Current Portfolio:

BULLISH Play Updates

Emulex Corp - ELX - close 9.53 change +0.09 stop 9.07 *NEW*

Target(s): 9.59, 9.89, 10.04, 10.25
Key Support/Resistance Areas: 11.40, 11.00, 10.50, 10.10, 9.70, 9.25
Current Gain/Loss: -2.26%
Time Frame: 1 to 2 weeks
New Positions: Yes

7/19: ELX traded down to our key support level at $9.25 and then bounced closing almost +1% higher. ELX traded to within 1 penny of our lowered target before backing off. Traders are not enthused with IBM earnings and the S&P 500 futures are currently down about -8 points from their 4:00 PM close. This is sure to put pressure on ELX in the morning. Today's pullback in the morning was on significantly lighter volume than the afternoon rally which is good for a bullish case. Our stop is below the primary upward trend line and I expect this hold. I've adjusted the targets above which are key levels to consider tightening stops or taking profits.

7/17: ELX sold off hard today and the stock closed below its 20-day SMA. Conservative traders may want to consider exiting on any strength and I have listed two lowered targets that are areas readers should consider exiting or tightening stops. The stock is trading in a short term upward channel and has trend line support below so I am confident these targets can be hit. On Friday's pullback volume was lighter than the break out days on Wednesday and Thursday so this is a good sign. I've adjusted the stop down so that it is below the primary upward trend line. NOTE: I view this as a potentially volatile trade so please use proper position size to limit risk. Current Position: Long ELX stock, entry was at $9.75

Options Traders: October $10.00 CALLS

Entry on July 15, 2010
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 1.76 million
Listed on 7/14/10

Intrepid Potash, Inc. - IPI - close 22.17 change -0.31 stop 20.90

Target(s): 22.85, 23.20, 23.80
Key Support/Resistance Areas: 23.25, 22.00, 21,00
Time Frame: 1 to 2 weeks

7/19: IPI traded to within 6 cents of our entry before bouncing. I anticipate getting filled tomorrow. Futures are down in the aftermarket so readers may want to consider entering at a lower price in the $21.50 to $21.60 area. Our official entry remains at $21.80 which is -1.5% lower than current prices.

7/17: Ag stocks are gaining momentum and I like IPI on any further weakness. IPI has longer term support/resistance at $22.00 and $21.00. The stock broke below those areas during the weakness in the early July but has since rebounded and broken out of the resistance on strong volume. The stock retreated from its 50-day SMA on Friday on significantly lighter volume. I'm looking for a little more pullback and suggest readers initiate long positions if IPI trades down to $21.80. Our stop will be $20.90 which is below the 20-day SMA and the important $21.00 support level.

Suggested Position: Long IPI stock if it trades to $21.80

Suggested Position: Buy August $22.00 CALLS, current ask $1.30, estimated ask at entry $1.10

Entry on July xx
Earnings Date 8/4/10 (unconfirmed)
Average Daily Volume: 1.0 million
Listed on 7/17/10

Merck & Co - MRK - close 35.80 change -0.11 stop 35.38 *NEW*

Target(s): 36.30, 36.55, 36.95, 37.45
Key Support/Resistance Areas: 39.50, 38.75, 38.00, 36.35, 35.80
Current Gain/Loss: -0.14%
Time Frame: 1 to 2 weeks
New Positions: Yes, with the tighter stop

7/19: MRK had a relatively quiet day and remains above its 200-day, 50-day, and 20-day SMA's. My comments from below have not changed.

7/17: MRK broke out to new daily highs on Friday not seen since April but the breakout failed and the stock looks vulnerable to the down side. The stock has long term horizontal support between $35.80 and $35.60 and its 20-day, 100-day, and 200-day SMA's (all right at $35.60) are below Friday's closing price. This should provide support for the stock but if this sell-off gains steam I doubt MRK can hang in at these levels. If this support is broken the next stop will most likely be somewhere just below $35.00 which could also set-up an inverse head and shoulders pattern(see ovals on chart). This area is also near an upward trend line and its 50-day SMA. So the question is should we adjust our stop down a bit and sit through a -2% to -3% pullback if the $35.60 support level breaks? Considering the broad market sell off on Friday when even the more defensive sectors like pharmaceuticals were down over -2%, I say no. I am going to keep a tight leash on this trade and raise the stop to $35.38 while also bringing down the targets to see if we can make this a winner. MRK may go test the aforementioned SMA's prior to bouncing and I suggest we sell positions into strength using the above targets. These are good areas to consider tightening stops to see how much we can get out of the position.

7/13: MRK closed above resistance of $36.35 and looks like it is headed towards our targets. If the broader market continues bouncing we should have no issues hitting our target(s) and MRK could also act as a defensive play if there is a pullback.

Current Position: Long MRK stock, entry was at $35.85

Options Traders: August $36.00 CALLS

Entry on July 12, 2010
Earnings Date 7/30/10 (unconfirmed)
Average Daily Volume: 18 million
Listed on 7/10/10

BEARISH Play Updates

Lululemon Athletica Inc. - LULU - close 37.89 change -0.11 stop 40.42

Target(s): 38.00 (hit), 37.35, 35.80, 34.55
Key Support/Resistance Areas: 42.25, 39.75, 37.00, 35.16, 32.75
Current Gain/Loss: +3.22%
Time Frame: 1 week
New Positions: Yes

7/19: LULU came within 8 cents of our 2nd target where it found support and reversed higher. As such I'm going to raise the target 10 cents to $37.35. We currently have +3.2% gains and the new target will produce a +4.6% gain. LULU is getting close to touching its a upward trend line from last July and the next target is a good place to tighten stops to see if we can get more out of the trade. If LULU breaks this trend line the stock could pick-up steam to the downside towards the 200-day SMA.

