Current Portfolio:

BULLISH Play Updates

Dr. Pepper Snapple Group - DPS - close 37.25 change -0.64 stop 32.49

Target(s): 36.80, 38.80
Key Support Areas: 35.75, 34.75, 32.70
Key Resistance Areas: 36.80, 37.45
Current Gain/Loss: N/A
Time Frame: Several weeks
New Positions: Waiting for trigger

DPS is exhibiting great strength compared to the market but we are anticipating a pullback to its 20-day and 50-day SMA's near $35.00 before entering long positions. The stock formed a red candle high with Thursday's price action. This is a bearish signal I've learned that usually signals more downside to come. So we will wait patiently for the pullback to our trigger near $35.00. If there is significant weakness in the market DPS should make it down here and I want to be ready to take advantage of it. If triggered our stop is $32.49. Please keep your position size small since the market has been so volatile.

Suggested Position: Long DPS stock if it trades near $35.00

Annotated Chart:

Entry on: May xx
Earnings Date: More than 2 months (unconfirmed)
Average Daily Volume: 1.9 million
Listed on: May 8, 2010

Titanium Metals - TIE - close 16.84 change -0.57 stop 14.70

Target(s): 17.30, 18.00
Key Support Areas: 16.00, 15.50, 15.00
Key Resistance Areas: 16.00, 16.70, 17.25
Current Gain/Loss: Unopened
Time Frame: Several weeks
New Positions: Waiting for trigger

TIE is coming to us and I want to be ready to initiate long positions if it trades down to $16.05. This right at its 20-day SMA and should act as good support. If TIE gets down here it would also create a bullish inverse head and shoulders pattern on the daily chart (see ovals). The stock reacted favorably during the overall market plunge and I suggest readers take advantage of any pullback in the stock to the $16.00 area. If triggered we our looking for the stock to trade back up $17.30, which would garner a nice +7.7% gain. Our second more aggressive target is $18.00 which is near recent highs and highs from May 2008. Note, it may take several days to a week to get filled on this trade but I want to keep the play active in case there is significant weakness in the coming days.

Suggested Position: Long TIE Stock if it trades down near the $16.00 area

Annotated Chart:

Entry on xx at xx
Earnings Date 8/4/2010 (unconfirmed)
Average Daily Volume: 3.8 million
Listed on 5/10/10, 2010

BEARISH Play Updates

Baidu, Inc. ADR - BIDU - close 75.64 change -2.56 stop 79.10

Target(s): 71.50, 65.10
Key Support Areas: 71.40, 68.50, 65.00
Key Resistance Areas: 78.50, 82.25
Current Gain/Loss: -0.36% Time Frame: Several Weeks
New Positions: Yes Comments:
BIDU chopped around today and quite frankly I was a little disappointed there was not more selling. But we will wait for things to develop. Per the play release we are now short BIDU stock at $74.25. My technical comments remain mostly the same from the play release, except I want to add that I think BIDU and GOOG is a classic pairs trade. I suggest being long GOOG and short BIDU. If the divergence between these companies narrows the pairs trade would be legendary and could go on for weeks if not months. My bearish comments on BIDU are as follows: BIDU had a 10:1 stock split on Wednesday and investors piled into the stock on Thursday, only to be met with fierce selling. I believe this has created a climax high. There also appears to be a nasty candlestick pattern forming that I have learned called a red candle high. Usually this signals more downside to come as buyers get exhausted and start to lock in profits and sell stock. From a fundamental perspective BIDU trades at a PE ratio of about 100 which is simply too high. BIDU's American rival Google has lost about -20% since its January highs, while BIDU has went on to gain about +80%. This is a clear divergence from two very similar companies that some may argue is justified due to BIDU's early stage growth. However, I believe it is a clear disconnect and I think investors will start dumping the stock on any further weakness. I believe the conditions are ripe for quick decent. Our stop is above Wednesday's highs at $79.10 and our time frame is several weeks. Our first target is $71.50 which would fill the gap higher from last Wednesday and coincide with a secondary trend line that started on January 29th. I'm ultimately looking for a move down to $65.10 which is our 2nd target. This stock can be volatile and is prone to gaps so please be smart when considering position size.

Current Position: Short BIDU stock at $74.25.

