Editor's Note: Good Evening. PXD hit all of our targets in early trading today so we are flat the position for a +8% gain. Stocks look vulnerable here. Tomorrow's open is going to be interesting. If we break down I urge traders to exit long positions quick as the selling could easily intensify. I also suggest traders be smart with short positions and protect profits as things can reverse quickly. If I am wrong and the markets surge higher all of this needs to be considered in reverse. Stay nimble and please email me with any questions.

Current Portfolio:

BULLISH Play Updates

Direct TV - DTV - close 37.70 change +0.09 stop 35.70

Target(s): 38.20, 38.50, 39.50, 41.50
Key Support/Resistance Areas: 38.60, 37.00, 36.30
Current Gain/Loss: N/A
Time Frame: Several weeks
New Positions: Waiting to be triggered

My comments from last night remain the same. I am going to shift gears on this trade and lower our trigger to enter long positions to the rising 50-day SMA near $36.50. It feels like DTV wants to trade down there so lets limit our risk in the trade and pounce on the stock if it gets there. The 50-day SMA is currently $36.40 but is rising.

Suggested Position: Long DTV stock if it trades down near its 50-day SMA, currently near $36.50

Option Traders:
Suggested Position: Buy July $37.00 CALL, current ask $1.91, estimated ask at entry $1.40

Entry on June xx
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 12.3 million
Listed on 6/5/10

Petroleo Brasileiro SA - PBR - close 37.56 change +0.46 stop 35.90 *NEW*

Target(s): 38.50, 39.25, 39.95
Key Support/Resistance Areas: 37.45, 36.25
Current Gain/Loss: -0.24%
Time Frame: 1 week
New Positions:

PBR gapped up just above our entry target at $37.52 and then pulled back into the $37.65 range which is where we initiated long positions. The stock proceeded to gain over $1 and our position was up +2.6% but PBR proceeded to give it all back late in the day. The candlestick pattern formed has me concerned and is considered a reversal pattern. I suggest conservative traders sell positions or use a tight stop to limit risk. However, if you believe the selling in oil stocks is overdone PBR gives you a great chance to capitalize on some gains. This is why. PBR remains above the ascending triangle resistance in the $37.25 to $37.50 area that should now act as support. In addition, the stock gained +1.24% on the day while the remainder of the market, including oil stocks, experienced losses. PBR has also been one of the best performers of the integrated oil companies recently. With all of this said we still must be prudent and capital so I would like to raise the stop a bit to $35.90 which will give us some leeway if there is a further pullback. I'm also listing a target to just below today's highs at $38.50 which is a good place to tighten stops. PBR could even trade back up to this level by the end of the week. Nonetheless tomorrow will be interesting.

Current Position: Long PBR stock at $37.65

Option Traders:
Suggested Position: Buy July $37.00 CALL

Entry on June xx
Earnings Date 8/13/10 (unconfirmed)
Average Daily Volume: 19.6 million
Listed on 6/8/10

Quest Software - QSFT - close 18.58 change -0.20 stop 18.10

Target(s): 19.60, 20.00, 20.50, 21.00
Key Support/Resistance Areas: 18.40, 18.60, 19.36, 20-day SMA, 50-day SMA
Current Gain/Loss: -2.21%
Time Frame: Several weeks
New Positions: Yes

QSFT is not cooperating and has all of a sudden become an underperformer and technology stocks in general seem to have shifted gears. QSFT gapped up higher today and quickly sold off the remainder of the day. For options traders we chose out of the money calls to limit capital at risk for this very reason. We still have some time to see if QSFT turns around so let's stick with the set-up and see if the stock can get some legs here. The stock closed below the recent breakout of resistance at $18.70 which are highs from April, January, and October that I thought would act as support. I urge readers to be sellers into any strength as the week comes to an end by trailing and tightening stops if the QSFT rallies. Our stop remains at $18.10 which is just below its 50-day SMA. This may be a little to close to the 50-day SMA so the overall market strength or weakness should be considered if QSFT is trading down at this level. If there is a bar that closes below $18.10 I would suggest placing the stop below the low of that bar to see if the stock can reverse.

