Current Portfolio:

BULLISH Play Updates

Cisco Systems - CSCO - close 23.16 change -0.12 stop 22.20

Target(s): 23.55, 24.20
Key Support/Resistance Areas: 23.65, 22.55
Time Frame: 1 to 2 weeks

I am hoping to get filled on CSCO in the coming days at $22.85. Monday would actually be best but let's wait for the set-up and see what the market gives us. The stock hit a low of $23.05 today which I mentioned as a good entry for more aggressive traders yesterday. My comments remain the same from the play release. CSCO has been building a nice base for the past 3 to 4 weeks and is trading in a $1 range (4.5%) between $22.55 and $23.55. $22.50 is key pivot level for the stock dating back to 2006. It appears the stock may want to break higher out of this base, but we don't necessarily need that to happen for a profitable trade. CSCO looks stable here with a lot of support and I suggest we take advantage of the reliable price pattern that is being built. I would like to use $22.85 as a trigger to enter long positions. If triggered readers should be able to purchase July $22.00 calls for about $1.30 (current ask is $1.49). If CSCO then proceeds to rally to the top of its base at $23.55 we should make about 55 cents on the position for a +40% gain. If CSCO breaks out it could rally to fill a gap which is up near our more aggressive 2nd target of $24.40 and below the stock's 200-day SMA. Another entry could be considered at $23.05. Our stop will be $22.20. NOTE: I view this trade as potentially being quick.

Suggested Position: Long CSCO stock if it trades down near $22.85

Option Traders:
Suggested Position: Buy July $22.00 CALL, current ask $1.64, estimated ask at entry $1.30

Entry on June xx
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 69 million
Listed on 6/16/10

Northern Oil & Gas - NOG - close 14.00 change -0.21 stop 13.05

Target(s): 14.75, 14.90
Key Support/Resistance Areas: 15.00, 13.60, 13.15
Time Frame: 1 to 2 weeks

We are just not getting cooperation with getting filled. NOG traded down to $13.96 (1 cent above our trigger to enter at $13.95). I'm going to go out on a limb and suggest we buy NOG at the open tomorrow as I see a lot of support at current levels. The stock's 20-day SMA (currently $13.71) is turning up and I expect this to hold. We are also right at an upward trend line that has formed with the lows from 5/25 and 6/8. For traders that have the ability to trade intraday I would probably wait to enter long positions after the opening range is broken to the upside. This will ensure the position is moving in the right direction prior to going long. My comments from the play release remain mostly the same. NOG has broken a recent downtrend line and looks like it is trying to form a higher low that would be confirmed if the stock trades above its recent highs. The stock also has solid support at $13.60 which is a prior resistance area from early 2010 and is also near the 20-day SMA. NOG has taken back its 20-day SMA and I believe a trip up to 50-day SMA will follow in short order. I expect NOG to at least retest its June 3rd high which is above our targets of $14.75 and $14.90 (adjusted) and below the 50-day SMA. If the trade plays out how we expect the gain will be about 6% to 7%. NOTE: I consider this a volatile stock and industry so please use proper position size to limit risk.

Suggested Position: Long NOG stock at current levels

Option Traders:
Suggested Position: Buy July $12.50 CALL, current ask $2.05

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

Ormat Technologies - ORA - close 29.61 change -0.18 stop 27.25

Target(s): 30.45, 31.80
Key Support/Resistance Areas: 32.00, 30.60, 29.00, 27.50
Current Gain/Loss: +1.23%
Time Frame: Several weeks
New Positions: Yes

ORA closed above its 50-day SMA and made a new daily high again, however, the stock sold off during the morning weakness and closed down 18 cents. For options traders, if we get a move up to $30.45 (which is our first target) next week our options should be worth about $1.45. This will represent a nice profit and is a good place to take profits or tighten stops. If you are only trading the stock I think ORA can make it up to the $31.80 area but it may take some time depending on the overall market direction. The fact that ORA is making daily highs is good and as the sellers wane I am confident we will hit our targets.

Current Position: Long ORA stock at $29.25

Option Traders:
Suggested Position: Buy July $30.00 CALL

Entry on June 16, 2010
Earnings Date 8/4/10 (unconfirmed)
Average Daily Volume: 345,000
Listed on 6/15/10

BEARISH Play Updates

Mohawk Industries - MHK - close 52.43 change -0.84 stop 58.05

Target(s): 52.05 (hit), 51.50, 50.40, 49.10
Key Support/Resistance Areas: 55.00, 52.00, 50.00
Current Gain/Loss: +1.69%
Time Frame: 1 to 2 weeks
New Positions: Yes

MHK opened at $53.33 so we are short the stock. MHK was extremely weak this morning, hitting our first target quickly and filling some of the gap down to our second target of $50.40. The stock has made a series of lower highs on the intraday charts and looks vulnerable. I've listed another target just above today's lows at $51.50 which is good area to tighten stops to protect or simply profits. My comments from the play release remain mostly the same. MHK has rallied +14% from its 6/8 lows and finds itself in a resistance and congestion area between $53.00 and $55.00. The stock has also hit its 100-day and 20-day SMA's and has been stopped. I believe it is time for the stock to turn back down from here and fill the gap higher between 6/11 and 6/14. MHK is a residential and commercial manufacturer of floor products in the US and Europe. The construction industry is struggling on both continents and consumer spending is weak. Any bad news about the industry or lowered guidance warnings could send the stock tumbling. Fundamentally, the company trades at about 28 times trailing earnings which I think is too high. I am going to place a wide stop above the 50-day SMA at $58.05 to account for volatility, but a tighter stop could be placed at $56.60 which is above the congestion zone and should give enough room for the trade to work. Our primary target is $50.40 but the stock may find support at $52.02. If it breaks this level it should see $50.40 fairly quick. NOTE: This stock is volatile so please use proper position size to limit risk.

Current Position: Short MHK stock at $53.33

Option Traders:
Suggested Position: Buy August $50.00 PUT

Entry on June 17, 2010
Earnings 7/20/2010 (unconfirmed)
Average Daily Volume: 975,000
Listed on July 29, 2010


Direct TV - DTV - close 37.79 change -1.54 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: Dropped

Wells Fargo downgraded DTV to Market Perform from Outperform with a price target of $38-40. This sent DTV down -4% today. This is enough for me to drop the play as there could be latecomers to the selling party that may have missed it today. And if the market reverses lower DTV could get hit as well so its simply not worth the risk. I'll keep an eye on the stock and may consider re-listing it at some point in the future. For now, we have dropped the play.

Suggested Position: Long DTV stock if it trades down near $37.20, which is just above its 50-day SMA

Option Traders:
Suggested Position: Buy July $37.00 CALL, current ask $2.78, 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