Editor's Note:
I'm filling in for Scott tonight. Please note a few adjustments to our entries and stop losses.


Current Portfolio:

BULLISH Play Updates

Boyd Gaming - BYD - close 8.02 change -0.29 stop 7.28

Target(s): 8.95, 9.20, 9.50
Key Support/Resistance Areas: 9.60, 9.25, 8.75, 8.00, 7.40
Time Frame: 1 to 2 weeks

10/14 (James): Our wait is over. Shares of BYD saw some profit taking today with a -3.4% decline. Traders bought the dip near support at $8.00 and its rising 10-dma. The low was $7.89, which was pretty close to the 38.2% Fibonacci retracement of the three-week rally. Our trigger to buy BYD stock was hit at $8.20. We're using a stop loss at $7.28. More conservative traders may want to consider raising their stop toward the $7.50 level, which is both psychological support and the 50-dma. Our first target is $8.95.

10/9: August Casino revenue was up +11.5% y/y in Las Vegas which bodes well for other regions following. BYD operates in Las Vegas and other parts of the country. The stock broke out on Friday on huge volume and I believe it will head towards $9.00 in the next week or two. I would like to see some retracement and use $8.10 (prior resistance area from mid-August) as a trigger to enter long positions. Our first two targets are +10% and 13.5% higher than the trigger.

Triggered on Thursday

Current Position: Long BYD stock @ $8.20

Annotated chart:

Entry on October 14
Earnings 10/27/10 (unconfirmed)
Average Daily Volume: 1.8 million
Listed on October 9, 2010

Itron, Inc - ITRI - close 62.50 change -0.05 stop 57.45 (varies)

Target(s): 63.75, 65.00
Key Support/Resistance Areas: 66.00, 64.00, 60.50, 59.00, 57.00
Time Frame: 1 to 3 weeks

10/14 (James): So far we're still waiting on an entry point in ITRI. Shares held up pretty well with bulls immediately buying the dip this morning near $61.60. The trend is up but the stock is struggling with resistance near $63.00 and its exponential 200-dma. If you don't mind I would like to adjust our entry point strategy. Let's plan on buying the dip at $60.25, not 61.00 and if triggered at $60.25 we'll move the stop loss to $57.45.

Plus, just in case ITRI does not correct, I'd like to use a trigger to buy a breakout at $63.55. If this trigger is hit we'll move the stop loss to $59.49. The 200-dma near $65 is probably overhead resistance but I would aim for resistance near $67.50.

Suggested Position: Long ITRI stock if it trades down to $60.25
- or - buy a breakout at $63.55 (stop loss 59.45).

Options Traders: Buy November $60.00 or $65.00 calls depending on the entry point.

Entry on October XX
Earnings 10/28/2010 (unconfirmed)
Average Daily Volume: 412,000
Listed on October 4, 2010

PerkinElmer, Inc - PKI - close 23.30 change -0.22 stop 22.35

Target(s): 24.25, 24.85, 25.35
Key Support/Resistance Areas: 25.40, 24.40, 23.30, 22.50
Current Gain/Loss: +0.17%
Time Frame: 1 to 2 weeks
New Positions: Yes

10/14 (James): It looks like PKI experienced some minor profit taking on Thursday. The trend is still up. Volume was very low on today's pullback, which is a positive signal for us. I would still consider new positions here or near $23.00. More conservative traders could wait for the next bounce.

10/12: We got the dip in PKI to $23.10 so we are long the stock. My comments below remain valid.

10/11: PKI has been in a solid uptrend since its July lows and is finding resistance at $23.30. The stock is forming a high tight ascending triangle and looks poised to breakout and retest its 52 week highs which are more than +8% higher than current levels. Conservative traders may want to wait for a break above today's high and enter positions at $23.50, while more nimble traders could try to time a pullback into the $23.00 area or its 20-day SMA. Officially, we'll use a trigger of $23.10 (just above today's low) or $23.50 (just above today's high), whichever occurs first. The stock is consolidating above its 20-day SMA (currently $22.81 and rising) and an upward trend line. Our stop is just below the recent swing low which will keep losses under control if the pattern fails.

Current Position: Long PKI stock, entry was at $23.10

Entry on October 12, 2010
Earnings 11/4/10 (unconfirmed)
Average Daily Volume: 1.4 million
Listed on October 11, 2010

Thompson Creek Metals - TC - close 11.68 change +0.12 stop 10.45

Target(s): 11.75, 12.40
Key Support/Resistance Areas: 12.60, 11.80, 11.00, 10.55
Current Gain/Loss: +2.15%
Time Frame: 1 to 3 weeks
New Positions: Yes, on pullbacks

10/14 (James): Commodity-related stocks continue to show relative strength. TC managed to tag another new relative high on an intraday basis. The +1% gain today outperformed the broader market. Personally I would prefer to look for a dip near $11.15-11.00 or a bounce in this area before launching new positions.

10/13: TC hit our first target at $11.75.

10/9: It seems there is no stopping the basic materials sector as the lackluster employment report is sure to be followed by additional stimulus. Molybdenum is high strength metal and is used to make aircraft parts, electrical contacts, industrial motors and filaments to name a few. Technically, TC broke through resistance near $11.00 and touched its 200-day SMA on Friday. I would like to see the stock retrace some of those gains and suggest we enter long positions with a trigger of $11.10 which is -18 cents lower than Friday's close. Our targets are about +6% and +11.5% higher than our trigger.

