Editor's Note:

Traders could not decide what mood they were in today and stocks gyrated for a lousy month-end performance.

EW and SWI were stopped out. BAX and GS were triggered. LLL was closed as planned. We want to exit GD tomorrow at the open.

Current Portfolio:


CALL Play Updates

Bed Bath & Beyond Inc. - BBBY - close: 72.25 change: -0.85

Stop Loss: 71.45
Target(s): 79.00
Current Option Gain/Loss: Jun75c: -39.8% & Jul75c: -13.2%
Time Frame: Exit prior to earnings on June 20th
New Positions: see below

Comments:
05/31 update: BBBY continued to pull back on Thursday with shares losing about -1.1%. The stock traded near prior resistance and what should be support near $72.00. A bounce from here can be used as a new bullish entry point. More conservative traders may want to inch up their stop loss closer to $72.

Our multi-week target is $79.00. FYI: The Point & Figure chart for BBBY is bullish with an $83 target.

Trigger @ 72.75

- Suggested Positions -

Long JUN $75 call (BBBY1216F75) Entry @ $1.03

- or -

Long JUL $75 call (BBBY1221G75) Entry $2.72

05/29/12 new stop loss @ 71.45
05/25/12 triggered at @72.75

Entry on May 25 at $72.75
Earnings Date 06/20/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on May 24, 2012


Cymer Inc. - CYMI - close: 54.17 change: +0.07

Stop Loss: 52.50
Target(s): 57.00
Current Option Gain/Loss: Jun55c: +27.7% & Aug55c: + 8.4%
Time Frame: 4 to 8 weeks
New Positions: see below

Comments:
05/31 update: It was a volatile morning for CYMI with shares ups toward $55 and down under $53 in the first few minutes of trading. Shares spent the next several hours churning sideways before bouncing into positive territory in the last few minutes. I am not suggesting new positions at this time.

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

05/29/12 new stop loss @ 52.50
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


Sourcefire, Inc. - FIRE - close: 55.16 change: -0.56

Stop Loss: 52.75
Target(s): 59.35
Current Option Gain/Loss: Jun55c: - 8.6% Jun60c: -40.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: It was a rough morning for FIRE. Shares dipped toward $56 and its 30-dma before paring its losses. The big afternoon bounce is encouraging but I am not suggesting new positions at this time.

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


The Hain Celestial Group - HAIN - close: 55.49 change: -0.75

Stop Loss: 53.40
Target(s): 59.00
Current Option Gain/Loss: Jun55c: -15.0% Jul60c: - 8.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: HAIN broke down under the $56.00 level today and looks headed for the next level of short-term support near $55.00. More conservative traders might want to adjust their stop loss higher. I am not suggesting new positions at this time.

- Suggested Positions -

Long JUN $55 call (HAIN1216F55) Entry $2.00

- or -

Long JUL $60 call (HAIN1221G60) Entry $1.15*

05/29/12 new stop loss @ 53.40
*entry price is an estimate. looks like a possible bad tick at $5.00 on the morning of 05/25/12
05/25/12 trade opened on gap higher at $55.37, trigger was 55.25

Entry on May 25 at $55.37
Earnings Date 08/23/12 (unconfirmed)
Average Daily Volume = 742 thousand
Listed on May 24, 2012


PUT Play Updates

Baxter Intl. - BAX - close: 50.62 change: -0.74

Stop Loss: 52.51
Target(s): 48.00
Current Option Gain/Loss: Jun$50p: + 9.0% & Jul50p: + 1.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: Our new trade on BAX has been opened. Shares broke down to new relative lows and hit our trigger to buy puts at $50.95.

- Suggested Positions -

Long Jun $50 PUT (BAX1216R50) Entry $0.66

- or -

Long Jul $50 PUT (BAX1221S50) Entry $1.55

05/31/12 triggered at $50.95

Entry on May 31 at $50.95
Earnings Date 07/19/12 (unconfirmed)
Average Daily Volume = 2.4 million
Listed on May 29, 2012


Cummins Inc. - CMI - close: 96.95 change: -2.05

Stop Loss: 102.55
Target(s): 92.50
Current Option Gain/Loss: +32.2%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/31 update: Yesterday CMI lost -2.06. Today shares closed down -2.05. The stock was much lower this morning near $95.43 before paring its losses. The overall trend is down but I want to warn you again that CMI could bounce off its long-term trend line of higher lows. Shares appeared to test that trend line today (see chart).

Readers may want to tighten their stop loss here.

- Suggested Positions -

Long Jun $95 PUT (CMI1216R95) Entry $1.55

05/31/12 CMI seems to be testing the long-term trend line of higher lows
05/29/12 CMI gapped open higher at $100.67

chart:

Entry on May 29 at $100.67
Earnings Date 07/31/12 (unconfirmed)
Average Daily Volume = 2.7 million
Listed on May 26, 2012


General Dynamic - GD - close: 64.01 change: +0.18

Stop Loss: 64.55
Target(s): 61.50
Current Option Gain/Loss: + 3.3%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: GD continues to show too much relative strength. Yesterday we lowered our stop loss down to $64.55. Today the stock traded up to $64.54 this afternoon. The larger trend is still bearish for GD but the stock looks poised to breakout from this trend of lower highs. We are suggesting an early exit at the open tomorrow morning.

