Editor's Note:

This time a strong earnings report from banking giant JPM was not enough to keep stocks afloat. Investors were also disappointed with Bernanke's follow up comments in front of the Senate when asked about the potential for QE3.

Several of our bullish candidates look poised to drop and hit our stop losses. VMW did hit our stop loss today.

-James

Current Portfolio:


CALL Play Updates

Agrium Inc. - AGU - close: 88.67 change: +0.02

Stop Loss: 85.90
Target(s): 94.00, 98.00
Current Option Gain/Loss: + 7.4% & +22.3%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
07/14 update: AGU tried to rally past resistance at $90 again but shares couldn't last above the $90 level. AGU gave back its gains to close virtually unchanged on the session. Today's move also looks like a failed rally at the multi-month trendline of lower highs. I am not suggesting new positions at this time.

- Suggested Positions -

Long AUG $90 call (AGU1120H90) Entry @ $2.70

- or -

Long AUG $95 call (AGU1120H95) Entry @ $0.94

Entry on July 11 at $88.54
Earnings Date 08/03/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on July 9, 2011


BJ's Restaurants, Inc. - BJRI - close: 54.50 change: -1.01

Stop Loss: 53.15
Target(s): 59.50
Current Option Gain/Loss: -28.3%
Time Frame: about one week
New Positions: see below

Comments:
07/14 update: Our caveat to only buy calls if the S&P 500 was up this morning didn't work so well. The market did open higher, thanks to the strong JPM earnings, but the rebound reversed and the S&P closed near its lows today. Meanwhile BJRI opened strong, rallied to a new all-time high over $56.00, and then reversed for a -1.8% loss. Shares of BJRI are now testing short-term technical support at the 10-dma. I would prefer to wait for a bounce before launching new positions. Cautious traders may want to raise their stop loss tonight.

Earlier Comments:
The most recent data listed short interest at 21% of the 24 million-share float. This as an aggressive, higher-risk trade. I am suggesting we limit our risk with small positions. We do not want to hold over the Thursday, July 21st earnings report.

- Suggested (small) Positions -

Long AUG $55 call (BJRI1120H55) Entry @ $3.00

Entry on July 14 at $55.77
Earnings Date 07/21/11 (confirmed)
Average Daily Volume = 245 thousand
Listed on July 13, 2011


Caterpillar - CAT - close: 107.58 change: -1.06

Stop Loss: 105.95
Target(s): 114.00
Current Option Gain/Loss: - 3.1%
Time Frame: Until the earnings report
New Positions: see below

Comments:
07/14 update: Warning! The action in CAT today is the second failed rally near $110.50 in as many days. If there is any market follow through lower tomorrow CAT could easily hit our stop loss near $106. More conservative traders may want to abandon ship right now. I am not suggesting new bullish positions at this time. Aggressive traders willing to handle the risk may want to lower their stop under the $105 level.

Don't forget that we do not want to hold over the July 22nd earnings report.

- Suggested Positions -

Long Aug. $110 call (CAT11H110) entry @ 3.15

07/11 Triggered @ 107.50.
07/09 adjusted trigger to $107.50, stop to $105.95, target to $114.00

Entry on July 11 at $107.50
Earnings Date 07/22/11 (confirmed)
Average Daily Volume = 8.4 million
Listed on July 2, 2011


Cerner Corp. - CERN - close: 61.80 change: -0.76

Stop Loss: 61.45
Target(s): 64.75
Current Option Gain/Loss: +21.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/14 update: Readers may want to hit the eject button here and close positions early. CERN has closed under what should have been support near $62. The stock looks like it will hit our stop loss at $61.45 tomorrow. I am not suggesting new positions at this time.

Earlier Comments:
We do not want to hold over the late July earnings report.

- Suggested (small) Positions -

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

07/09 new stop loss @ 61.45
07/08 Planned exit. July calls @ +125.0%
07/07 new stop loss @ 60.90
07/07 plan on exiting July calls on Friday at the close.
07/02 New stop loss @ 58.75
07/02 Cautious traders may want to exit the July calls now for a gain

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


Diamond Foods Inc. - DMND - close: 76.23 change: -1.07

Stop Loss: 72.75
Target(s): 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Comments:
07/14 update: The bounce in DMND has reversed. Shares look poised to correct lower. I am adjusting our entry point. We will move our buy-the-dip trigger down to $74.25. and move our stop loss to $72.75.

If triggered our first target is $79.50. FYI: The Point & Figure chart for DMND is bullish with a $90 target.

Trigger @ $74.25 *new trigger*

- Suggested Positions -

buy the AUG $75 call (DMND1120H75) -small positions-

07/14 Adjusted entry point to $74.25 and stop to $72.75

Entry on July xx at $ xx.xx
Earnings Date 10/05/11 (unconfirmed)
Average Daily Volume = 237 thousand
Listed on July 11, 2011


Joy Global - JOYG - close: 95.41 change: +0.54

Stop Loss: 89.75
Target(s): 102.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/14 update: Thursday was a volatile day for commodity-related names. Bernanke seemed to step back from any QE3 talk. Shares of JOYG had surged higher this morning only to quickly reverse. The stock traded in a $4.50 range. I am adjusting our entry point strategy. We will move our buy-the-dip trigger down to $92.00 and move our stop loss to $89.75. I would keep positions small.

