Editor's Note:

All of our bearish trades accelerated lower on Friday as stocks drop on the disappointing jobs data.

Our SI trade was triggered. COF was stopped out. I have removed ADS and PX as candidates.

Current Portfolio:


CALL Play Updates

3M Co. - MMM - close: 88.67 change: -0.72

Stop Loss: 88.45
Target(s): 94.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
05/05 update: MMM closed under its simple 10-dma on Friday but shares remain inside the $88-90 trading range. Currently we are waiting for a bullish breakout over resistance near $90.00. I am suggesting a trigger to buy calls at $90.25 with a stop at $88.45. Our multi-week target is $94.50.

Trigger @ 90.25

- Suggested Positions -

buy the May $90 call (MMM1219E90)

- or -

buy the Jun $90 call (MMM1216F90)

chart:

Entry on April xx at $ xx.xx
Earnings Date 07/24/12 (unconfirmed)
Average Daily Volume = 2.0 million
Listed on April 26, 2012


NetEase, Inc. - NTES - close: 59.78 change: -0.13

Stop Loss: 58.90
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: exit prior to the May 16th earnings report
New Positions: Yes, see below

Comments:
05/05 update: NTES is still holding up reasonably well. The stock continues to hover near the $60.00 level. Lack of any profit taking on Friday is a positive sign. My concern is that we're running out of time. NTES is due to report earnings on May 16th and we do not want to hold over the report.

I am adjusting our strategy. We will leave our trigger to buy calls at $60.75 but we'll move our stop loss up to $58.95. I am suggesting we keep our position size small to limit risk.

Trigger @ $60.75

- Suggested Positions -

buy the May $60 call (NTES1219E60)

- or -

buy the May $65 call (NTES1219E65)

05/05/12 new stop loss at $58.90, if triggered. Trade still not open yet. Do not hold over the May 16th earnings report

chart:

Entry on April xx at $ xx.xx
Earnings Date 05/16/12 (confirmed)
Average Daily Volume = 588 thousand
Listed on April 28, 2012


PriceSmart Inc. - PSMT - close: 81.46 change: -1.89

Stop Loss: 78.85
Target(s): 85.75
Current Option Gain/Loss: -16.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/05 update: PSMT was not immune to the market's decline on Friday. Shares tagged a new high at $84.32 and then reversed to close on its rising 10-dma. If the market continues to sink I would expect PSMT to test the $80.00 level soon. Nimble traders could try and buy calls on a bounce off the $80.00 mark. While cautious investors may want to inch their stop loss closer to the $80 level.

Earlier Comments:
The daily chart has an inverse head-and-shoulders pattern that is forecasting an $88 target. Our exit target is $84.75. More conservative traders may want to consider a tighter stop loss. FYI: The Point & Figure chart for PSMT is bullish with a $95 target.

- Suggested Positions -

Long May $80 call (PSMT1219E80) Entry $3.30

05/03/12 new stop loss @ 78.85, adjust exit to $85.75
04/28/12 new stop loss @ 77.65
04/24/12 PSMT is underperforming with a -4.3% reversal lower.
04/23/12 triggered at $80.75

chart:

Entry on April 23 at $80.75
Earnings Date 07/05/12 (unconfirmed)
Average Daily Volume = 313 thousand
Listed on April 21, 2012


United Natural Foods - UNFI - close: 50.25 change: -0.05

Stop Loss: 48.25
Target(s): 54.50
Current Option Gain/Loss: - 5.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/05 update: UNFI held up pretty well on Friday. There was a little volatility on Friday morning but shares only lost 5 cents by the closing bell. At this point readers may want to wait for a new relative high over $50.75 before considering new bullish positions.

FYI: The Point & Figure chart for UNFI is bullish with a long-term $82 target.

