Editor's Note:

Stocks continued to rise on Monday following Friday's short squeeze higher.

We are removing MOS as a candidate. I've adjusted the trigger on QCOM and FB. We've also made some minor adjustments to our stops.

Current Portfolio:


CALL Play Updates

BRCM - Broadcom - close: 33.90 change: -0.11

Stop Loss: 32.45
Target(s): 38.50
Time Frame: 4-6 weeks
New Positions: Yes, see below

Comments:
08/06/12 update: It was a very quiet day for shares of BRCM. The stock hovered just under the $34.00 level most of the session. I don't see any changes from our prior comments.

The plan is to wait for shares of BRCM to hit our trigger to buy calls at $34.75. We'll buy the November $36 call.

Please note I am adjusting the stop loss to $32.45.

Trigger: Enter only with a BRCM trade at $34.75

- Suggested Positions -

Position: Buy Nov $36.00 Call (BRCM1217K36)

08/06/12 adjust stop loss to $32.45

Entry on UNOPENED xx at $ xx.xx
Average Daily Volume = 10 million
Earnings Oct-23rd
Listed on Aug 4, 2012


Dollar Tree - DLTR - close: 50.99 change: -0.13

Stop Loss: 49.45
Target(s): 54.50
Time Frame: exit prior to earnings on Aug. 16th
New Positions: Yes, see below

Comments:
08/06/12 update: Unfortunately we haven't seen any follow through on Friday's pop in DLTR. Shares seem stuck in the six-week trend of lower highs. Friday's high was $51.53. Readers might want to consider waiting for a rise past $51.55 before launching positions, or nimble traders could buy a bounce near $50.00.

Please note I am adjusting the time frame and stop loss. We do not want to hold over the earnings report on August 16th. I am adjusting our stop loss to $49.45.

- Suggested Positions -

Position: Long Sept $52.50 Call (DLTR1222I52.5) @ $1.90

08/06/12 new stop loss @ 49.45, adjust time frame to exit prior to Aug. 16th earnings report

Entry on Aug 3rd at $ 51.42 (gap open)
Average Daily Volume = 1.5 million
Listed on Aug 2, 2012


Hess Corp. - HES - close: 48.28 change: +0.57

Stop Loss: 45.35
Target(s): 49.85
Time Frame: 3 to 6 weeks
New Positions: see below

Comments:
08/06/12 update: Oil stocks were a little mixed today but HES was showing some relative strength with a +1.1% gain. The stock tagged potential technical resistance at its simple 100-dma this morning and then retreated. Readers may want to wait for a rally past $49.00 before launching new positions.

- Suggested Positions -

Long AUG $47.50 call (HES1218H47.5) Entry $1.05

- or -

Long SEP $47.50 call (HES1222I47.5) Entry $2.02

07/26/12 triggered on gap open higher at $46.65

Entry on July 26 at $46.65
Earnings Date 07/25/12
Average Daily Volume = 4.3 million
Listed on July 25, 2012


Qualcomm - QCOM - close: 60.13 change: -0.11

Stop Loss: 57.75
Target(s): 64.50
Time Frame: 4-6 weeks
New Positions: Yes, see below

Comments:
08/06/12 update: QCOM came close but did not breakout past resistance. Shares have converging resistance near $60.50 with its 100-dma, its 150-dma, and the $60.50 level itself. Over the weekend Jim suggested buying calls on a breakout past $60.50 or on dip at $59.50. Today QCOM actually hit $60.50 but didn't break it. At this point odds favor a dip. We will keep our dip entry at $59.50 but readers might want to consider adjusting their dip entry closer to $59.00 instead.

Trigger: Enter with a QCOM trade at $59.50
-or- a breakout over the 100-day at $60.51.

- Suggested Positions -

Position: Buy Oct $62.50 Call (QCOM1222J62.5)

Entry on UNOPENED xx at $ xx.xx
Average Daily Volume = 1.5 million
Listed on Aug 4, 2012


PUT Play Updates

Akamai Technologies - AKAM - close: 35.82 change: +0.34

Stop Loss: 36.75
Target(s): 32.00
Time Frame: 2-4 weeks
New Positions: Yes, see below

Comments:
08/06/12 update: The bounce in AKAM continued on Monday but bulls had trouble keeping AKAM above resistance near $36.00. Readers may want to wait for a new drop under $35.00 before launching new bearish positions. More conservative traders may want to consider a stop loss closer to $36.25. Our stop is at $36.75.

