Editor's Note:

The S&P 500's intraday dip under support at 1300 may have spooked some traders. We had CAT, CERN, and PNRA all get stopped out. Our two new trades, NUS and POT, were not opened.

-James

Current Portfolio:


CALL Play Updates

Agrium Inc. - AGU - close: 88.08 change: -1.30

Stop Loss: 85.90
Target(s): 94.00, 98.00
Current Option Gain/Loss: -18.5% & -20.2%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
07/18 update: AGU dipped toward its 100 and 200-dma before finding support. Volume was pretty light on today's pull back. I am still suggesting readers wait for a breakout higher and move past $90.50 before initiating new positions.

- 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: 54.39 change: +0.40

Stop Loss: 53.15
Target(s): 59.50
Current Option Gain/Loss: -31.6%
Time Frame: about one week
New Positions: see below

Comments:
07/18 update: I am honestly shocked at the relative strength in BJRI today. Given the market's weakness I would have expected a new relative low for BJRI. We are almost out of time for this trade. Cautious traders may want to exit early anyway. I am not suggesting new positions at this time. 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


Diamond Foods Inc. - DMND - close: 74.50 change: -0.85

Stop Loss: 72.75
Target(s): 79.50
Current Option Gain/Loss: -22.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/18 update: DMND tried to rally this morning but reversed under short-term resistance. The stock did manage to tag a new two-week low but shares are holding at technical support at the 30-dma. This level has not been broken in months. Cautious traders may want to raise their stop loss toward the $73.50 area. Given the market's rebound off its intraday lows today I would still be tempted to buy calls on DMND at current levels. Just remember to keep positions small. FYI: The Point & Figure chart for DMND is bullish with a $90 target.

- Suggested (small) Positions -

Long AUG $75 call (DMND1120H75) Entry @ $2.25

07/15 triggered at $74.25
07/14 Adjusted entry point to $74.25 and stop to $72.75

Entry on July 15 at $74.25
Earnings Date 10/05/11 (unconfirmed)
Average Daily Volume = 237 thousand
Listed on July 11, 2011


Joy Global - JOYG - close: 97.31 change: +1.90

Stop Loss: 89.00
Target(s): 102.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Comments:
07/18 update: JOYG was relative resilient today. Traders bought the dip near short-term support in the $94 region. JOYG had almost recovered by the closing bell. I'm still thinking that aggressive traders may want to buy calls now and use a stop loss in the $93.50 area. I am actually lowering the newsletter's entry point from $92.00 down to $91.00 and adjusting our stop to $89.00. I would keep positions small.

Trigger @ $91.00 (Small Positions)

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

07/18 New trigger @ 91.00. Stop @ 89.00. Still thinking Aggressive traders may want to buy calls now with a stop in the $93.50 area
07/16 Aggressive traders may want to buy calls now instead
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


Nu Skin Enterprises - NUS - close: 39.76 change: -0.24

Stop Loss: 38.25
Target(s): 44.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/18 update: NUS did not meet our requirements to launch positions today. We wanted both the stock and the S&P 500 to open higher. NUS did open higher but the market did not. Shares of NUS were actually upgraded this morning but the rally didn't last and shares closed back under resistance at $40.00. So now that our trade did not get filled what do we do?

I am suggest we wait one day and then re-evaluate. It looks like NUS might dip toward its rising 10-dma. I want to wait and see how shares trade tomorrow and then we'll determine what our new entry point strategy will be. Nimble traders could try buying calls on a dip at the 10-dma. Or you could wait for a new high past $40.40.

Earlier Comments:
Our target is the $44.00 mark but we will plan to exit ahead of the early August earnings report. FYI: The Point & Figure chart for NUS is bullish with a $62 target. Investors should note that the most recent data did list short interest at 14.4% of the 53.4 million-share float. That does provide some fuel for a short squeeze.

- Suggested Positions -

We are going to wait until after Tuesday's close and then reconsider an entry point.
07/18 Our play has not been opened yet. We're going to wait 24 hours and reconsider.

Entry on July 18 at $ xx.xx
Earnings Date 08/02/11 (confirmed)
Average Daily Volume = 700 thousand
Listed on July 16, 2011


Potash Corp. - POT - close: 58.77 change: -0.43

Stop Loss: 56.70
Target(s): 63.75, 68.00
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to July 28th
New Positions: Yes, see below

Comments:
07/18 update: Our requirements to launch positions was not met. We wanted both shares of POT and the S&P 500 to open higher. POT did find intraday support near $58.00 and its 10-dma. The short-term trend of higher lows is still intact. Aggressive traders may want to buy calls now.

