Editor's Note:

We are updating a few stop losses tonight. The market is nervous that lawmakers will not get a deal done before the Aug. 2nd deadline. These concerns prompted the stock market to spike lower at the open. Many stocks gapped open lower. Yet there wasn't any follow through and most equities saw an intraday bounce that unfortunately faded lower into the closing bell.

-James

Current Portfolio:


CALL Play Updates

Agrium Inc. - AGU - close: 92.40 change: -0.16

Stop Loss: 87.75
Target(s): 94.00, 98.00
Current Option Gain/Loss: +51.8% & +64.8%
Time Frame: 4 to 5 weeks
New Positions: see below

Comments:
07/25 update: AGU managed to hit a new relative high at $93.49 this afternoon before the market began to rollover this afternoon. Shares have since pared their gains. The sharp pull back from its intraday high almost looks like a short-term top. I would not be surprised to see a correction back toward support near $90.00 and its simple 10-dma. Currently our stop loss is at $87.75 but I'm tempted to raise it into the $88.50-89.00 zone.

- Suggested Positions -

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

- or -

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

07/21 New stop @ 87.75
07/19 Breakout past $90.00 is a new entry point.
07/19 new stop @ 86.90

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


Caterpillar Inc. - CAT - close: 105.66 change: +0.51

Stop Loss: 102.95
Target(s): 110.00,
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/25 update: Neither CAT nor the S&P 500 opened higher this morning. Concerns over the lack of a debt ceiling compromise pushed stocks lower at the open. Yet CAT has produced a decent intraday bounce. Shares are still struggling with the 100-dma as technical resistance but the stock acts like it wants to rally.

I am suggesting we try again. We want to buy calls if both CAT and the S&P 500 open in positive territory tomorrow morning.

buy calls if both CAT & S&P 500 are positive tomorrow morning

- Suggested Positions -

buy the AUG $105 call (CAT1120H105)

- or -

buy the AUG $110 call (CAT1120H110)

Entry on July xx at $ xx.xx
Earnings Date 07/22/11 (confirmed)
Average Daily Volume = 8.5 million
Listed on July 23, 2011


Diamond Foods Inc. - DMND - close: 74.92 change: -0.44

Stop Loss: 73.60
Target(s): 79.50, 83.00
Current Option Gain/Loss: -31.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/25 update: DMND spent the session trading sideways in a narrow range. This has been the trend for the last three days in a row. I am growing more concerned and I'm tempted to raise our stop loss but the low on July 18th was $73.77. DMND has been using the rising 30-dma as technical support and the stock has rebounded from this moving average several times over the last several weeks. Currently the 30-dma is at $74.72. Readers may want to use that as a guide for raising their stop loss. We are leaving our stop at $73.60 tonight. I am not suggesting new bullish positions at this time. Cautious traders may want to just abandon ship and exit now since DMND has not been performing. You could jump back in later.

- Suggested (small) Positions -

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

07/23 Cautious traders may want to exit early now
07/19 new stop loss @ 73.60
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


Helmerich & Payne Inc. - HP - close: 72.60 change: +0.04

Stop Loss: 68.45
Target(s): 76.50
Current Option Gain/Loss: +28.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/25 update: The combination of the market's morning weakness and an analyst downgrade prompted shares of HP to open lower at $71.20. Shares bought the dip near $71 and the stock has recouped its losses. The trend is up but we're running out of time.

HP reports earnings on Friday morning (July 29th). We will plan to exit on Thursday at the closing bell if we don't see an exit or get stopped before then. More conservative traders may want a stop closer to $70.00 instead.

- Suggested Positions -

Long AUG $75 call (HP1120H75) Entry @ $1.25

07/23 new stop loss @ 68.45
07/23 Plan to exit on July 28th at the close

Entry on July 20 at $71.49
Earnings Date 07/29/11 (confirmed)
Average Daily Volume = 1.3 million
Listed on July 19, 2011


Joy Global - JOYG - close: 100.21 change: +0.36

Stop Loss: 96.45
Target(s): 104.50, 107.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
07/25 update: We just can't seem to get an entry point in JOYG. The plan was to buy calls if both the S&P 500 and JOYG opened positive this morning. That didn't happen. We're still on the sidelines. JOYG did manage to recoup its morning losses. I am suggesting we try again. Bear in mind this is an aggressive, higher-risk entry point. Plus, the ongoing debt ceiling issue could really start to undermine investor confidence. If you are going to trade I am suggesting you trade very small (position size) to limit your risk.

Tomorrow, if both JOYG and the S&P 500 open positive, we'll buy calls with a stop loss at $96.45.

Open SMALL positions if JOYG and S&P 500 are positive tomorrow morning.

- Suggested Positions - Buy the Aug $100 call (JOYG1120H100)

07/25 try again.
07/23 Open positions if JOYG and market are positive on Monday morning
07/21 New entry point. Buy calls, small positions only, if the stock and the S&P 500 are positive at the open.
07/21 New stop loss @ 96.45. New targets are $104.50 and $107.50
...please see earlier updates for previous notes here...

Entry on July 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: 40.52 change: +0.12

Stop Loss: 38.90
Target(s): 44.00
Current Option Gain/Loss: - 9.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
07/25 update: Once again traders bought the dip in NUS near round-number support at $40 and short-term technical support at the simple 10-dma. This is encouraging and the stock outperformed the market today by closing in positive territory. I am still concerned NUS looks overbought. I am not suggesting new positions at this time. More conservative traders may want to use a stop loss closer to $39.40 or even $39.60 instead.

