Editor's Note:

May was another bullish month for the U.S. stock market but stocks ended on a sour note with a sell-off on Friday afternoon.

Our CRR trade has been triggered.


Current Portfolio:


CALL Play Updates

The Boeing Co. - BA - close: 99.02 change: -1.52

Stop Loss: 98.40
Target(s): 104.50
Current Option Gain/Loss: -33.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: Warning! Danger, Will Robinson! Shares of BA have closed below short-term technical support at its rising 10-dma for the first time in several weeks. The market's Friday afternoon sell-off saw BA lose nearly $1.75. Now the short-term up trend is in jeopardy. Technically BA has created a bearish engulfing candlestick reversal pattern on its weekly chart.

More conservative traders may want to abandon ship immediately. I am not suggesting new positions.

Tonight we are raising the stop loss to $98.40. I am concerned that if the correction in BA continues we could see the stock drop toward the $95.00 level.

*Small Positions* - Suggested Positions -

Long Jun $100 call (BA1322F100) entry $2.55

06/01/13 new stop loss @ 98.40, readers may want to exit immediately

chart:

Entry on May 24 at $100.25
Average Daily Volume = 5.0 million
Listed on May 23 2013


Domino's Pizza - DPZ - close: 59.27 change: -0.52

Stop Loss: 57.75
Target(s): 64.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see below

Comments:
06/01/13: DPZ held up reasonably well on Friday. The stock lost -0.8%, essentially giving back Thursday's gains. I don't see any changes from my earlier comments.

Earlier Comments:
Currently DPZ is hovering just below round-number resistance at the $60.00 level. The high on Tuesday as $60.21. I am suggesting a trigger to buy calls at $60.30. If triggered our target is $64.75. However, I am suggesting that investors keep their position size small.

FYI: DPZ will begin trading ex-dividend on June 12th. The cash dividend should be about 20 cents.

Trigger @ 60.30 *Small Positions*

- Suggested Positions -

buy the Jul $60 call (DPZ1320G60)

chart:

Entry on May -- at $---.--
Average Daily Volume = 733 thousand
Listed on May 30, 2013


OpenTable, Inc. - OPEN - close: 66.70 change: -0.88

Stop Loss: 64.90
Target(s): 74.00
Current Option Gain/Loss: -45.6%
Time Frame: 4 weeks
New Positions: see below

Comments:
06/01/13: OPEN also gave back Thursday's gains with a decline on Friday. Yet the -1.3% pullback left shares sitting on short-term technical support at its rising 10-dma. This moving average has been consistent support for weeks.

Currently our stop loss is at $64.90. More conservative traders may want to raise their stop closer to the $65.50 mark instead. I am not suggesting new positions.

Earlier Comments:
If the rally continues OPEN could see another short squeeze. The most recent data listed short interest at 24% of the small 21 million-share float.

NOTE: Keep in mind that OPEN is a volatile stock. Traders may want to limit their position size.

- Suggested Positions -

Long Jun $70 call (OPEN1322F70) entry $2.30

05/28/13 trade opened on gap higher at $68.26

chart:

Entry on May 28 at $68.26
Average Daily Volume = 823 thousand
Listed on May 25 2013


Panera Bread Co. - PNRA - close: 191.83 change: -1.99

Stop Loss: 199.00
Target(s): 187.25
Current Option Gain/Loss: +30.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: Shares of PNRA gapped open lower on Friday morning in reaction to an analyst downgrade to "neutral". Traders bought the dip at PNRA's rising 10-dma but shares didn't rebound very far. The stock closed with a -1.0% decline.

I am not suggesting new positions. Cautious traders may want to raise their stop closer to the $190.00 level.

FYI: The Point & Figure chart for PNRA is bullish with a $234 target.

*Small Positions* - Suggested Positions -

Long Jun $190 call (PNRA1322F190) entry $3.60

05/28/13 new stop loss @ 187.25

chart:

Entry on May 20 at $187.00
Average Daily Volume = 558 thousand
Listed on May 18 2013


Western Digital - WDC - close: 63.32 change: -0.47

Stop Loss: 61.45
Target(s): 64.75
Current Option Gain/Loss: +54.9%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: Hmm... that's three days in a row that WDC has struggled with resistance near $64.00. We should be concerned with the slowing momentum. After a six-week rally WDC may be due for a pullback.

The 10-dma has risen to $61.93. I am raising our stop loss to $61.45. More conservative traders may want to just exit now to lock in gains.

*small positions* - Suggested Positions -

Long Jun $60 call (WDC1322F60) entry $2.55

06/01/13 new stop loss @ 61.45, readers may want to exit now
05/29/13 more conservative traders may want to lock in gains now.
05/28/13 new stop loss @ 59.65

chart:

Entry on May 21 at $60.65
Average Daily Volume = 3.3 million
Listed on May 18 2013


PUT Play Updates

AthenaHealth, Inc. - ATHN - close: 84.55 change: -0.00

Stop Loss: 85.10
Target(s): 76.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
06/01/13: The market produced a late-day sell-off on Friday and yet shares of ATHN manage to close unchanged. You could call that a show of relative strength. Although it's worth noting that the stock did fail at its 20-dma again.