- Suggested Positions -

Position: Long Sept $34 PUT (AKAM1222U34) @ $1.53

08/02/12 triggered @ $34.85

Entry on Aug 2nd at $ 34.85
Average Daily Volume = 3.0 million
Listed on July 30, 2012


FB - Facebook - close: 21.92 change: +0.83

Stop Loss: 23.25
Target(s): 17.00
Time Frame: 2-4 weeks
New Positions: Yes, see below

Comments:
08/06/12 update: The oversold bounce in FB continued on Monday. Shares never traded in the negative column today. It is worth noting that FB seemed to struggle with the $22.00 level today.

We are adjusting our entry point strategy to buy puts at $20.95.

Earlier Comments:
Facebook has turned into the stock everyone loves to hate. Facebook has 674 million shares outstanding as of Friday. On August 15th another 268 million shares will see their lockup expire and become available for trading. That is 40% additional shares. If you were an investor or employee and you watched your shares decline from $35 to $20 ahead of your lockup expiration you are probably just waiting for an opportunity to sell. Another factor is that taxes are due on the awarded shares regardless of whether they are sold. That means employees have a big tax bill and they have not been able to sell those shares to pay the taxes. That is an additional incentive to pull the trigger on at least part of their position on August 15th.

Facebook has hundreds of detractors and they seem to be racing each other trying to put a lower price target on the stock. Mark Hulbert was on CNBC on Friday with a $13.80 price target based on a bunch of different metrics.

Facebook also has the various lawsuits over the IPO including the valuation and the various claims made about users and revenue in the days leading up to the IPO. There are plenty of clouds and no real catalysts to pump up the stock.

Facebook said expenses grew by 60% in Q2 and they would grow faster in Q3/Q4. That means earnings will decline.

I am recommending a September option with plans to exit (some time) after the August 15th share expiration.

Entry Trigger: buy puts at $20.95

Suggested Positions

Buy Sept $20 PUT (FB1220U20)

08/06/12 adjust entry trigger to $20.95

Entry on Unopened XX at $ XX.XX
Average Daily Volume = 80.0 million
Listed on August 5, 2012


iShares Russell 2000 ETF - IWM - close: 79.22 change: +0.61

Stop Loss: 81.25
Target(s): 75.75
Time Frame: 2-4 weeks
New Positions: Yes, see below

Comments:
08/06/12 update: Friday's short squeeze saw some carry over today. The IWM shot higher this morning but was struggling with resistance midday. I don't see any changes from our earlier comments.

Earlier Comments:
We are reinitiating the IWM put because I think the short squeeze gains are unsustainable. The Russell has the worst chart of the major indexes and has rebounded the least on a relative basis. If we don't get any bullish follow through on Monday then I think we will retest Thursday's lows.

You can read the prior play description HERE

Entry Trigger: buy puts at $78.45

- Suggested Positions -

Buy Oct $78 PUT (IWM1220V78)

Entry on Unopened XX at $ XX.XX
Average Daily Volume = 60.0 million
Listed on August 5, 2012


CLOSED BULLISH PLAYS

Mosaic - MOS - close: 57.34 change: -0.03

Stop Loss: 57.50 (Unopened)
Target(s): 67.00
Time Frame: 4-6 weeks
New Positions: see below

Comments:
08/06/12 update: MOS did not truly participate with the market's rally today. Shares are hovering in the $58-56 level and it could be a while before shares finally breakout past resistance near $60.00. Our plan was to buy calls at $60.25 but we're dropping MOS as a candidate tonight. We'll keep it on our potential watch list if shares rally past $60 down the road.

Trade did not open.

08/06/12 removed from the newsletter. trade did not open.

MOS Chart

Entry on UNOPENED xx at $ xx.xx
Average Daily Volume = 3.0 million
Listed on Aug 1, 2012