- Suggested Positions -

Long May $50 call (UNFI1219E50) Entry $0.95

chart:

Entry on May 03 at $49.90
Earnings Date 05/31/12 (unconfirmed)
Average Daily Volume = 250 thousand
Listed on May 02, 2012


PUT Play Updates

Rockwell Collins - COL - close: 53.47 change: -1.12

Stop Loss: 55.25
Target(s): 51.50
Current Option Gain/Loss: May $55p: +44.0% & Jun$55p: +29.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/05 update: The breakdown in COF was accelerating on Friday. Shares lost -2.0% and closed on their lows for the session, which doesn't bode well for Monday. I do see potential support near $53.00, which dates back to mid December 2011. I would not be surprised to see a little bounce there. I am lowering our stop loss to $55.25. Our exit target remains $51.50.

- Suggested Positions -

Long May $55 PUT (COL1219Q55) Entry $1.25

- or -

Long Jun $55 PUT (COL1216R55) Entry $1.85

05/05/12 new stop loss @ 55.25
05/03/12 triggered at $54.75

chart:

Entry on May 03 at $54.75
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on April 25, 2012


Helmerich & Payne Inc. - HP - close: 47.47 change: -1.81

Stop Loss: 50.55
Target(s): 45.25
Current Option Gain/Loss: May50p: +20.0% & Jun45p: +25.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/05 update: HP gapped open lower on Friday morning. That puts our entry point at $48.57. Shares fell to $46.92 intraday (-4.7%) before trimming its losses. HP did underperform with a -3.6% loss on the session. I am lowering our stop loss down to $50.55.

- Suggested Positions -

Long May $50 PUT (HP1219Q50) Entry $2.50

- or -

Long Jun $45 PUT (HP1216R45) Entry $1.20

05/05/12 new stop loss @ 50.55
05/04/12 HP gapped down at $48.57

chart:

Entry on May 04 at $48.57
Earnings Date 07/27/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on May 03, 2012


Jos. A Bank Clothiers - JOSB - close: 47.40 change: -0.55

Stop Loss: 49.25
Target(s): 45.25
Current Option Gain/Loss: May50p: -23.3% or May$45p: -61.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/05 update: JOSB appears to be rolling over after producing a bear-flag pattern over the last several days. I would use Friday's decline as a new bearish entry point to buy puts. We will adjust our stop loss down to $49.25.

Earlier Comments:
We want to limit our position size because JOSB has an elevated amount of short interest. The most recent data listed short interest at 18.7% of the very small 27.5 million share float and this raises the risk for a short squeeze. Our short-term target is $45.25. More aggressive traders may want to aim for the $42-41 area instead.

(small positions)

Long May $50 PUT (JOSB1219Q50) Entry $3.00

- or -

Long May $45 PUT (JOSB1219Q45) Entry $0.65

05/05/12 new stop loss @ 49.25

chart:

Entry on April 23 at $47.50
Earnings Date 05/30/12 (unconfirmed)
Average Daily Volume = 596 thousand
Listed on April 21, 2012


Joy Global, Inc. - JOY - close: 66.52 change: -2.07

Stop Loss: 70.25
Target(s): 65.25
Current Option Gain/Loss: + 70.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/05 update: JOY is down four dollars in the last two days. The stock has broken key support at the $70.00 level. Right now our exit target is $65.25. More aggressive traders may want to aim for the $62-60 zone instead. I am lowering our stop loss to $70.25.

Earlier Comments:
The plan was to limit our risk by keeping our position size small. I have to warn you that JOY can be a volatile stock. Adding to the volatility has been the occasional rumor that JOY might be a takeover target.

(small positions)- Suggested Positions -

Long May $70 PUT (JOY1219Q70) Entry $2.50

05/05/12 new stop loss @ 70.25.
05/02/12 triggered at $69.75

chart:

Entry on May 02 at $69.75
Earnings Date 05/31/12 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on April 25, 2012


Siemens AG - SI - close: 88.05 change: -2.41

Stop Loss: 91.55
Target(s): 86.00
Current Option Gain/Loss: +33.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/05 update: Our SI play has been triggered. Shares actually gapped open lower at $89.63, which was under our trigger at $89.75 . There was a brief bounce back to $90.00 and then SI plunged to a -2.6% decline on the session. This breakdown under support at $90.00 is bearish and should signal a drop toward its 2011 lows. Our exit target is $86.00 but readers might want to aim even lower.