- Suggested Positions -

Long Jun $65 PUT (GD1216R65) Entry $1.50

05/31/12 prepare to exit at the open tomorrow
05/30/12 new stop loss @ 64.55
05/29/12 new stop loss @ 65.25
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


Goldman Sachs Group - GS - close: 95.70 change: +1.09

Stop Loss: 97.55
Target(s): 88.50
Current Option Gain/Loss: Jun$90p: -36.1% & Jul90p: -20.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: Shares of GS are not cooperating with us. The stock broke down to new relative lows and fell to $93.70 intraday before bouncing back. GS actually closed up +1.1% to outperform the major indices and most of the financial sector. Our trigger to buy puts was hit at $93.90. Our trade is open but I would not launch new positions here. Wait for a new drop under $95.00 before considering new trades.

Earlier Comments:
I do consider this an aggressive, higher-risk trade. GS can be a volatile stock. Plus, shares are nearing a potential trend line of support dating back to late 2008 (see weekly chart). FYI: The Point & Figure chart for GS is bearish with a $58 target.

Trigger @ 93.90

- Suggested Positions - (Small Positions)

Long Jun $90 PUT (GS1216R90) Entry $1.80

- or -

Long Jul $90 PUT (GS1221S90) Entry $4.25

05/31/12 triggered at $93.90

Entry on May 31 at $93.90
Earnings Date 07/17/12 (unconfirmed)
Average Daily Volume = 5.5 million
Listed on May 30, 2012


Informatica - INFA - close: 41.43 change: -0.39

Stop Loss: 44.25
Target(s): 40.25
Current Option Gain/Loss: +54.1%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: Hmm.... INFA dipped toward its May 21st low near $40.95 and bounced. Shares actually hit $40.75 today. The trend is down but a bounce here could start to look like a bullish double bottom. Readers will want to seriously consider exiting early and taking profits now. I am not suggesting new positions at this time.

- Suggested Positions -

Long Jun $45 PUT (INFA1216R45) Entry $2.40

05/31/12 readers may want to take profits now. option +54%
05/29/12 new stop loss @ 44.25
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


Reliance Steel - RS - close: 47.21 change: -0.91

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:
05/31 update: RS tagged a new relative low at $46.66 this morning before slowly drifting higher. A new drop under $47.00 can be used as a bearish entry point to buy puts.

- 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


CLOSED BULLISH PLAYS

Edwards Lifesciences - EW - close: 85.37 change: -0.40

Stop Loss: 85.75
Target(s): 89.50
Current Option Gain/Loss: Jun85c: -31.2% & Jun$90c: -34.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
05/31 update: The pullback in EW continues. Shares actually gapped open lower at $85.39 and with our stop loss at $85.75 the trade was closed immediately.

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

- Suggested Positions -

Jun $85 call (EW1216F85) Entry $3.20 exit $2.20 (-31.2%)

- or -

Jun $90 call (EW1216F90) Entry $1.15 exit $0.75 (-34.7%)

05/31/12 stopped out on gap down at the open $85.39
05/29/12 new stop loss @ 85.75

chart:

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


SolarWinds, Inc. - SWI - close: 45.86 change: -0.42

Stop Loss: 45.75
Target(s): 52.50
Current Option Gain/Loss: Jun50c: -54.1% & Jul50c: -30.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: The stock market's plunge in the first 30 minutes of trading today pushed SWI toward the $44 area (-4.6% intraday). Our stop loss was hit at $45.75 early this morning.

- Suggested Positions -

Jun $50 call (SWI1216F50) Entry $1.20 exit $0.55 (-54.1%)

- or -

Jul $50 call (SWI1221G50) Entry $2.45 exit $1.70 (-30.6%)

05/31/12 stopped out at $45.75
05/29/12 trade opened.

chart:

Entry on May 29 at $48.20
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on May 26, 2012


CLOSED BEARISH PLAYS

L-3 Communications - LLL - close: 68.19 change: +0.58

Stop Loss: 68.75
Target(s): 62.75
Current Option Gain/Loss: -37.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
05/31 update: Shares of LLL have been showing too much strength in the $67.50-67.00 zone. Last night we decided to exit positions at the opening bell this morning. LLL opened at $67.40 and eventually rallied past resistance near its 200-dma and outperforming the market with a +0.8% gain. We're glad we closed positions early.

- Suggested Positions -

Jul $65 PUT (LLL1221S65) Entry $1.85 exit $1.15 (-37.8%)

05/31/12 exited early at the open. LLL opened at $67.40
05/30/12 prepare to exit at the open tomorrow.
05/23/12 triggered at $66.75

chart:

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