Editor's Note:

The market's oversold bounce appears to have run its course. Several stocks have created a bearish engulfing candlestick reversal pattern today.

We did see both FOSL and COH stopped out.

Current Portfolio:


CALL Play Updates

Costco Wholesale - COST - close: 87.91 change: -0.83

Stop Loss: 87.25
Target(s): 91.50
Current Option Gain/Loss: + 7.2%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/11/12 update: The early morning rally in COST reversed and shares closed down -0.9%. More importantly today's move has created a bearish engulfing candlestick reversal pattern. If there is any follow through on this reversal lower COST will probably hit our stop loss at $87.25 pretty quickly. I am not suggesting new positions at this time.

- Suggested Positions -

Long Jul $90 call (COST1221G90) Entry $1.10

06/11/12 COST has produced a bearish reversal candlestick pattern
06/09/12 new stop loss @ 87.25
06/06/12 new stop loss @ 86.25
06/06/12 triggered at $87.25

Entry on June 06 at $87.25
Earnings Date 10/03/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on June 04, 2012


Dollar Tree, Inc. - DLTR - close: 105.73 change: -0.99

Stop Loss: 103.45
Target(s): 112.50
Current Option Gain/Loss: -26.1%
Time Frame: exit prior to the stock split
New Positions: see below

Comments:
06/11/12 update: The plan was to only buy calls if both DLTR and the S&P 500 index opened positive. That entry condition was met. DLTR actually gapped higher at $107.42 before fading lower and closing with a -0.9% decline. More conservative traders might want to inch up their stop loss closer to $105.00. We are leaving ours at $103.45 for now. I am not suggesting new positions at this time.

- Suggested Positions -

Long Jul $110 call (DLTR1221G110) Entry $2.37

06/11/12 trade opened with DLTR gapping higher at $107.42

Entry on June 11 at $107.42
Earnings Date 08/16/12 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on June 09, 2012


Monster Beverage - MNST - close: 74.79 change: -1.31

Stop Loss: 73.25
Target(s): 79.50
Current Option Gain/Loss: + 8.8%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/11/12 update: Bullish analyst comments on MNST this morning were not enough to save the stock from the market's widespread decline. Shares opened higher and then plunged to a -1.7% decline. I would not be surprised to see a dip toward the 10-dma near $73.50. We are leaving our stop at $73.25 for now.

- Suggested Positions -

Long Jul $80 call (MNST1221G80) Entry $1.70

06/09/12 new stop loss @ 73.25
06/06/12 new stop loss @ 70.75
06/06/12 triggered at $74.25

Entry on June 06 at $74.25
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on June 04, 2012


Ross Stores Inc. - ROST - close: 63.76 change: -0.74

Stop Loss: 62.45
Target(s): 68.50
Current Option Gain/Loss: -23.8%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
06/11/12 update: ROST spiked to a new all-time high above $65.00 this morning but the rally didn't last. Shares fell to a -1.1% decline. If ROST breaks down under short-term support near $63.00 we can expect the stock to hit our stop loss at $62.45. I am not suggesting new positions at this time. Today's move looks like a bull trap pattern.

- Suggested Positions -

Long Jul $65 call (ROST1221G65) Entry $2.10

06/07/12 triggered on gap higher at $64.47

Entry on June 07 at $64.47
Earnings Date 08/16/12 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on June 06, 2012


PUT Play Updates

Baxter Intl. - BAX - close: 50.09 change: -0.53

Stop Loss: 51.51
Target(s): 48.00
Current Option Gain/Loss: Jun$50p: -39.3% & Jul50p: - 9.6%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/11/12 update: The rally attempt in BAX this morning failed at short-term resistance near $51.00 for the second time in three days. Shares look poised to breakdown under the $50.00 mark again. More conservative traders may want to adjust their stop so it's closer to $51.00.

