Editor's Note:

Shares of Sourcefire Inc. (FIRE) exceeded our exit target with the gap open higher this morning.

Lots of changes on our active play list. ADP hit our target on an intraday basis (see closed plays for details). BWA and NBL were closed as planned. TFM and MPC have been removed. We want to exit VC tomorrow morning. New entry strategy on the SPY trade.


Current Portfolio:


CALL Play Updates

Eastman Chemical Co. - EMN - close: 75.81 change: +0.20

Stop Loss: 73.49
Target(s): 79.75
Current Option Gain/Loss: + 0.0%
Time Frame: exit PRIOR to earnings on July 29th
New Positions: see below

Comments:
07/23/13: EMN managed to post another gain on Tuesday. We are running out of time. EMN reports earnings next Monday. We will plan to exit this trade on Friday, July 26 if shares don't hit our target or stop by then.

- Suggested Positions -

Long Aug $75 call (EMN1317H75) entry $2.55

Entry on July 17 at $75.25
Average Daily Volume = 1.3 million
Listed on July 11, 2013


The Hain Celestial Group, Inc. - HAIN - close: 73.85 change: +1.08

Stop Loss: 71.95
Target(s): 79.50
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to August expiration
New Positions: Yes, see below

Comments:
07/23/13: HAIN failed to rally past yesterday's high. The stock slipped to a -0.6% decline today. There is no change from my prior comments.

Earlier Comments:
The most recent data listed short interest at 20% of the relatively small 38.6 million share float. The shorts might be ready to cover again. After a brief, two-day pullback traders are already buying the dip. HAIN outperformed the broader market today. Monday's high was $74.30. I am suggesting a trigger to launch small bullish positions at $74.40. If triggered our target is $79.50.

FYI: The Point & Figure chart for HAIN is bullish with a $99 target.

Trigger @ 74.40

- Suggested Positions -

Buy the Aug $75 call (HAIN1317H75)

Entry on July -- at $---.--
Average Daily Volume = 420 thousand
Listed on July 22, 2013


Harman Intl. Industries - HAR - close: 57.99 change: +0.82

Stop Loss: 55.40
Target(s): 59.50
Current Option Gain/Loss: +36.1%
Time Frame: Exit PRIOR to earnings on August 6th
New Positions: see below

Comments:
07/23/13: HAR extends its gains with a +1.4% rally today. The 10-dma has risen to $55.58. We will raise our stop loss up to $55.40. Please note that I am adjusting our exit target down to $59.50.

Don't forget that we will plan on exiting positions prior to the company's earnings report on August 6th. FYI: The Point & Figure chart for HAR is bullish with a long-term $81 target.

- Suggested Positions -

Long Aug $57.50 call (HAR1317H57.5) entry $1.80*

07/23/13 new stop loss @ 55.40, adjust the exit target to $59.50
*option entry price is an estimate since the option did not trade at the time our play was opened.

Entry on July 18 at $56.10
Average Daily Volume = 785 thousand
Listed on July 13, 2013


Visteon Corp. - VC - close: 65.40 change: +0.19

Stop Loss: 64.40
Target(s): 72.50
Current Option Gain/Loss: -60.7%
Time Frame: Exit PRIOR to earnings on Aug. 8th
New Positions: see below

Comments:
07/23/13: VC has not performed well the last few days. Shares keep failing at the $66 level. Tonight we are suggesting an immediate exit at the opening bell tomorrow morning.

- Suggested Positions -

Long Aug $70 call (VC1317H70) entry $1.40

07/23/13 prepare to exit tomorrow at the open
07/16/13 triggered on gap open higher at $66.89
suggested trigger was $66.75

Entry on July 16 at $66.89
Average Daily Volume = 484 thousand
Listed on July 13, 2013


PUT Play Updates

Questcor Pharma. - QCOR - close: 46.71 change: -0.81

Stop Loss: 47.01
Target(s): 42.25
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to earnings on July 30th
New Positions: Yes, see below

Comments:
07/23/13: QCOR gave back about half of yesterday's gain. Today's move looks like a failed rally. More aggressive traders may want to buy puts now with a stop above today's high. The newsletter will stick to the original plan and wait for QCOR to hit our trigger at $45.30. However, if QCOR does not see any follow through lower tomorrow then we will likely drop it as a candidate. Earnings are coming up soon next week.

Earlier Comments:
Shares have definitely been volatile over the last couple of years. Plenty of investors are bearish. The most recent data listed short interest at 32% of the relatively small 48.6 million share float.

