Editor's Note:

Stocks have reversed from oversold to overbought in just five days. No one was expecting +6% in a week. We are starting to see capitulation by the bears. Our last three active put plays have been stopped out and I have removed TROW as a potential trade.

Don't forget that July options expire in two weeks!

-James

Current Portfolio:


CALL Play Updates

Abercrombie & Fitch Co - ANF - close: 68.72 change: +1.80

Stop Loss: 64.85
Target(s): 69.50, 71.50
Current Option Gain/Loss: +52.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
07/02 update: ANF finally started participating in the market's rally again with a +2.6% gain on Friday. Yet shares have not been able to rally past its gap down from early June. This remains overhead resistance and with the stock market overbought I am concerned. Should the stock market correct after its +6% gain in five days it could push ANF back down toward support near $65 and its 100-dma.

Please note our new stop loss @ 64.85.

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

07/02 Cautious traders may want to take profits now. We only have 2 weeks left on July options. Current bid on our July $67.50 call is $2.29 (+52.6%).
07/02 new stop loss @ 64.85

chart:

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: 62.54 change: +1.43

Stop Loss: 58.75
Target(s): 64.75
Current Option Gain/Loss: +38.4% & +28.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/02 update: A strong week for CERN has lifted the stock from support near $58.00 to resistance near $62.50. I would expect a dip here before CERN actually breaks out to new highs. A dip back toward the $61 area might work. Please note that I am raising our stop loss to $58.75. More conservative traders may want to exit their July $60 calls right now to lock in a gain, especially with the market short-term overbought.

Earlier Comments:
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.

- Suggested (small) Positions -

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

- or -

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

07/02 New stop loss @ 58.75
07/02 Cautious traders may want to exit the July calls now for a gain

chart:

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


Joy Global - JOYG - close: 97.14 change: +1.90

Stop Loss: 89.90
Target(s): 99.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/02 update: JOYG extended its seven-day rally to $13.00. The stock is growing more and more short-term overbought and due for a dip. I do not see any changes from my comments from Thursday night.

Earlier Comments:
I am expecting pull back. Broken resistance should be new support. Therefore I am suggesting we launch small bullish call positions on a dip at $92.75 with a stop loss at $89.90. Our upside target is $99.50. More conservative traders could wait for a dip closer to $92.00 instead as their entry point.

Aggressive traders could use July calls, which expire in about two weeks. I am suggesting the August calls.

Trigger @ $92.75 (Small Positions)

- Suggested Positions -

(Aggressive Traders Only - These Expire in 2 Weeks)
Buy the July $95 call (JOYG1116G95)

- or -

Buy the Aug $95 call (JOYG1120H95)

chart:

Entry on June xx at $ xx.xx
Earnings Date 08/31/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on June 30, 2011


Teradata Corp. - TDC - close: 60.91 change: +0.71

Stop Loss: 54.90
Target(s): 61.00, 64.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/02 update: TDC is also growing more and more overbought. The trend looks very bullish but we don't want to chase it. We'll raise our buy-the-dip entry point to $57.55 and raise our stop loss to $54.90. I'm adjusting our profit targets to $61.00 and $64.00.

Trigger @ $57.55

- Suggested Positions -

buy the Aug. $60 call (TDC1120H60)

07/02 New trigger @ 57.55, new stop @ 54.90, new targets @ 61.00 & 64.00

chart:

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: 79.40 change: +0.88

Stop Loss: 74.85
Target(s): 79.75, 84.00
Current Option Gain/Loss: +35.2% & + 7.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/02 update: TIF rallied to another new all-time high on Friday. Shares are nearing what could be round-number, psychological resistance at the $80.00 level. I would expect a pull back soon. TIF could find some support in the $77-75 area. We will raise our stop loss to $74.85. I am not suggesting new bullish positions at this time.

More conservative traders may want to exit the July calls now with the bid at $2.57 (+35.2%). Officially, our targets are $79.75 for the July calls and $79.75 and $84.00 for the August calls.

- Suggested (SMALL) Positions -

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

- or -

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

07/02 new stop loss @ 74.85
07/02 Cautious traders may want to exit the July calls now with the bid at $2.57 (+35%)

chart:

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


CLOSED BEARISH PLAYS

Becton, Dickinson and Company - BDX - close: 89.30 change: +3.13

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

Comments:
07/02 update: After weeks of churning sideways BDX has finally broken out above resistance with a huge surge on Friday. I am dropping it from the newsletter. Our July calls were already dead at -100%. Our plan was to use small positions to limit our risk.

- Suggested (SMALL) Positions -

July $80 put (BDX1116S80) Entry @ $0.50, exit 0.00 (-100%)

07/02 dropping BDX following Friday's big rally.
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


Goldman Sachs - GS - close: 136.65 change: +3.56

Stop Loss: 135.55
Target(s): 121.00, 116.00
Current Option Gain/Loss: -87.8% & -59.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/02 update: Financials decided to participate in the market's very broad based rally on Friday. GS chose to play along too and the stock rallied +2.6%. Shares rallied past resistance at $134.00 and $135.00 to hit our stop loss at $135.55.

Earlier Comments:
I do consider this an aggressive trade. GS can be a very volatile stock at times.

- Suggested Positions -

July $125.00 PUT (GS1116S125) entry @ 1.65, exit 0.20 (-87.8%)

- or -

Aug. $125.00 PUT (GS1120T125) entry @ 4.20, exit 1.70 (-59.5%)

07/01 stopped out @ 135.55.
06/29 new stop loss @ 135.55

chart:

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: 42.80 change: +1.30

Stop Loss: 42.55
Target(s): 40.50, 36.50
Current Option Gain/Loss: - 20.9% & - 56.5%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/02 update: SNDK has rallied from under $39 to almost $43 in the last five days. Shares hit our stop loss at $42.55 on Friday. The intermediate trend is still down for SNDK but I would not launch new bearish positions at this time.

- Suggested Positions -

July $42.00 PUT (SNDK1116S42) Entry @ $1.10, exit $0.87 (-20.9%)

- or -

July $40.00 PUT (SNDK1116S40) Entry @ $0.69, exit $0.30 (-56.5%)

07/01 stopped out @ 42.55
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

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: 61.00 change: +0.66

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:
07/02 update: TROW has seen a huge surge higher from $56 to $61. Shares managed to close over technical resistance at its 50-dma. Yet the rally remains under resistance near its mid to late May lows and its simple 200-dma.

Aggressive and nimble traders might want to consider bearish positions on a failed rally in this $61.50-61.00 area. I am removing TROW from the play list. Our trigger to open positions at $55.75 was never hit.

Our Trade Never Opened.

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