Trigger @ $92.00 (Small Positions)

- Suggested Positions - Buy the Aug $95 call (JOYG1120H95)

07/14 Adjusted strategy. New trigger @ 92.00, stop @ 89.75
07/11 relist this play with a trigger at $93.00 and stop @ 91.40

07/11 JOYG hit our trigger at $96.00 (actually $95.97) and then hit our stop at $94.75. The option opened at $2.32 (ask) and we were stopped out at $2.20 (bid) for a loss of -5.1% We were fortune this loss was not larger!

07/09 Adjusted trigger to $96.00, stop to $94.75, target to $102.00, and option strike to Aug. $100 call.

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


Norfolk Southern - NSC - close: 74.04 change: -0.57

Stop Loss: 73.40
Target(s): 79.75
Current Option Gain/Loss: -12.8%
Time Frame: up until its earnings report.
New Positions: see below

Comments:
07/14 update: Readers may want to abandon ship or in this case train. The bounce this morning failed at its 10-dma. Now NSC is flirting with a drop under $74. The low today was $73.54. Our stop is at $73.40. The S&P 500 looks like it is headed lower toward the 1300 area. If the market does continue lower I would expect NSC to hit our stop loss.

- Suggested (SMALL) Positions -

Long Aug. $75 call (NSC11H75) Entry @ $1.95

07/14 readers may want to exit early
07/13 the option is back to breakeven. readers could exit here.
07/12 NSC has broken support at $74. Readers may want to exit early
07/11 triggered @ 74.50
07/09 new stop loss @ 73.40. Small positions!
07/06 adjusted entry trigger to $74.50 and stop to 71.75

Entry on July 11 at $74.50
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on July 2, 2011


Panera Bread Co. - PNRA - close: 130.60 change: -1.15

Stop Loss: 128.35
Target(s): 138.50, 144.00
Current Option Gain/Loss: -13.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/14 update: PNRA displayed some volatility today. This morning saw a spike to a new high. Only the rally did not last and shares eventually traded below the bottom of its recent trading range. The low today was $129.00. We have a stop loss at $128.35. I am still not suggesting new positions at this time.

We do not want to hold over the late July earnings report.

Don't forget that PNRA has significant short interest and could see a short squeeze higher. FYI: The most recent data listed short interest at 8.6% of the small 28.2 million-share float.

- Suggested Positions -

Long AUG $135 call (PNRA1120H135) Entry @ $3.40

07/13 option back to breakeven (+0.0%)
07/12 new stop loss @ 128.35

Entry on July 11 at $130.61
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume = 337 thousand
Listed on July 9, 2011


Starbucks Corp. - SBUX - close: 39.13 change: -0.45

Stop Loss: 37.75
Target(s): 44.00
Current Option Gain/Loss: unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/14 update: It should not be surprising to see SBUX breakdown. Shares have been forecasting a move lower with the recent consolidation and trend of lower highs. Currently our plan is to buy the stock (or calls) on a dip at $38.50. More nimble traders could try and time an entry closer to the $38.00 level instead. We do not want to hold positions over the late July earnings report.

Trigger @ $38.50

- Suggested (Small) Positions -

buy the AUG $40.00 call (SBUX1120H40)

07/12 adjust trigger to $38.50
07/11 Our first attempt at a call play on SBUX did not pan out. Shares opened lower at $39.98 and then hit our relatively tight stop loss at $39.45. The option opened at $1.49 (ask) and we were stopped out at $1.22 (bid)for an -18% loss.
We are reloading this trade with a buy-the-dip trigger at $38.75.

Entry on July xx at $ xx.xx
Earnings Date 07/28/11 (unconfirmed)
Average Daily Volume = 6.8 million
Listed on July 9, 2011


CLOSED BULLISH PLAYS

VMware, Inc. - VMW - close: 100.55 change: +0.27

Stop Loss: 99.75
Target(s): 109.75, 114.00
Current Option Gain/Loss: -35.4%
Time Frame: seven trading days
New Positions: see below

Comments:
07/14 update: VMW is still flirting with a breakdown under support at the $100.00 level. The stock did breakdown intraday and hit a low of $99.52. Our stop loss was hit at $99.75.

I would still keep VMW on your watch list but readers may want to wait until after the July 19th earnings report before considering new positions.

- Suggested Positions -

AUG $110 call (VMW1120H110) Entry @ $3.10, exit $2.00 (-35.4%)

07/14 stopped out @ 99.75, option @ $2.00 (-35.4%)

chart:

Entry on July 11 at $103.19
Earnings Date 07/19/11 (confirmed)
Average Daily Volume = 1.9 million
Listed on July 9, 2011