Current Position: Long TC stock, entry was at if it trades $11.10

Options Traders: Buy November $11.00 CALL

Entry on October 12
Earnings 10/4/2010 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on October 9, 2010

BEARISH Play Updates

FLIR Systems - FLIR - close 25.54 change -0.02 stop 27.05 *new*

Target(s): 24.25, 21.00
Key Support/Resistance Areas: 28.00, 27.00, 26.50, 25.50, 24.00
Current Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

10/14 (James): Attention! I am adjusting our entry point on FLIR. Our plan was to launch bearish positions when FLIR bounced to $25.85. Shares hit $25.81 this morning and then faded lower. I am suggesting we go ahead and launch bearish positions now. However, this can be a very volatile stock and readers may want to start with small positions first and add to it as the play progresses. More conservative traders may want to wait. Obviously a failed rally near $26.00 or even the 50-dma near $26.50 would be a much more attractive entry point. Please note I'm adjusting our stop loss to $27.05.

New Entry Point.

Current Position: Short FLIR stock @ $25.54, stop loss @ $27.05
(I'll adjust our entry point for Friday's open)

Annotated chart:

Entry on October 15
Earnings Date 10/21/10 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on October 2nd, 2010

Microsoft - MSFT - close 25.23 change -0.11 stop 25.72

Target(s): 23.50, 23.10
Key Support/Resistance Areas: 25.50, 24.75, 23.75, 23.00
Current Gain/Loss: -1.35%
Time Frame: 1 to 2 weeks
New Positions: Neutral

10/14 (James): Everyone has an opinion and some people are more than happy to share it with you even if you don't want it. Well, my opinion is that MSFT isn't a bearish candidate right now. Personally, the bullish breakout on Wednesday was our signal to exit. However, the stock still has resistance near $25.50. If MSFT does not show any weakness on Friday (tomorrow) I will close this trade. Actually, I'm starting to think MSFT might be a long-term (call LEAPS) trade.

10/7: Microsoft hit our target to enter short positions at $24.50. The New York Times released an article today speculating that MSFT may make a bid for Adobe (ADBE). More often the acquiring company (MSFT) struggles on news of an acquisition. However, investors have been hammering MSFT to use their cash to better position the company for growth. If this turns out to be true it could be what investors want to hear which could spark buying of the stock. We have a stop in place if that in fact happens but readers should use caution.

Suggested Position: Short MSFT stock if it trades to $24.65

Options Traders: Long November $24.00 PUT

Entry on October 7, 2010
Earnings: 10/28/10 (unconfirmed)
Average Daily Volume: 60 million
Listed on October 5, 2010

SanDisk Corp - SNDK - close 38.70 change -1.24 stop 42.20

Target(s): 38.15, 37.10, 35.60
Key Support/Resistance Areas: 41.00 to 40.00, 38.00, 36.00
Time Frame: 1 to 2 weeks
New Positions: NO

10/14 (James): Hmm... I think both bulls and bears have a case for SNDK. Bigger picture the pattern looks kind of ominous. Short-term the trend of higher lows is certainly bullish. Traders bought the dip near $38.00 on Thursday and the simple 200-dma could also offer some additional support. I am not suggesting new positions of any kind in SNDK at the moment.

Prior comments:
SNDK has rallied right into a prior support level in the $40 to $41 area which was a shelf before the stock cratered in August. This is the first time the stock has rallied back to test the prior support level and I expect it to act as resistance. Further, the stock has rallied right into a primary downtrend line which should provide additional resistance. Nimble traders may want to time a bounce of another 50 cents or so higher (near $40.65) but I'm not convinced we will get it. I suggest we open positions at current levels and target a $2 to $3 move lower, which is -5% to -7.5% lower than current levels.

Current Position: Short SNDK stock, entry was at $40.59

Entry on October 13, 2010
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 11 million
Listed on October 12, 2010

Xilinx, Inc. - XLNX - close 26.48 change -0.09 stop 27.42

Target(s): 25.00, 24.60, 24.30
Key Support/Resistance Areas: 26.75, 26.00, 25.30, 25.00, 24.00
Current Gain/Loss: -3.99%
Time Frame: 1 to 2 weeks
New Positions: Yes

10/14 (James): I am somewhat neutral on XLNX at the moment. I do see plenty to worry about. The MACD is about to roll over into a new sell signal. The simple 50-dma is about to perform a "death cross" and slip under the 200-dma, which is normally a very bearish event. RSI is rolling over. On Wednesday the stock produced a failed rally at $27.00. However, at the same time XLNX has a bullish trend of higher lows dating back to late August. If you're going to launch new bearish positions consider using a very tight stop loss!

10/12: XLNX touched its primary downtrend line today so this is the logical spot for the stock to turn lower. There were mixed earnings results from the semi's after the bell. Intel beat slightly while Linear Technology lowered guidance. We'll have to see how the sector trades tomorrow. Our stop is in place if XLNX breaks higher. My comments below remain valid.

Current Position: Short XLNX stock, entry was at $25.80

Options Traders: Long November $25.00 PUT

Entry on October 7, 2010
Earnings: 10/20/10 (unconfirmed)
Average Daily Volume: 7.3 million
Listed on October 6, 2010