Option Traders:
Suggested Position: Buy JUNE $73.00 PUT

Annotated chart:

Entry on May 14, 2010
Earnings July 15, 2010 (unconfirmed)
Average Daily Volume: 68 million
Listed on May 13, 2010

iShares Russell 2000 - IWM - close 69.56 change -1.37 stop 73.10

Target(s): 69.05 (hit), 68.05, 67.05
Key Support Areas: 68.60, 67.75, 66.75
Key Resistance Areas: 70.50, 72.10, 72.60
Current Gain/Loss: +3.05%
Time Frame: About 2 weeks
New Positions: Yes

Our set-up in IWM worked out beautifully this week and our first target of $69.05 was hit twice on Friday. For readers who took profits the gain is +3.7%. A bearish pattern I like to look for is when stocks rally into moving averages from below after they have recently been broken. Often times they fail and swiftly reverse back down which is exactly what happened with IWM and its 20-day SMA, although it did overshoot it a tad which tested our will. The market will probably bounce early next week so if you plan to hold the position be patient. The psychological damage has been done to the bulls in my opinion so I anticipate bounces will be sold into. Our second target is $68.05 and our third target is $67.05. Our stop is $73.10.

Current Position: Short IWM stock at $71.75

Option Traders:
Suggested Position: Buy JUNE $72.00 PUT

Annotated Chart:

Entry on May 13
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 79 million
Listed on May 12, 2010

Sina Corporation - SINA - close 35.11 change -0.30 stop $37.05

Target(s): 33.25 (hit), $33.50, 32.50, 30.50
Key Support Areas: $33.40 32.50, 30.50
Key Resistance Areas: 35.40, 36.00, 36.80
Current Gain/Loss: -0.46%
Time Frame: About 1 week
New Positions: Aggressive traders only

Anyone who has bought SINA in the grey shaded area on the chart below has to be wondering why they have held onto their positions and I believe this overhead congestion will continue to be a drag on the stock. However, there are always turning points in stocks so we can't get too confident here. But I am sticking with the thesis that this stock goes lower with the overall market. SINA has formed a downward channel on the daily chart (see dashed red lines) and as soon as it gets moving towards the bottom of this channel I suggest readers take profits. Our first target of $33.25 was hit last week but this is not a bad place to consider taking profits again. $32.50 is another support area just below which is where I also suggest readers take profits. Our stop is $37.05. SINA may bounce with the overall market early this week but I expect the overhead resistance and congestion to hold. With all that being said SINA reports earnings on Monday after the bell. I have rules but rules are meant to be broken on occasion. In this circumstance I think the overall news driven market and ensuing weakness may be too much for SINA's earnings to really matter that much, even if they are better than expected. And many stocks have sold off after earnings lately regardless of their results. Officially, I anticipate holding this position over earnings, unless there is a big flush on Monday to 33.25. Traders who are uncomfortable holding the position over earnings should exit on Monday to protect capital. We have stops in place so if SINA does rally we'll get taken out for a loss.

Current Position: Short SINA stock at $34.95

Option Traders:
Suggested Position: JUNE $35.00 PUT

Annotated Chart:

Entry on May 4,2010 at $34.95
Earnings Date May 17, 2010 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on May 1, 2010

USG Corp. - USG - close 20.95 change -1.29 stop 23.25

Target(s): 20.50, 19.25, 18.25
Key Support Areas: 20.85, 20.25, 19.25.
Key Resistance Areas: 21.70, 22.50
Current Gain/Loss: +4.34%
Time Frame: About 2 weeks
New Positions: Yes, but only if there is a bounce in the stock

USG had big down day closing -5.80% lower. Our position has gained over +4% so this not a bad time to consider taking profits. When looking at the daily chart USG has rallied into a downtrend line from the April 30th high and its 20-day SMA and has failed. However, buyers stepped in at the end of the day Friday and the stock managed to close right above a key support level of $20.85. I've listed a target of $20.50 as a logical point to take profits on this trade for readers who do not want to wait for our more aggressive target of $19.25. In any case, taking some profits off the table now is probably a wise move. *NOTE: Please use small position due to the volatility in this stock and to limit risk.

Current Position: Short USG stock at $21.90

Option Traders:
Suggested Position: Buy JUNE $20.00 PUT

Annotated Chart:

Entry on May 12, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 7.5 million
Listed on May 11, 2010