I am suggesting we try again with the same rules. Buy calls on POT if the stock and the S&P 500 opens higher tomorrow. Please note that I am inching up our stop loss to $56.70. More conservative traders may want to use a stop closer to $57.50 instead.

Earlier Comments:
Our first target is $63.75. Our second, more aggressive target is $68.00. Keep in mind that we have less than two weeks. POT is due to report earnings on July 28th. We do not want to hold over the announcement. Thus the $68 target will probably not get hit. FYI: The Point & Figure chart for POT is bullish with a $76 target.

- Suggested Positions -

buy the AUG $60 call (POT1120H60)
07/18 We are still unopened. Try again. Both POT and S&P 500 need to open higher on July 19th to buy calls.
07/18 New stop @ 56.70

Entry on July 19 at $ xx.xx
Earnings Date 07/28/11 (confirmed)
Average Daily Volume = 7.4 million
Listed on July 16, 2011


Starbucks Corp. - SBUX - close: 39.40 change: -0.40

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:
07/18 update: SBUX lost -1% on the day. I do not see any changes from my prior comments. If we see shares close over $40.00 I might be tempted to buy it with a stop just under $39.00. Otherwise we will keep our buy-the-dip trigger at $38.50. 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


PUT Play Updates

FactSet Research - FDS - close: 93.94 change: -1.05

Stop Loss: 100.25
Target(s): 90.50, 86.00
Current Option Gain/Loss: -11.4% & -10.4%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/18 update: Our aggressive, higher-risk trade on FDS is off to a good start. Shares opened at $94.48 and closed at new multi-month lows. I do want to remind readers that we wanted to keep positions small. FDS remains oversold and due for a bounce. We want to keep cash available as we might get a better entry point on a bounce or failed rally near $98.00.

Earlier Comments:
Our targets are $90.50 and $86.00 but the $90.00 level is support and FDS will probably see a bounce from this level. The Point & Figure chart for FDS is bearish with a $64 target.

- Suggested (SMALL) Positions -

Long AUG $95 PUT (FDS1120T95) Entry @ $3.50

- or -

Long SEP $90 PUT (FDS1117U90) Entry @ $2.40

Entry on July 18 at $94.48
Earnings Date 09/21/11 (unconfirmed)
Average Daily Volume = 363 thousand
Listed on July 16, 2011


CLOSED BULLISH PLAYS

Caterpillar - CAT - close: 107.80 change: -1.10

Stop Loss: 106.40
Target(s): 114.00
Current Option Gain/Loss: -14.2%
Time Frame: Until the earnings report
New Positions: see below

Comments:
07/18 update: CAT was down nearly -3% intraday before paring its gains in the last two hours of trading. Traders bought the dip three times, at $106.35, at $106.16, and finally at $106.23. Unfortunately our stop loss was at $106.40 so the trade has been closed. If you're still long options I would not hold over the earnings report.

- Suggested Positions -

Aug. $110 call (CAT11H110) entry @ 3.15, exit 2.70 (-14.2%)

07/18 stopped out @ 106.40, option @ -14.2%
07/16 new stop loss @ 106.40
07/16 Plan on exiting on Thursday at the close if CAT does not hit our target
07/11 Triggered @ 107.50.
07/09 adjusted trigger to $107.50, stop to $105.95, target to $114.00

chart:

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: 61.54 change: -0.36

Stop Loss: 61.45
Target(s): 64.75
Current Option Gain/Loss: + 3.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
07/18 update: CERN succumbed to market weakness and declined to $60.69 intraday. Our stop loss was hit at $61.45 closing the play early this morning. The intraday rebound almost looks like a short-term bottom. Nimble traders may want to consider buying calls again on a close above the simple 10-dma.

- Suggested (small) Positions -

Aug. $62.50 call (CERN1120H62.5) Entry @ $1.60, exit $1.65 (+3.1%)

07/18 stopped out @ 61.45, option @ +3.1%
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

chart:

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


Panera Bread Co. - PNRA - close: 128.33 change: -1.91

Stop Loss: 128.35
Target(s): 138.50, 144.00
Current Option Gain/Loss: -42.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/18 update: After two weeks of consolidating sideways near all-time highs PNRA finally caved into profit taking. The stock hit our stop loss at $128.35 by noon. The play is closed. However, I'm still longer-term bullish on PNRA. I would keep this stock on your watch list. A dip or a bounce in the $126-124 area could be a new entry point.

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 -

AUG $135 call (PNRA1120H135) Entry @ $3.40, exit $1.95 (-42.6%)

07/18 stopped out @ 128.35, option @ -42.6%
07/13 option back to breakeven (+0.0%)
07/12 new stop loss @ 128.35

chart:

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