We are leaving our strategy unchanged. I am suggesting a trigger to buy puts at $82.00. If triggered our target is $76.00. Please note that I am also suggesting traders keep their position size small to limit risk. The most recent data listed short interest at 26% of the small 36.1 million share float. That does raise the risk of a short squeeze. FYI: The Point & Figure chart for ATHN is bearish with a $67 target.

Trigger @ 82.00 *Small Positions*

- Suggested Positions -

buy the Jun $80 PUT (ATHN1322R80)

chart:

Entry on May -- at $---.--
Average Daily Volume = 495 thousand
Listed on May 28 2013


Caterpillar Inc. - CAT - close: 85.80 change: -0.61

Stop Loss: 87.25
Target(s): 80.50
Current Option Gain/Loss: -13.1%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: CAT tried to rally again on Friday but the stock rolled over under its 10-dma for the second time in as many days. I would consider new bearish put positions now or you could wait for a drop under the Wednesday low ($85.33).

Earlier Comments:
More conservative traders might want to wait for a drop below $85.00 as an alternative entry point since it's possible that $85.00 could be round-number support.

- Suggested Positions -

Long Jun $85 PUT (CAT1322R85) entry $1.45

05/29/13 adjust stop loss to $87.25, just above the 10-dma

chart:

Entry on May 29 at $85.50
Average Daily Volume = 7.0 million
Listed on May 25 2013


Concur Technologies - CNQR - close: 80.73 change: +0.16

Stop Loss: 82.25
Target(s): 76.50
Current Option Gain/Loss: -29.7%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: CNQR is still trying to bounce after Wednesday's big drop. Shares made it up to $81.74 on Friday, intraday, before rolling over. I would consider new positions now or traders could look for a drop below $79.45 as an alternative entry point to buy puts.

- Suggested Positions -

Long Jun $80 PUT (CNQR1322R80) entry $2.35

chart:

Entry on May 29 at $80.50
Average Daily Volume = 489 thousand
Listed on May 25 2013


CARBO Ceramics - CRR - close: 65.90 change: -2.80

Stop Loss: 70.05
Target(s): 62.00
Current Option Gain/Loss: +28.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: Our new trade on CRR is off to a good start with a -4.0% plunge on Friday. Shares were consistently weak all day long and broke down out of its trading range to new lows for the year. Our trigger to buy puts was hit at $67.65. This drop could signal a move toward the October 2012 lows.

Earlier Comments:
If triggered we do want to keep our position size small. The most recent data listed short interest at 33% of the very small 19.8 million share float. That does raise the risk of a short squeeze but the last squeeze attempt (May 20th) didn't last very long.

*small positions* - Suggested Positions -

Long Jun $65 PUT (CRR1322R65) entry $1.25

chart:

Entry on May 31 at $67.65-
Average Daily Volume = 266 thousand
Listed on May 30, 2013


Facebook, Inc. - FB - close: 24.35 change: -0.20

Stop Loss: 25.10
Target(s): 21.50
Current Option Gain/Loss: + 4.5%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: FB didn't see much follow through on its rally and bullish reversal from Thursday. The stock failed near $25.00, which is where we expected FB to find resistance.

- Suggested Positions -

Long Jun $25 PUT (FB1322R25) entry $1.10

05/31/13 no follow through on the bullish reversal from Thursday
05/30/13 new stop loss @ 25.10, FB was upgraded by two analysts today. The stock has created a technical reversal pattern higher.

chart:

Entry on May 24 at $24.65
Average Daily Volume = 38 million
Listed on May 22 2013


iShares Russell 2000 - IWM - close: 97.80 change: -1.09

Stop Loss: 102.25
Target(s): 95.25
Current Option Gain/Loss: +56.6%
Time Frame: 2 to 3 weeks
New Positions: see below

Comments:
06/01/13: The IWM gapped open lower but rallied back toward $99.00 intraday. The afternoon market sell-off eventually pushed the ETF below $98.00 and the IWM closed on its low for the day. It also closed right on its 20-dma. We remain bearish and most of the short-term technical indicators are also turning bearish.

Our target is only $95.25. More aggressive traders might be tempted to aim lower. We are expecting some support at the $95.00 mark. Readers may want to tighten their stops down toward last week's high ($100.38).

- Suggested Positions -

Long Jun $95 PUT (IWM1322R95) entry $0.60

05/22/13 triggered @ 99.75
05/21/13 added a secondary entry trigger at $98.75
05/18/13 adjust entry trigger to $99.75
adjust the stop loss to $102.25, adjust the exit target to $95.25.

chart:

Entry on May 22 at $99.75
Average Daily Volume = 41.8 million
Listed on May 16 2013


Susser Holdings - SUSS - close: 47.34 change: -0.83

Stop Loss: 50.25
Target(s): 45.25
Current Option Gain/Loss: +15.3%
Time Frame: 3 to 4 weeks
New Positions: see below

Comments:
06/01/13: The sell-off in shares of SUSS continue with a -1.7% drop on Friday. Shares are down three days in a row and SUSS settled right on its simple 100-dma at Friday's close. I would not be surprised to see a little bounce here but the $48.75 area should be short-term resistance. I am adjusting our stop loss down to $50.25.

FYI: The Point & Figure chart for SUSS is bearish with a $41 target.

- Suggested Positions -

Long Jun $50 PUT (SUSS1322R50) entry $2.60

06/01/13 new stop loss @ 50.25

chart:

Entry on May 30 at $48.75
Average Daily Volume = 369 thousand
Listed on May 29 2013