Editor's Note:

The small cap Russell 2000 index outperformed the major averages again. Traders may want to focus their search for bullish candidates in the small cap sector.

Current Portfolio:

BULLISH Play Updates

AU Optronics - AUO - close: 11.66 change: -0.31 stop: 10.90

Shares of AUO hit some profit taking after yesterday's rally to resistance near $12.00. I cautioned readers to expect a pull back and I would use this dip as a new entry point for bullish positions. More conservative traders may want to wait for AUO to clear possible resistance at the $12.00 level first. Our target is the January highs in the $13.20-13.30 zone. FYI: The Point & Figure chart is very bullish and forecasts a $21 long-term target. I suggested we keep our position size small.

Current Position: AUO stock @ 11.77

Entry on April 05 at $11.77
Earnings Date 04/22/10 (unconfirmed)
Average Daily Volume: 2.5 million
Listed on April 3rd, 2010

Broadcom Corp. - BRCM - close: 34.40 change: -0.23 stop: 31.75

After yesterday's big rally in BRCM the stock encountered some profit taking this morning but traders bought the dip near $34.00. The action here is still bullish. More aggressive traders could use this midday bounce as a bullish entry point but if you do I would consider a tighter stop loss. Our first target is $34.95. Our second, more aggressive target is $37.40 with a time frame of several weeks.

Current Position: BRCM stock @ 32.66

Entry on March 11 at $32.66
Earnings Date 04/21/10 (unconfirmed)
Average Daily Volume: 8.0 million
Listed on March 10th, 2010

BorgWarner Inc. - BWA - close: 38.05 change: -0.32 stop: 36.90

The trading in BWA this week has taken on a more bearish tone. Yesterday's bearish reversal has been followed with a 0.8% decline. If we see BWA breakdown under the $37.00 level I'll drop it as a bullish candidate. For now we're still waiting for a breakout over $40.00.

We'll use a trigger to open bullish positions at $40.25. If triggered our target is $44.75. BWA doesn't move super fast so this could take a few weeks for the stock to get there. Our initial entry point and stop loss set up is somewhat aggressive. More conservative traders may want to use a tighter stop. My biggest concern is that BWA might see an intraday spike over $40.00 and then reverse on us. Overall the stock looks bullish after months of consolidating sideways. The Point & Figure chart looks very bullish and is forecasting a long-term $55 target.

Trigger to open bullish positions $40.25

Suggested Position: BWA stock @ 40.25 (unopened)

Option Traders:
Suggested Position: Buy CALL May $40.00 (BWA 10E40.00) current ask $1.15

Entry on April xx at $xx.xx
Earnings Date 04/29/10 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on April 3rd, 2010

Cash America - CSH - close: 41.25 change: +0.07 stop: 38.99

CSH continues to creep higher after yesterday's bullish breakout past resistance. I would still consider new positions here. If you're nimble enough you could try and jump in on a dip in the $40.50-40.00 zone. After four weeks of consolidating sideways in the $39-41 zone I suspect CSH is poised for a new leg higher. I'm suggesting bullish positions now with a stop at $38.99. Our first target is $44.90.

Current Position: CSH stock at $41.05

Entry on April 06 at $41.05
Earnings Date 04/22/10 (unconfirmed)
Average Daily Volume: 263 thousand
Listed on April 5th, 2010

Linear Tech. - LLTC - close: 28.78 change: -0.21 stop: 27.70

Shares of LLTC spent the session consolidating sideways in a relatively narrow range. Readers may want to look for a move over $29.15 before considering new positions. If you own April options don't forget that they expire in less than two weeks. Our first target is $29.95. Our second target is $30.95.

Current Position: LLTC stock @ 28.25

Option Traders:
Current Position: CALL APR 28.00 (LLTC 10D28.00) @ $1.00

Entry on March 16 at $28.25
Earnings Date 04/13/10 (unconfirmed)
Average Daily Volume: 3.9 million
Listed on March 11th, 2010

Palomar Medical Tech. - PMTI - close: 11.57 change: +0.53 stop: 10.60

Hmm... Tuesday turned out to be an interesting session for PMTI. The stock spiked higher on a burst of volume and hit an intraday high of $12.56. This was above resistance near $12.00 and its 200-dma. The rally didn't last and shares settled around the $11.50 area. I couldn't find any specific news behind the move and I hesitate to launch new positions without more info.

PMTI has already hit our first target at $11.45. Our second and final target is $12.75.

Current Position: PMTI stock @ 10.55

1st Target Hit (03/22/10) @ 11.45

Entry on March 16 at $10.55
Earnings Date 04/29/10 (unconfirmed)
Average Daily Volume: 132 thousand
Listed on March 13th, 2010

BEARISH Play Updates

Corrections Corp. of America - CXW - close: 19.67 chg: -0.15 stop: 21.05

The slow-motion roll over in shares of CXW continues. Shares lost 0.75% on above average volume. I remain bearish and would still consider new positions at this time. More conservative traders may want to consider a tighter stop loss near $20.55 or near $20.20. Our target is $18.00. The low in February 2010 was $17.50.

Current Position: SHORT CXW stock @ 19.90

Entry on March 19 at $19.90
Earnings Date 05/06/10 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on March 17th, 2010

MAXIMUS Inc. - MMS - close: 61.18 change: +0.07 stop: 62.11

The consolidation in MMS is narrowing. I would expect a breakout in the next few days. There is no change from my prior comments and we have two different triggers. We have a bullish trigger to buy MMS on a breakout and a bearish trigger to short MMS on a breakdown. Readers could choose to leverage any move with May or July options. Or you could even look into a direction neutral strategy like a collar or a straddle using options.

If MMS hits our bearish trigger for shorts at $59.80 our target is $55.25.

If MMS hits our bullish trigger at $62.25 our target is $67.00. I do need to label this trade somewhat aggressive since we normally do not trade stocks with average volume under 250K a day.

TWO TRIGGERS, One Bearish, One Bullish

Trigger for bearish positions at $59.80

Suggested Position: (SHORT) MMS stock at $59.80 (unopened)

Trigger for bullish positions @ 62.25

Suggested Position: BUY MMS stock at $62.25 (unopened)

Entry on April xx at $59.80 (unopened)
Earnings Date 05/06/10 (unconfirmed)
Average Daily Volume: 83 thousand
Listed on March 31st, 2010

Warner Chilcott - WCRX - close: 26.32 change: +0.24 stop: 26.26

WCRX is still trying to bounce and the stock added 0.9% in addition to close over technical resistance at its 50-dma. Yet the move higher today stalled when WCRX filled the gap down from March 25th. Thus far this is still just a lower high in a series of lower highs. I will repeat my comments from yesterday. If WCRX closes over the $26.50 level we'll drop it as a bearish candidate. Until then we're waiting for a breakdown under support at $25.00.

I am suggesting we use a trigger to open bearish positions at $24.80. If triggered our first target is $22.60. The 200-dma is nearing the $22.50 region and could offer technical support. Our second, more aggressive target is the $20.25 mark.

Trigger to open bearish positions @ 24.80

Suggested Position: SHORT WCRX stock at $24.80 (unopened)

Option Traders:
BUY the April $25.00 PUT (WCRX 10P25.00) current ask $0.50

Entry on March xx at $xx.xx
Earnings Date 05/11/10 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on March 29th, 2010