Editor's Note:

Many of our bearish trades did not see any follow through on yesterday's big bounce.

Current Portfolio:


CALL Play Updates

Cymer Inc. - CYMI - close: 53.38 change: -0.05

Stop Loss: 49.95
Target(s): 57.00
Current Option Gain/Loss: Jun55c: + 0.0% & Aug55c: + 1.6%
Time Frame: 4 to 8 weeks
New Positions: Yes, see below

Comments:
05/24 update: CYMI bounced off its afternoon lows and pared its losses to just 5 cents on the session. The overall trend remains bullish. I would still consider new positions here.

Our multi-week target is $57.00. FYI: The Point & Figure chart for CYMI is bullish with a long-term $80 target.

- Suggested Positions -

Long Jun $55 call (CYMI1216F55) Entry $0.90

- or -

Long Aug $55 call (CYMI1218H55) Entry $2.95

05/22/12 triggered at $52.60

Entry on May 22 at $52.60
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 476 thousand
Listed on May 21, 2012


Edwards Lifesciences - EW - close: 87.33 change: +2.28

Stop Loss: 82.45
Target(s): 89.50
Current Option Gain/Loss: Jun85c: +18.7% & Jun$90c: +34.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/24 update: Our new trade on EW is off to a strong start with shares up +2.6% today. This is a new ten-month closing high. Readers might want to already start adjusting their stop loss higher.

FYI: The Point & Figure chart for EW is bullish with a $126 target.

- Suggested Positions -

Long Jun $85 call (EW1216F85) Entry $3.20

- or -

Long Jun $90 call (EW1216F90) Entry $1.15

Entry on May 24 at $85.21
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 1.1 million
Listed on May 23, 2012


Sourcefire, Inc. - FIRE - close: 54.94 change: -0.62

Stop Loss: 52.75
Target(s): 59.35
Current Option Gain/Loss: Jun55c: + 3.4% Jun60c: -16.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/24 update: It was a bit of a volatile session for FIRE. The mid morning high reversed but traders bought the dip this afternoon. The overall trend is unchanged. I would still consider new positions here although readers may want to wait for a new rise past $55.25 before initiating positions.

Earlier Comments:
FIRE could see some short covering. The most recent data listed short interest at 14% of the very small 28 million share float.

- Suggested Positions -

Long Jun $55 call (FIRE1216F55) Entry $2.90

- or -

Long Jun $60 call (FIRE1216F60) Entry $1.50

Entry on May 24 at $55.50
Earnings Date 08/01/12 (unconfirmed)
Average Daily Volume = 857 thousand
Listed on May 23, 2012


Verizon Communication - VZ - close: 41.39 change: +0.11

Stop Loss: 39.95
Target(s): 45.75
Current Option Gain/Loss: Jun$42c: -43.3% & Jul$43c: -53.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/24 update: Thursday was another quiet session for VZ with traders buying the midday dip. Readers may want to wait for a rally past $41.65 before initiating new positions.

More conservative traders may want to use a stop closer to $40.50 instead. Keep in mind that VZ does not move super fast so we'll need to show some patience.

- Suggested Positions -

Long Jun $42 call (VZ1216F42) Entry $0.60

- or -

Long Jul $43 call (VZ1221G43) Entry $0.66

05/18/12 triggered on gap higher at $41.61 (trigger was 41.55)

Entry on May 18 at $41.61
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 13.8 million
Listed on May 17, 2012


PUT Play Updates

ITT Educational Services - ESI - close: 56.38 change: -1.73

Stop Loss: 60.55
Target(s): 51.50
Current Option Gain/Loss: + 5.0%
Time Frame: 4 to 6 weeks
New Positions: see below

Comments:
05/24 update: The initial spike higher this morning quickly failed and ESI fell to new relative lows with a -2.9% decline on the day. We are adjusting our stop loss lower to $60.55.

- Suggested Positions -

Long Jun $55 PUT (ESI1216R55) Entry $2.55

05/24/12 new stop loss @ 60.55

Entry on May 23 at $57.71
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 410 thousand
Listed on May 22, 2012


Fiserv, Inc. - FISV - close: 66.96 change: +0.26

Stop Loss: 68.55
Target(s): 63.50
Current Option Gain/Loss:(May$70p: +12.5%) & Jun65P: - 38.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/24 update: FISV is still trying to bounce past short-term resistance near $67.00. If it does I am expecting a quick surge toward the next level of resistance near $68.00 and its 50-dma. I would wait for a failed rally near $68.00 before considering new positions.