I do consider this an aggressive, higher-risk trade. Friday's low was $45.41. I am suggesting a trigger to buy puts at $45.30. You may want to wait for a drop under $45.00 instead. Our target is $42.25. We don't have much time. QCOR is scheduled to report earnings on July 30th and we do not want to hold over the announcement.

Trigger @ 45.30 *Small Positions*

- Suggested Positions -

buy the Aug $42 PUT (QCOR1317T42)

Entry on July -- at $---.--
Average Daily Volume = 1.2 million
Listed on July 20, 2013


SPDR S&P 500 ETF - SPY - close: 169.14 change: -0.36

Stop Loss: 172.75
Target(s): 165.25
Current Option Gain/Loss: +0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Comments:
07/23/13: Sadly the SPY did not hit our entry trigger at $169.90. It came close. The high today was $169.83. The pullback from its high today has created a very small but still bearish engulfing candlestick reversal pattern. We are adjusting our entry point strategy. Instead of waiting for the SPY to hit $169.90 we are suggesting traders buy puts immediately at the opening bell tomorrow.

NOTE: There are a lot of different option symbols for the SPY. Make sure you get the right one. We're choosing the regular August $170 put that expires on the 17th.

- Suggested Positions -

Buy the Aug $170 PUT (SPY1317T170) current ask $2.29

07/23/13 adjust entry strategy. Do not wait for a trigger. Buy puts at the opening bell tomorrow.

Entry on July 24 at $---.--
Average Daily Volume = 123 million
Listed on July 22, 2013



Longer-Term Play Updates



Chicago Bridge & Iron - CBI - close: 62.25 change: -0.50

Stop Loss: 55.75
Target(s): 74.50
Current Option Gain/Loss: +37.2%
Time Frame: 4 to 6 months
New Positions: see below

Comments:
07/23/13: CBI saw a little bit of profit taking today (-0.79%). There might be some short-term support at the 10-dma (near 61.90) and at the 50-dma (near 60.80). We are not suggesting new positions at this time.

The company is expected to report earnings on July 30th.

*Small Positions* - Suggested Positions -

Long 2014 Jan $65 call (CBI1418A65) entry $2.55

07/20/13 new stop loss @ 55.75
06/29/13 CBI might be poised to dip into the $57-55 zone again.
06/24/13 triggered @ 56.75
06/22/13 adjust entry trigger to $56.75
06/15/13 entry strategy change: change the breakout trigger at $65.25 to a buy-the-dip trigger at $56.50. Adjust the stop loss to $53.75.
Adjust the option strike to the 2014 Jan. $65 call

Entry on June 24 at $56.75
Average Daily Volume = 1.8 million
Listed on June 01, 2013


CLOSED BULLISH PLAYS

Automatic Data Processing - ADP - close: 72.49 change: -0.67

Stop Loss: 71.75
Target(s): 74.00
Current Option Gain/Loss: +103.0%
Time Frame: 6 to 8 weeks
New Positions: see below

Comments:
07/23/13: I'm calling it on our ADP trade. Something funny is going on and our trade should have been closed. Two days in a row the intraday chart shows ADP trading above our exit target at $74.00. Yet the normal daily chart and quote feed says ADP did not trade above $74.00. What gives? If you look at the time and sales data for today ADP traded at $74.16 at the 9:30:00 mark this morning. Yesterday on the intraday chart it was 74.01. Our exit target has been $74.00.

The August $70 call supposedly traded at $3.57 this morning, which was seven cents above yesterday's closing ask. We are going to call this one a "win" but it's definitely debatable. If you're still holding calls I would suggest an immediate exit given ADP's relative weakness today (-0.9%).

- Suggested Positions -

Aug $70 call (ADP1317H70) entry $1.65 exit $3.35 (+103.0%)

07/23/13 unofficially traded above our exit target at $74.00
trade closure is debatable. We suggest an early exit now if holding calls
07/20/13 new stop loss @ 71.75
07/19/13 sold half at the open. ADP gapped open higher at $73.14
option exit at $3.20 (+93.9%)
07/18/13 prepare to sell half of our position at the open tomorrow to lock in some gains
07/15/13 new stop loss @ 70.95
07/11/13 new stop loss @ 69.85
07/10/13 new stop loss @ 69.40
07/06/13 new stop loss @ 68.40
06/27/13 new stop loss @ 67.90

chart:

Entry on June 18 at $69.25
Average Daily Volume = 1.8 million
Listed on June 17, 2013


Borg Warner - BWA - close: 91.60 change: -0.06

Stop Loss: 89.75
Target(s): 93.00
Current Option Gain/Loss: +57.1%
Time Frame: exit PRIOR to earnings on July 25th
New Positions: see below

Comments:
07/23/13: BWA tagged another new high intraday before closing down six cents. Our plan was to exit today at the closing bell to avoid holding over the earnings report.