Earlier Comments:
The plan was to keep our position size small to limit our risk. FYI: The Point & Figure chart for SI is bearish with a $74 target.

(small positions) - Suggested Positions -

Long May $90 PUT (SI1219Q90) Entry $2.06

05/04/12 SI gapped open lower at $89.63, under our entry trigger of $89.75.

chart:

Entry on May 04 at $89.63
Earnings Date 04/25/12
Average Daily Volume = 839 thousand
Listed on May 02, 2012


Ulta Salon - ULTA - close: 87.49 change: -3.36

Stop Loss: 92.15
Target(s): 82.50
Current Option Gain/Loss: -22.2%
Time Frame: up to May option expiration
New Positions: see below

Comments:
05/05 update: Friday was a good day for ULTA bears. The stock fell back under the $90 level, under its 50-dma, and closed on its lows for the session with a -3.6% drop. Shares look poised to breakdown from its recent two-week consolidation (which looks like a bear-flag pattern). I would consider new positions now.

- Suggested Positions -

Long May $85 PUT (ULTA1219Q85) Entry $1.35

05/02/12 Readers may want to exit early right now. ULTA is not cooperating. I am adjusting our stop loss to $92.15.

chart:

Entry on May 01 at $87.95
Earnings Date 06/07/12 (unconfirmed)
Average Daily Volume = 651 thousand
Listed on April 30, 2012


CLOSED BULLISH PLAYS

Alliance Data Sys. - ADS - close: 126.41 change: -1.89

Stop Loss: 126.75
Target(s): 137.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/05 update: I am removing ADS from the newsletter. Shares broke down under support near $130. It is definitely possible that shares will bounce near their rising 40 or 50-dma but it is unlikely that shares will hit our trigger to buy calls at $130.75 any time soon.

Trigger @ $130.75

- Suggested Positions -

Trade did not open.

05/05/12 removed from the newsletter. trade did not open.

chart:

Entry on April xx at $ xx.xx
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 700 thousand
Listed on April 28, 2012


Capital One Financial - COF - close: 54.52 change: -1.04

Stop Loss: 54.25
Target(s): 59.00
Current Option Gain/Loss: May55c: -46.4% & Jun57.5c: -29.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/05 update: The stock market's widespread decline was too much for shares of COF. Shares fell to $53.82 intraday, breaking down through support and one of its trend lines of higher lows. Our stop loss was hit at $54.25.

- Suggested Positions -

May $55 call (COF1219E55) Entry $1.40 exit $0.75 (-46.4%)

- or -

Jun $57.50 call (COF1216F57.5) Entry $1.07 exit $0.75 (-29.9%)

05/04/12 stopped out at $54.25
05/03/12 new stop loss @ 54.25
04/26/12 triggered at $55.25

chart:

Entry on April 26 at $55.25
Earnings Date 07/11/12 (unconfirmed)
Average Daily Volume = 4.8 million
Listed on April 25, 2012


Praxair Inc. - PX - close: 114.72 change: -1.46

Stop Loss: 113.90
Target(s): 124.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/05 update: I am removing PX from the newsletter. Our trade has not opened. Shares broke down from their $115-117 trading range. It's unlikely that PX will hit our trigger to buy calls at $117.25 soon. Readers may want to keep an eye on this stock to see if shares will bounce near their rising 50-dma again.

Trigger @ $117.25

- Suggested Positions -

Trade did not open.

05/05/12 removed from the newsletter. trade has not opened.

chart:

Entry on May xx at $ xx.xx
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 01, 2012