Current Portfolio:

BULLISH Play Updates

Dr. Pepper Snapple Group - DPS - close 36.83 change +0.11 stop 35.95 *NEW*

Target(s): 36.80 (hit), 37.00, 37.95
Key Support Areas: 35.75, 34.40, 32.70
Key Resistance Areas: 36.93, 37.15
Current Gain/Loss: +3.75%
Time Frame: 1 to 2 weeks
New Positions: No

DPS is currently above our first target of $36.80 and we have gained +3.75%. I am going to move our stop up to $35.95 to protect our profits in this trade. I've listed another target of $37.00 which is below today's highs. This means we will most likely exit tomorrow. The stock has good support with its 20-day and 50-day SMA's below. For readers who want to give this trade more room protective stops could be placed below these levels. But I urge readers to be careful and consider booking profits because if the market is truly going to unwind DPS won't be spared. Our final target of $37.95 may be wishful thinking and I don't suggest holding out for this target.

Current Position: Long DPS stock at $35.50

Entry on: May 21
Earnings Date: More than 2 months (unconfirmed)
Average Daily Volume: 1.9 million
Listed on: May 8, 2010

General Electric - GE - close 16.01 change -0.41 stop 15.94

Target(s): 16.25, 17.00, 17.45, 18.25
Key Support Areas: 16.00
Key Resistance Areas: 16.25, 16.80, 17.20, 17.80, 18.00
Current Gain/Loss: -5.82% Time Frame: Several weeks
New Positions: No

GE just can't find its footing here and it appears that we may get stopped out tomorrow. If we gap lower I'll use the same rule for managing the exit as I did on Friday. GE gapped opened significantly lower on Friday and below our stop. When this happens I have a rule for exiting positions if the stock has an opening gap up or down through, or very close to stops. For long positions here is my rule of thumb: If a stock gaps down below the stop that has been established, wait for the first 15 minutes of trading before doing anything. Then place a new protective stop just under the low of that first 15 minutes of trading. Reverse the entire scenario for shorts. The reason I do this is because I want to measure the real strength or weakness in the stock. I don’t want a Good Til Cancelled (GTC) stop to be unnecessarily triggered at the open because often times stocks gap and reverse immediately, which keeps us in the position and looking for a better exit. In GE’s case this worked perfectly on Friday and kept us in the position. I suggest selling into strength or tightening stops if GE happens to rebound tomorrow. The resistance areas listed above are areas to consider exiting or tightening stops.

Current Position: Long GE Stock at $17.00.

Entry on May 19, 2010
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 88 million
Listed on 5/18/10, 2010

MetroPCS Communications - PCS - close 8.44 change +0.05 stop 7.80

Target(s): 9.00, 9.25
Key Support Areas: 8.18, 8.05, 7.85
Key Resistance Areas: 8.62, 8.90
Current Gain/Loss: N/A Time Frame: 1 to 2 weeks
New Positions: Waiting to be triggered

PCS has shown relative strength while the overall market has declined in recent weeks. There was major volatility during the flash crash in this stock which appears to have shaken out the weak hands. The stock has responded nicely since and bounced off of its 20-day SMA on Friday. I'm playing for a bounce in PCS along with the overall market and I suggest readers initiate long positions if PCS retests its lows from Friday near $8.20. If the market bounces from here I think PCS is poised to retest its recent highs, which are near our targets of $9.00 and $9.25. We'll use tight a stop at $7.80, which is below a gap fill from 5/10 to 5/11. I also like the 2:1 risk/reward set-up of this trade: we are risking 40 cents to make 80 cents, and possibly $1.05.

Suggested Position: Long PCS stock at if it trades down near $8.20

Entry on May xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 9.6 million
Listed on 5/22/10, 2010

BEARISH Play Updates

Royal Caribbean - RCL - close 27.91 change -0.43 stop 31.50

Target(s): 25.05, 24.05
Key Support Areas: 27.38, 25.00
Key Resistance Areas: 28.85, 29.80
Current Gain/Loss: +3.09%
Time Frame: Several Weeks
New Positions: Yes

RCL traded right up to our first entry trigger at $28.85 so we are now short the stock at $28.80. The lack of follow through to the early morning strength was enough for us to enter short. The stock traded as high $28.91 and retested this area twice but failed. RCL has been pummeled over the last couple of weeks and I believe there is more downside in the stock's future. The stock has broken an upward trend line that started on 7/8/09 and is ever so close to breaking its longer term upward trend line that started on 3/3/09. If RCL breaks below $27.38 (Friday's low) I believe the stock should see $25.05 in short order which is our first target. Our second more aggressive target is $24.05. Our initial stop will be $31.50 and our time frame is several weeks.

Current Position: Short RCL stock at $28.80

Option Traders:
Suggested Position: Buy JUNE $28.00 PUT

Entry on May 24
Earnings More than 2 months (unconfirmed)
Average Daily Volume: 4.5 million
Listed on May 22, 2010


EMC Corp. - EMC - close 18.06 change +0.10 stop 16.95

Target(s): 18.20, 20-day SMA, 18.70
Key Support Areas: 17.65, 17.55, 17.45, 17.10
Key Resistance Areas: 17.80, 18.00, 18.50, 18.85
Current Gain/Loss: +2.54%
Time Frame: 1 to 2 weeks
New Positions: Closed

We made a judgment call to close EMC at our first target of $18.20 today for a +2.54% gain. Lack of continued follow through on the market's early strength was the clue to close the position. I'll leave my comments from the weekend as they have not changed. The stock is now battling its long term pivot level dating back to June of 2007 at $18.00. EMC is finding support on a trend line that began with the 9/3/09 lows to 2/5/10 lows, and finally the flash crash lows on 5/6/10. But the stock still faces overhead congestion like many others. If EMC can get over $18.00 we should hit our first target at $18.20. Our more aggressive second target has been lowered to $18.70 which is just below the stock's 50-day and 20-day SMA's. I've also listed the 20-day SMA as a target and urge readers to exit positions or tighten stops if the stock trades anywhere near this level to protect capital and protect against a reversal. EMC could trade up to its 50-day SMA if the bounce in the overall market can continue this week. With the extreme up and down volatility and oversold conditions we could easily see a continued short covering rally creating a sharp move higher and if that happens we need to be taking profits.

Closed Position: Long EMC Stock at $18.20, entry was at $17.75.

Annotated chart:

Entry on May 20, 2010
Earnings Date: More than 2 months (unconfirmed)
Average Daily Volume: 25 million
Listed on 5/19/10