7/17: My comments from 7/15 haven't materially changed so I am adding to them in the 7/17 post. LULU is being contained by its 20-day and 50-day SMA's and the backside of its broken upward trend line that began in February. I expect this resistance to hold and LULU to turn lower. Friday's -4% decline took away 6 prior days gains. Our target of $38.00 was hit on Friday but I am looking for more downside. $37.25 is now the immediate target below but if LULU breaks its upward trend line that began last July this could gain steam to the downside towards the 200-day SMA. I've tightened the stop to $40.42.

Current Position: Short LULU stock, entry was at $39.15

Option Traders: August $35.00 PUTS

Entry on July 12, 2010
Earnings 9/9/2010 (unconfirmed)
Average Daily Volume: 1.89 million
Listed on July 1, 2010

PowerShares QQQQ Trust - QQQQ - close 44.72 change +0.38 stop 46.10

Target(s): 44.40 (hit), 43.75, 43.25, 42.55
Key Support/Resistance Areas: 46.77, 45.25, 44.46, 43.50, 42.50, 41.00
Current gain/loss: -0.95%
Time Frame: 1 weeks
New Positions: Yes

7/19: The NASDAQ 100 futures are down over -1% compared to the 4:00 PM close after IBM and Texas Instruments earnings. This should put pressure on QQQQ and get the ETFF moving towards our more aggressive targets. As these targets approach I suggest readers tighten stops to see how much more we can get out of the position.

7/17: QQQQ hit our target of $44.40 and we are now approaching breakeven on the trade. I've moved the stop down to $46.10 which just above last week's highs. I'm comfortable giving this some room to work and suggest we ride it as far down as we can. Friday didn't really give us a good reference point to place a tighter stop but there is an intraday congestion area between $45.00 and $45.40 so a tighter stop could be placed above there. QQQQ may bounce and retrace some of Friday's losses but I expect the selling to resume. I've adjusted the targets above and suggest readers tighten stops as they are hit to protect against a reversal. $43.25 is a high area of interest to tighten stops or take profits. This level should give us a nice +30% gain.

Current Position: Short QQQQ stock, entry was at $44.30

Options Traders: August $45.00 PUTS

Entry on July 8, 2010
Earnings N/A (unconfirmed)
Average Daily Volume: 100 million
Listed on July 7, 2010

Starbucks Corp. - SBUX - close 25.49 change +0.14 stop 26.05 *NEW*

Target(s): 25.30 (hit), 25.00, 24.85, 24.40
Key Support/Resistance Areas: 26.50, 26.00, 25.25, 24.80, 24.00, 23.60, 22.50
Current Gain/Loss: -2.99%
Time Frame: 1 to 2 days
New Positions: No

7/19: SBUX reports earnings after the bell on Wednesday and I suggest readers exit positions prior to the close on Wednesday. Today the stock was down about -1% in early trading and I'm looking for more weakness tomorrow. We have 3 near term targets listed above which are good areas to consider exiting positions tightening stops to ride this down as far as we can prior to earnings. For options traders, I strongly encourage you to exit prior to earnings as the volatility could get sucked out of the premium.

7/17: On Friday morning SBUX closed its gap lower on 6/29 (referred to in the update below) and then took a nose dive and closed its gap higher from 7/13. All of the stock's weekly gains were essentially erased with Friday's -3% loss. Similar to the Q's above SBUX didn't give us a good reference point on Friday to place tighter stop so I have moved the stop down to the top of last week's congestion area at $26.05. This should be enough room to see how far we can ride SBUX back down so we can turn this trade into a winner. The targets can be used as a guide to for potential bounce points on the way down.

Current Position: Short SBUX stock, entry was at $24.25

Options Traders: August $25.00 PUTS

Entry on July 8, 2010
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on July 3, 2010

Kilroy Realty Corp - KRC - close 30.00 change +0.30 stop 31.30

Target(s): 29.10, 28.55, 27.90
Key Support/Resistance Areas: 31.00, 29.00, 28.30, 27.80
Final Gain/Loss: +2.51%
Time Frame: 1 to 2 weeks

7/19: KRC traded to our entry trigger of $29.85 at the open and then proceed to sell-off to our target of $29.10 so we are flat the position for a +2.50% gain. In the play release I mentioned that the $29.10 target should be paid attention to as a possible exit but if the if the broader market was weak then KRC should trade down to $28.55. KRC was trading significantly weaker than the broader market when our target was hit. In addition, the stock and the broader market were printing reversal bars which added to the signals to exit positions at our first target. I still believe KRC is a stock that can be shorted and it should print $29.10 again and possibly lower prices. But again, the broader market weakness will most likely determine how far this can go. Futures are down in the aftermarket so weakness tomorrow may give readers a second chance to exit this position for a profit.

7/17: KRC broke down hard from testing its 20-day and 200-day SMA's from below. The stock has been trading in a downward channel for the past three months and appears to be making a lower high. I suggest readers initiate short positions at $29.85 and use a stop of $31.30 which is above last week's highs. I view this trade as potentially being quick and have listed 3 near term targets that can be used as a guide to exit positions or to tighten stops to protect profits. $29.10 is the near term target which is just above the June 8 low. This level might be viewed by some as an inverse head and shoulders so it should be paid attention to when managing stops. However, if the broader market is weak it shouldn't act as too much support and KRC should trade down to $28.55 relatively easy.

Suggested Position: Short KRC stock if it trades to $29.85.

Options Traders: August $30.00 PUTS, current ask $1.90 estimated ask at entry $1.70

Annotated chart:

Entry on July 19
Earnings 8/2/10 (unconfirmed)
Average Daily Volume: 731,000
Listed on July 17, 2010