round-number resistance at $60.00 and is nearing technical resistance at its 50 and 200-dma. Speaking of which the 50-dma just crossed under its 200-dma, which is normally a very bearish development. Odds are that our current entry point at $55.75 is not going to work. We'll give TROW one more day and then re-evaluate a possible entry point in the $60-61 area. Otherwise we'll drop TROW as a bearish candidate.

Trigger @ 55.75

- Suggested Positions -

buy the July $55 PUT (TROW1116S55)

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

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 BEARISH PLAYS

Diamond Offshore Drilling, Inc. - DO - close: 69.41 change: +1.31

Stop Loss: 70.55
Target(s): 64.50, 62.50
Current Option Gain/Loss: -80.8% & -83.7%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
06/30 update: Oil service stocks continued to soar higher and the OSX index rallied through technical resistance at its 50-dma. DO rallied as well and shares of DO traded above resistance at $70.00, at its 50-dma and at its 200-dma. Our stop loss was hit at $70.55.

Earlier Comments:
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 -

July $67.50 PUT (DO1116S67.5) entry @ $2.09, exit @ 0.40 (-80.8%)

- Second Position -

July $67.50 PUT (DO1116S67.5) Entry @ $2.46, exit @ 0.40 (-83.7%)

06/30 Stopped out @ 70.55
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


Transocean Ltd. - RIG - close: 64.56 change: +0.57

Stop Loss: 65.10
Target(s): 58.00, 55.25
Current Option Gain/Loss: -84.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/30 update: Oil service stocks continued to rebound higher on Thursday and RIG traded above resistance at $65.00. Our stop loss was hit at $65.10.

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

- Suggested (SMALL) Positions -

Long July $60 puts (RIG1116S60) Entry @ $1.32, exit 0.20 (-84.8%)

06/30 stopped out @ 65.10
06/29 RIG is bouncing as expected.
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