- Suggested Positions -

Long Jun $50 PUT (BAX1216R50) Entry $0.66

- or -

Long Jul $50 PUT (BAX1221S50) Entry $1.55

06/02/12 new stop loss @ 51.51
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


NASDAQ OMX Group - NDAQ - close: 21.44 change: -0.68

Stop Loss: 22.55
Target(s): 20.15
Current Option Gain/Loss: - 5.8%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/11/12 update: The bounce in NDAQ has reversed under the top of its bearish channel. Shares underperformed the market with a -3.0% decline. I am not suggesting new positions at this time.

(SMALL Positions) - Suggested Positions -

Long July $21 PUT (NDAQ1221S21) Entry $0.85

Entry on June 06 at $21.95
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 3.8 million
Listed on June 05, 2012


Netflix, Inc. - NFLX - close: 63.00 change: -2.64

Stop Loss: 67.25
Target(s): 60.25
Current Option Gain/Loss: + 3.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/11/12 update: The gap higher in NFLX quickly reversed. shares fell to a -4.0% decline. I don't see any changes from my prior comments.

Earlier Comments:
I am suggesting we keep our position size small because NFLX can be volatile at times and being short the stock is a popular position with short interest at 20% of the 54 million share float. Our first target is $60.25. More aggressive traders could aim a lot lower. The Point & Figure chart is suggesting a $48 target although I suspect the $50 level could be significant support.

(Small positions) - Suggested Positions -

Long Jul $60 PUT (NFLX1221S60) Entry $3.57

Entry on June 08 at $64.37
Earnings Date 07/23/12 (unconfirmed)
Average Daily Volume = 4.9 million
Listed on June 07, 2012


Oil States Intl. - OIS - close: 64.85 change: -1.37

Stop Loss: 68.55
Target(s): 61.50
Current Option Gain/Loss: -17.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/11/12 update: The bounce attempt in OIS failed at technical resistance near the 20-dma. Today's move looks like a bearish reversal on the oversold bounce and readers can use this as a new bearish entry point.

- Suggested Positions -

Long Jul $60 PUT (OIS1221S60) Entry $2.25

Entry on June 08 at $66.04
Earnings Date 07/30/12 (unconfirmed)
Average Daily Volume = 720 thousand
Listed on June 07, 2012


CLOSED BULLISH PLAYS

Fossil, Inc. - FOSL - close: 72.71 change: -3.44

Stop Loss: 72.65
Target(s): 84.50
Current Option Gain/Loss: -34.6%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/11/12 update: Ouch! FOSL really underperformed the market today with a -4.5% decline. Unfortunately the strength this morning met our entry point requirements (both FOSL and S&P 500 positive at the open). FOSL actually gapped higher at $76.96 but quickly reversed lower.

I didn't see any news to account for FOSL's relative weakness today. Today's move looks like a bearish reversal candlestick pattern. The drop was sharp enough it hit our stop loss at $72.65.

Jul $80 call (FOSL1221G80) current ask $2.45 , exit $1.60 (-34.6%)

06/11/12 stopped out at $72.65
06/11/12 trade opened on gap higher at $76.96

chart:

Entry on June 11 at $76.96
Earnings Date 08/07/12 (unconfirmed)
Average Daily Volume = 1.45 million
Listed on June 09, 2012


CLOSED BEARISH PLAYS

Coach Inc. - COH - close: 61.82 change: -2.18

Stop Loss: 64.05
Target(s): 58.50
Current Option Gain/Loss: -45.4%
Time Frame: 3 to 5 weeks
New Positions: see below

Comments:
06/11/12 update: COH underperformed the market today with a -3.4% drop. Unfortunately the stock's strength this morning was enough to stop us out. Shares actually gapped open higher at $64.61, which was above our stop loss at $64.05.

- Suggested Positions -

Jul $60 PUT (COH1221S60) Entry $2.20 exit $1.20 (-45.4%)

06/11/12 stopped out on gap open at $64.61, above our stop
06/07/12 triggered at $62.25

chart:

Entry on June 07 at $62.25
Earnings Date 07/31/12 (unconfirmed)
Average Daily Volume = 3.4 million
Listed on June 06, 2012