- Suggested Positions -

Long Aug $90 call (BWA1317H90) entry $2.10* exit $3.30 (+57.1%)

07/23/13 planned exit
07/22/13 new stop @ 89.75, ready to exit tomorrow at the close
07/20/13 new stop loss @ 87.75, prepare to exit on Tuesday, July 23rd at the closing bell
07/15/13 new stop loss @ 86.40
07/11/13 trade opened on gap higher at $88.28. Trigger was $87.75
*option entry price is an estimate since the option did not trade at the time our play was opened.

chart:

Entry on July 11 at $88.28
Average Daily Volume = 860 thousand
Listed on July 10, 2013


Sourcefire, Inc. - FIRE - close: 75.49 change: +16.41

Stop Loss: 57.95
Target(s): 64.75
Current Option Gain/Loss: +420.0%
Time Frame: exit PRIOR to the earnings report on July 29th
New Positions: see below

Comments:
07/23/13: Bingo! We hit the jackpot with FIRE today. This morning, before the opening bell, it was announced that Cisco Systems (CSCO) would buy FIRE for $2.7 billion. That is a 29% premium over yesterday's close. The stock gapped open higher at $75.90, exceeding our exit target price, and closing our trade.

The August $65 call gapped open at $10.70. Minus the spread our exit is $10.40.

- Suggested Positions -

Long Aug $65 call (FIRE1317H65) entry $2.00 exit $10.40 (+420.0%)

07/23/13 CSCO to buy FIRE for $2.7 billion. Shares of FIRE gap open above our target.

chart:

Entry on July 18 at $60.25
Average Daily Volume = 431 thousand
Listed on July 17, 2013


Noble Energy - NBL - close: 65.18 change: -0.79

Stop Loss: 64.75
Target(s): 68.00
Current Option Gain/Loss: +29.6%
Time Frame: Exit PRIOR to earnings on July 25th
New Positions: see below

Comments:
07/23/13: Yuck! It was a disappointing session for NBL. The stock underperformed the price of oil, underperformed its peers, and the broader market with a -1.19% decline today. Our plan was to exit today at the closing bell.

- Suggested Positions -

Aug $65 call (NBl1317H65) entry $1.35 exit $1.75 (+29.6%)

07/23/13 planned exit
07/22/13 new stop loss @ 64.75, exit tomorrow at the close
07/20/13 new stop loss @ 63.65, adjust the exit target to $68.00
prepare to exit positions on Tuesday, July 23rd at the close
07/15/13 new stop loss @ 62.45
07/13/13 new stop loss @ 61.40

chart:

Entry on July 09 at $63.05
Average Daily Volume = 1.9 million
Listed on July 06, 2013


The Fresh Market, Inc. - TFM - close: 52.97 change: -1.40

Stop Loss: 53.25
Target(s): 59.50
Current Option Gain/Loss: Unopened
Time Frame: Exit PRIOR to August option expiration
New Positions: see below

Comments:
07/23/13: Shares of TFM are not cooperating. The stock underperformed the market today with a -2.5% decline. We've been waiting for a breakout above $55 but it hasn't happened yet. Tonight we're removing TFM as a candidate with the trade unopened.

Trade did not open.

07/23/13 removed from the newsletter

chart:

Entry on July -- at $---.--
Average Daily Volume = 469 thousand
Listed on July 20, 2013


CLOSED BEARISH PLAYS

Marathon Petroleum - MPC - close: 71.77 change: +1.93

Stop Loss: 70.15
Target(s): 61.00
Current Option Gain/Loss: Unopened
Time Frame: exit PRIOR to earnings on Aug. 1st
New Positions: see below

Comments:
07/23/13: Our MPC trade is not working. The stock continues to bounce from its recent test of support near $68.00. Shares are now back above the $70 level and now they're testing technical resistance at the 200-dma. Our trade has not opened yet (trigger 67.45). Tonight we're removing MPC as an active candidate.

Trade did not open.

07/23/13 removed from the newsletter

chart:

Entry on July -- at $---.--
Average Daily Volume = 3.8 million
Listed on July 18, 2013