- Suggested Positions -

- previously closed position -
May $70 put (FISV1219Q70) Entry $3.02 exit $3.40 (+12.5%)

- or -

Long Jun $65 put (FISV1216R65) Entry $0.90

05/23/12 Raising our RISK - new stop loss @ 68.55, above the 50-dma
More conservative traders will want to exit now instead.
05/19/12 new stop loss @ 67.25
05/17/12 new stop loss @ 68.25
05/15/12 closed May $70 puts at the open: bid @ 3.40 (+12.5%)
05/14/12 prepare to exit the May $70 puts at the open tomorrow
05/07/12 triggered on gap down at $67.26 (our trigger was 67.40)

Entry on May 07 at $67.26
Earnings Date 05/01/12
Average Daily Volume = 693 thousand
Listed on May 05, 2012


General Dynamic - GD - close: 63.34 change: -1.27

Stop Loss: 66.25
Target(s): 61.50
Current Option Gain/Loss: +50.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/24 update: There was no follow through on yesterday's bounce. GD actually fell to new relative lows this afternoon. Readers might want to inch down their stop loss. I am not suggesting new positions.

- Suggested Positions -

Long Jun $65 PUT (GD1216R65) Entry $1.50

05/23/12 tweaking our stop to $66.25
05/19/12 new stop loss @ 66.05
05/17/12 new stop loss @ 66.55
05/15/12 triggered @ 65.75

Entry on May 15 at $65.75
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on May 09, 2012


Informatica - INFA - close: 42.67 change: -1.05

Stop Loss: 45.25
Target(s): 40.25
Current Option Gain/Loss: +33.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/24 update: The bounce in INFA failed near $44.00 and shares created a bearish engulfing (reversal) pattern today. This is good news if you're bearish. More conservative traders may want to lower their stop closer to the $44 level.

- Suggested Positions -

Long Jun $45 PUT (INFA1216R45) Entry $2.40

05/19/12 readers may want to take profits now
05/16/12 new stop loss @ 45.25
05/14/12 triggered at $44.50

Entry on May 14 at $44.50
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on May 10, 2012


iShares Russell 2000 ETF - IWM - close: 76.64 change: +0.16

Stop Loss: 78.75
Target(s): 72.00-70.00 zone
Current Option Gain/Loss: -15.3%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
05/24 update: The IWM bounced between its 200-dma below and its 10-dma above. You could argue shares are building a neutral pennant formation of lower highs and higher lows. If shares breakout past its 10-dma I am expecting a rise toward $78.00, which should be the next resistance level.

- Suggested Positions -

Long Jul $75 PUT (IWM1221S75) Entry $3.20
05/22/12 triggered at $76.75
05/19/12 adjusted strategy: buy puts on a bounce at $76.75, stop 78.75
05/17/12 temporarily wait on buying puts. We will re-evaluate tomorrow.

Entry on May 22 at $76.75
Earnings Date --/--/--
Average Daily Volume = 53 million
Listed on May 12, 2012


L-3 Communications - LLL - close: 67.68 change: -0.30

Stop Loss: 68.75
Target(s): 62.75
Current Option Gain/Loss: -21.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/24 update: There was no follow through on yesterday afternoon's big bounce, which is good news if you're holding puts. Yet LLL has yet to really breakdown past support in the $67 area. Yesterday's low was $66.46. I'd wait for a new drop under $66.40 before initiating new positions.

- Suggested Positions -

Long Jul $65 PUT (LLL1221S65) Entry $1.85

05/23/12 triggered at $66.75

Entry on May 23 at $66.75
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 856 thousand
Listed on May 19, 2012


Reliance Steel - RS - close: 48.06 change: -1.19

Stop Loss: 50.55
Target(s): 42.50
Current Option Gain/Loss: -20.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/24 update: RS has a similar story with no follow through on yesterday's bounce. The stock is churning between $47 and $50. Readers can use a drop under $47.00 as a new bearish entry point.

FYI: The Point & Figure chart for RS is bearish with a $38 target.

- Suggested Positions -

Long JUN $48 PUT (RS1216R48) Entry $2.45

Entry on May 23 at $47.79
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 534 thousand
Listed on May 22, 2012


Siemens AG - SI - close: 84.34 change: -0.37

Stop Loss: 87.75
Target(s): 80.25
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/24 update: SI delivered a quiet session on Thursday. More conservative traders may want to tighten their stop loss. I am not suggesting new positions at this time. FYI: The Point & Figure chart for SI is bearish with a $74 target.

- Suggested (SMALL) Positions -

Long Jun $80 PUT (SI1216R80) Entry $1.35

05/16/12 SI gapped open higher at $84.94

Entry on May 16 at $84.94
Earnings Date --/--/--
Average Daily Volume = 832 thousand
Listed on May 15, 2012