Editor's Note:

Stocks continued to drift higher on Wednesday with small caps outperforming their big cap rivals.

Our IBB and WTW trades were triggered today.

Current Portfolio:


CALL Play Updates

Costco Wholesale - COST - close: 91.32 change: -0.37

Stop Loss: 89.90
Target(s): 99.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
06/27/12 update: COST spiked to $92.21 this morning and then faded lower the rest of the day. Shares continue to hold short-term support at the rising 10-dma. I don't see any changes from my prior comments.

I am suggesting we launch small bullish positions if COST can trade at $92.50 or higher. If triggered we'll start with a stop loss at $89.90. Our target is $99.00. FYI: The Point & Figure chart for COST is bullish with a $116 target.

Trigger @ 92.50

- Suggested *Small* Positions -

buy the Jul $92.50 call (COST1221G92.5)

- or -

Buy the Aug $95 call (COST1218H95)

Entry on June xx at $ xx.xx
Earnings Date 10/11/12 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on June 26, 2012


iShares Biotech - IBB - close: 129.98 change: +1.91

Stop Loss: 124.90
Target(s): 134.85
Current Option Gain/Loss:Jul$130c: + 0.0% & Sep135c: - 5.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/27/12 update: Biotech continues to show strength. The IBB rallied to new highs and is challenging the $130 level. Our trade was opened at $129.25 this morning.

Our multi-week target is $134.85. More aggressive traders could aim higher. Readers may want to keep their position size small.

- Suggested Positions -

Long Jul $130 call (IBB1221G130) Entry $2.30

- or -

Long Sep $135 call (IBB1222I135) Entry $2.60

06/27/12 triggered at $129.25

Entry on June 27 at $129.25
Earnings Date --/--/--
Average Daily Volume = 576 thousand
Listed on June 23, 2012


U.S. Oil ETF - USO - close: 30.20 change: +0.39

Stop Loss: 28.49
Target(s): 33.00
Current Option Gain/Loss: Jul$30c: + 7.4% & Aug30c: +11.7%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/27/12 update: The USO hit new highs for the week and closed above the $30.00 mark again. I would still consider new positions now at current levels.

Earlier Comments:
Make no mistake, this is an aggressive trade since we're trying to call a short-term bottom in oil prices here. The commodity could definitely see some strength as we get closer to the EU oil embargo against Iran, which is scheduled to start on July 1st.

- Suggested Positions -

Long Jul $30 call (USO1221G30) Entry $0.94

- or -

Long Aug $30 call (USO1218H30) Entry $1.36

Entry on June 22 at $29.57
Earnings Date --/--/--
Average Daily Volume = 8.6 million
Listed on June 21, 2012


Whole Foods Market, Inc. - WFM - close: 94.99 change: -1.78

Stop Loss: 93.25
Target(s): 95.00 & 98.50
Current Option Gain/Loss: Jul $92.50c: +66.6% & Aug $95c: +32.9%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/27/12 update: WFM's trading was disappointing today. The stock completely erased yesterday's gains. Shares look headed for short-term support near $94.00 again. I am not suggesting new positions at this time.

- Suggested Positions -

Long Jul $92.50 call (WFM1221G92.5) Entry $3.30

- or -

Long Aug $95 call (WFM1218H95) Entry $4.40

06/23/12 Readers will want to seriously consider taking profits and exiting right now
06/18/12 new stop loss @ 93.25
06/15/12 first target hit at $95.00, options values at:
Jul $92.50 call @ $4.50 (+36.3%)
Aug $95.00 call @ $5.05 (+14.7%)
06/15/12 triggered at $92.05

Entry on June 15 at $92.05
Earnings Date 07/25/12 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on June 12, 2012


PUT Play Updates

Cummins Inc. - CMI - close: 90.63 change: +0.98

Stop Loss: 92.55
Target(s): 82.50
Current Option Gain/Loss: -21.4%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/27/12 update: CMI is not seeing any follow through on its recent breakdown under $90.00. Instead the stock is back above this new resistance level. Shares look poised to bounce toward the next level of short-term resistance at $92.00. I am not suggesting new positions at this time. FYI: The Point & Figure chart for CMI is bearish with an $82 target.

- Suggested Positions -

Long Jul $87.50 PUT (CMI1221S87.5) Entry $2.80

06/25/12 triggered on the gap down at $89.06 (trigger was 89.35)

Entry on June 25 at $89.06
Earnings Date 07/31/12 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on June 23, 2012


Deckers Outdoor Corp. - DECK - close: 44.20 change: -0.16

Stop Loss: 50.05
Target(s): 42.00
Current Option Gain/Loss: Jul45p: +74.0% & Aug45P: +34.4%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/27/12 update: Today looked a lot like yesterday for DECK. Shares drifted sideways in a narrow range. Looks like traders are in a wait and see mode here.

Readers may want to take profits now. I'm not suggesting new positions at this time.

Earlier Comments:
This is an aggressive trade because so many investors are already short this stock. The most recent data listed short interest at 26% of the small 36.7 million share float. That does raise the risk of a short squeeze, although DECK hasn't seen a squeeze in a while. FYI: The Point & Figure chart for DECK is bearish with a $34 target.

- Suggested (SMALL) Positions -

Long Jul $45 PUT (DECK1221S45) Entry $1.35

- or -

Long Aug $45 PUT (DECK1218T45) Entry $2.90

06/25/12 readers may want to take profits early now.

Entry on June 21 at $47.31
Earnings Date 07/26/12 (unconfirmed)
Average Daily Volume = 1.45 million
Listed on June 20, 2012


Joy Global, Inc. - JOY - close: 51.91 change: +0.00

Stop Loss: 55.05
Target(s): 47.50
Current Option Gain/Loss: - 2.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/27/12 update: JOY also produced a quiet session with the stock closing unchanged on the day. Readers might want to look for a new failed rally under short-term resistance at $54.00 before initiating positions.

We do want to keep our position size small because JOY can be a volatile stock at times. It is possible that the $50.00 level could act as round-number, psychological support but we are aiming for a drop to $47.50.

- Suggested *SMALL* Positions -

Long Jul $50 PUT (JOY1221S50) Entry $1.60

Entry on June 26 at $52.23
Earnings Date 08/29/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on June 25, 2012


Weight Watchers Intl - WTW - close: 49.54 change: -1.96

Stop Loss: 52.25
Target(s): 45.50, 42.00
Current Option Gain/Loss: Jul$50P + 0.0% & Aug47.50P + 2.0%
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
06/27/12 update: Our new trade on WTW is open. The stock tried to bounce this morning but immediately failed at the $52.00 level. Shares proceeded to breakdown under round-number support at $50.00 and hit our trigger at $49.75.

Earlier Comments:
We do want to keep our position size small since the most recent data listed short interest at 10% of the very small 26.6 million share float. I am listing two targets, one at $45.50, the other at $42.00.

- Suggested Positions -

Long Jul $50 PUT (WTW1221S50) Entry $1.55

- or -

Long Aug $47.50 PUT (WTW1218T47.5) Entry $2.45

06/27/12 triggered @ 49.75

Entry on June 27 at $49.75
Earnings Date 08/02/12 (unconfirmed)
Average Daily Volume = 667 thousand
Listed on June 26, 2012