Current Position: Long QSFT stock at $19.00

Option Traders:
Suggested Position: Buy July $20.00 CALL

Entry on June 7, 2010
Earnings Date 8/10/10 (unconfirmed)
Average Daily Volume: 1.9 million
Listed on 6/2/10

BEARISH Play Updates

Aeropostale, Inc. - ARO - close 28.75 change +0.81 stop 29.55

Target(s): 27.30, 27.00, 26.35, 25.25
Key Support/Resistance Areas: 29.35, 28.50, 27.50, 27.00, 26.30, 25,00
Current Gain/Loss: -1.95%
Time Frame: 1 to 2 weeks
New Positions: Yes

Retailers were strong today but that will change in a hurry if the market is weak tomorrow. Technically ARO retraced 61.8% of the down move from its highs on 6/3 to its lows on 6/8 and then reversed. It also has printed a reversal bar with a topping tail off of its 50-day SMA. All of this bodes well for our position and I am expecting ARO to test its 200-day SMA in the coming days, which is near our $26.35 target. I've also listed a target at $27.30 which is just above yesterday's lows as a possible target to exit positions or tighten stops. If we go lower from here we will have a nice profit so please protect profits if ARO melts down. Our stop is $29.55 which is above the recent congestion area and above the 50-day SMA.

Current Position: Short ARO stock, entry was at $28.20.

Option Traders:
Suggested Position: Buy July $27.00 PUT

Entry on June 8, 2010
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 3.3 million
Listed on June 7, 2010

Bank of Nova Scotia Halifax - BNS - close 46.77 change +0.07 stop 49.15

Target(s): 46.30, 45.15, 44.05, 42.50
Key Support/Resistance Areas: 49.00, 48.30, 48.00, 47.50, 46.30, 45.00
Current Gain/Loss: +1.74%
Time Frame: 1 to 2 weeks
New Positions: Yes, but only on bounces

BNS gapped up above our trigger to enter short positions so we waited for the stock to break below the opening range and then initiated short positions. This is the same gap rule we've using recently when stocks gap up or down or near stops and entries. That was the confirmation that showed the stock was weak. After BNS broke down that was all she wrote. The stock proceeded to lose about dollar and I expect more downside from here. One thing to keep an eye on is that BNS may be forming an inverse head and shoulders pattern on its hourly chart with the right shoulder at $46.30. This is also near its 200-day SMA and the stock could get a bounce near this level. I do expect more downside but I also urge readers to protect profits. I've adjusted our targets slightly and also listed a raised target which is near the stock's recent closing prices. These are the areas where stops need to be tightened to protect against a reversal. I'll leave my comments from the play release as they remain valid. BNS is in a downtrend and I am looking for the stock to rally up near its 20-day SMA in the coming days and make another lower high. The stock is finding buyers near the $45.00 area but this will should eventually wane after the market bounces. The stock has barely been hanging on to its 200-day SMA and I expect BNS to eventually break it and trade down to new lows. I would like to use a trigger to enter short positions if BNS trades up near $47.40. This is near a prior support/resistance area dating back to December that I think will hold. Our stop is $49.15 which is above the highest closing price since May 17th. Readers may also consider initiating short positions at current levels or if the stock trades below $46.00 but this is a decision to be made intraday depending on market conditions.

Current Position: Short BNS stock at $47.60

Option Traders:
Suggested Position: Buy July $45.00 PUT

Entry on June 9, 2010
Earnings 8/26/2010 (unconfirmed)
Average Daily Volume: 685,000
Listed on June 8, 2010


Pioneer Natural Resources - PXD - close 63.95 change +1.65 stop 61.48 *NEW*

Target(s): 64.50 (hit), 64.90 (hit), 66.00 (hit), 66.80 (hit)
Key Support/Resistance Areas: 61.50, 60.00, 59.00
Current Gain/Loss: +8.09%
Time Frame: 1 to 2 weeks
New Positions: Closed

PXD was extremely bullish this morning and traded right through all of targets so we are out for a nice gain of +8.09%. I hope readers took profits on this trade as my comments from last night were fairly accurate. If not, the position still has a +4.47% gain as of yesterday's close so please protect profits. I'll leave my comments from last night. I'm expecting PXD to follow through with the bounce tomorrow but I urge readers to protect profits as the bounce may be short lived if the broader market begins to roll over. I would keep a keen eye on the first 15 minute trading range and trail stops up if PXD trades higher. If the stock trades lower I would be quick to book a profit. The above targets are still valid as exit areas and I have also listed $64.90 which is just below today's high. For readers who will not be able to monitor the position I suggest placing a stop at $61.48 which will protect against a hard reversal if things go lower tomorrow. This will limit your losses to about 32 cents if our targets our not hit tomorrow.

Closed Position: Long PXD stock at $66.80, entry was at $61.80

Annotated chart:

Entry on June 8, 2010
Earnings Date 7/28/2010 (unconfirmed)
Average Daily Volume: 6.4 million
Listed on 6/5/10