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 -

Long AUG $40 call (NUS1120H40) Entry @ $2.10
07/23 new stop loss @ 38.90
07/20 Entered at $40.80
07/19 buy calls tomorrow if NUS and S&P 500 are both up at the open.
07/19 new stop loss @ 38.40
07/18 Our play has not been opened yet. We're going to wait 24 hours and reconsider.

Entry on July 20 at $40.80
Earnings Date 08/02/11 (confirmed)
Average Daily Volume = 700 thousand
Listed on July 16, 2011


Open Text Corp. - OTEX - close: 68.86 change: -0.62

Stop Loss: 67.45
Target(s): 74.50
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Comments:
07/25 update: Our conditions to open positions were not met. Neither OTEX or the S&P 500 opened higher today. Shares of OTEX did find support at the bottom of its current trading range near $68.00. Aggressive traders may want to go ahead and buy the intraday bounce today. I am suggesting we try again and launch positions if both OTEX and the S&P 500 open in positive territory tomorrow morning. More conservative traders will want to strongly consider waiting for a new breakout past $70.00 (maybe use a trigger at $70.25 to open positions).

A breakout over $70.00 could produce another short squeeze. The most recent data listed short interest at more than 10% of the 55.9 million-share float. We do not want to hold over the August earnings report.

If both S&P 500 and OTEX open positive tomorrow morning

- Suggested Positions -

buy the AUG $70 call (OTEX1120H70)

Entry on July xx at $ xx.xx
Earnings Date 08/10/11 (unconfirmed)
Average Daily Volume = 300 thousand
Listed on July 23, 2011


Potash Corp. - POT - close: 61.82 change: +0.18

Stop Loss: 59.60
Target(s): 63.75, 68.00
Current Option Gain/Loss: +33.3%
Time Frame: exit prior to July 28th
New Positions: see below

Comments:
07/25 update: POT opened lower like most of the market did this morning but shares quickly surged to a new multi-month high above $62.00. Unfortunately the rally faded. The pull back from its intraday highs now looks like a potential short-term top. We only have a few days left so readers may want to go ahead and exit early now. Please note our new stop loss at $59.60.

POT is due to report earnings on Thursday morning (July 28th). We will plan to exit on Wednesday at the closing bell assuming shares have not hit our target or stop before then. I am not suggesting new bullish positions at this time.

- Suggested Positions -

Long AUG $60 call (POT1120H60) entry @ $2.40
07/25 new stop loss @ 59.60
07/23 New stop loss @ 58.95
07/23 Time is running out. Prepare to exit on Wednesday
07/19 Play is opened. POT gapped open at $59.98
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 $59.98
Earnings Date 07/28/11 (confirmed)
Average Daily Volume = 7.4 million
Listed on July 16, 2011


PowerShares QQQ - QQQ - close: 59.48 change: -0.12

Stop Loss: 57.75
Target(s): 62.50, 64.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
07/25 update: Investors are growing worried about the lack of a deal in Washington over the debt ceiling extension. That prompted stocks to open lower this morning. The QQQs were no exception. Traders bought the dip near $59.00 this morning. Aggressive traders may want to go ahead and launch positions now since our condition to initiate plays was not met. I am suggesting we try again. Buy calls if the QQQ opens in positive territory tomorrow. FYI: The Point & Figure chart for QQQ is bullish with a $89 target.

Trigger @ if the QQQs open positive in the morning.

- Suggested Positions -

buy the AUG $60 call (QQQ1120H60)

- or -

buy the AUG $62 call (QQQ1120H62)

Entry on July xx at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 61.7 million
Listed on July 23, 2011


Teradata Corp. - TDC - close: 56.95 change: -0.32

Stop Loss: 56.25
Target(s): 62.00
Current Option Gain/Loss: -38.7%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
07/25 update: Cautious traders may want to exit early immediately. On the positive side TDC has bounced from support near $56.50 for the fourth time in about a week. Yet the bounces keep getting smaller so the stock is creating a trend of lower highs. If the 50-dma was not such a significant level of support for this stock I would exit now. We will raise our stop loss to $56.25. I am not suggesting new positions at this time. FYI: The Point & Figure chart for TDC is bullish with a $79 target.

- Suggested Positions -

Long AUG $60 call (TDC1120H60) Entry @ $1.55

07/25 New stop loss @ 56.25
07/21 TDC is underperforming. Cautious traders may want to exit
07/19 new stop @ 55.40
07/19 Trade is open. TDC gaps up at $57.69.

Entry on July 19 at $57.69
Earnings Date 08/04/11 (confirmed)
Average Daily Volume = 1.5 million
Listed on July 18, 2011


PUT Play Updates

FactSet Research - FDS - close: 95.61 change: -0.49

Stop Loss: 100.25
Target(s): 90.50, 86.00
Current Option Gain/Loss: -47.1% & -39.5%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
07/25 update: FDS followed the market and opened lower this morning. Yet the dip failed to breakdown past last Wednesday's or Thursday's lows. Thus FDS is forming a $94.75-96.50 trading range. Cautious traders could narrow their stop loss based on the $96.50 level. I'd rather keep our stop above technical resistance at the 200-dma. I am not suggesting new positions at this time.

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