Editor's Note:
I'm filling in for Scott tonight who will return on Monday.


Current Portfolio:

BULLISH Play Updates

Boyd Gaming - BYD - close 7.68 change -0.34 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

10/16 (James): Uh-oh! BYD was showing some relative weakness on Friday. We were expecting a pull back but the $8.00 level should have offered stronger support. While I do think BYD has put in a bottom with the September low, I am somewhat concerned that shares are seeing above average volume lately. Normally above average volume on the rally, like we saw in early October, is bullish but we're also seeing strong volume on the pullback, which can be bearish. On a short-term basis I would expect BYD to hit support near $7.50 and its 50-dma. Readers may want to wait for a bounce from the $7.50 level before considering new bullish positions.

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. Triggered on Thursday, Oct. 14th.

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 62.25 change -0.25 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

10/16 (James): We are still waiting for an entry point. There are no changes from my Thursday comments, which include an alternative entry point. FYI: ITRI is due to report earnings on October 27th, after the closing bell. Wall Street expects a profit of $0.84 a share.

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.

Annotated chart:

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

PerkinElmer, Inc - PKI - close 23.21 change -0.09 stop 22.35

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

10/16 (James): There hasn't been any news on PKI lately and shares aren't moving much as they consolidate sideways. Traders bought the dip again at short-term technical support near the 10-dma and 20-dma on Friday. The trend is up but stochastics are suggesting this rally is losing steam. Yet that doesn't mean PKI can't keep climbing. Cautious traders might want to tight stops closer to the $22.50 level. I am a little concerned that PKI appears to be forming a bear-wedge pattern. Readers may want to keep their position size small. FYI: This company is due to report earnings on Nov. 4th. Analysts are estimating a profit of 29 cents a share.

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.

10/11: 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

Annotated chart:

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 11.61 change -0.07 stop 10.45

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

10/16 (James): There is no change from my Thursday comments on TC. The stock saw a little volatility on Friday morning but consolidated sideways into the weekend. A pull back toward the $11.15-11.00 zone should be a new bullish entry point.

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

Annotated chart:

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 25.79 change +0.25 stop 27.05

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

10/16 (James): On Thursday night I adjusted our entry point to launch bearish positions immediately. FLIR gapped open higher on Friday morning at $25.81 (Thursday's high and our new entry point). The rally failed at $26.00 but FLIR still managed a +0.9% gain, showing some relative strength. I still think this is just an oversold bounce and the overall trend is down. I would still launch positions at current levels. More conservative traders could wait and watch for a failed rally near the 50-dma instead as their entry point. FYI: FLIR is due to report earnings on Oct. 21st, before the opening bell. Analysts are expecting a profit of 38 cents a share. We normally don't like to hold over earnings. Readers may want to adjust their stops prior to the report.

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.

Current Position: Short FLIR stock @ $25.81, stop loss @ $27.05

Annotated chart:

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

SanDisk Corp - SNDK - close 39.21 change +0.51 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

10/16 (James): Some of the storage device stocks have been rising on buyout rumors. SNDK hasn't been mentioned lately as a target but the M&A rumors in the sector could lift shares anyway. I don't see any changes from my comments on Thursday. There are a lot of conflicting signals and cross currents with SNDK so we're not suggesting new positions at this time. However, the $40.00 level should be significant resistance and more aggressive traders can look for failed rallies in this area a possible entry points. FYI: SNDK is due to report earnings on Oct. 21st. The street expects a profit of $1.05 a share.

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

Annotated chart:

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 -0.00 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

10/16 (James): I am still neutral on XLNX as a bearish trade. The semiconductor index is still trying to dig its way out of a bearish trend. Bigger picture XLNX actually has a more bullish posture than the SOX index. Depending on your time frame and bias XLNX is rising in a new bullish channel or consolidating in a bear flag pattern. It is true that the 50-dma just crossed under the 200-dma (a "death cross), which is normally a very bearish development. I'll repeat my comments from Thursday: . If you're going to launch new bearish positions consider using a very tight stop loss!

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

Annotated chart:

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


Microsoft - MSFT - close 25.54 change +0.31 stop 25.72

Target(s): 23.50, 23.10
Key Support/Resistance Areas: 25.50, 24.75, 23.75, 23.00
Current Gain/Loss: -4.24%
Time Frame: 1 to 2 weeks
New Positions: Neutral

10/16 (James): I'm hitting the eject button on this MSFT play. Per my comments on Thursday, MSFT is showing too much relative strength and we wanted to exit early if shares continued to climb on Friday. Shares of MSFT are facing some resistance near $25.50 but I find toe overall pattern has turned bullish for this tech titan. We are closing this trade.

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.

Closed Position: short MSFT stock @ $24.50, closed $25.54 (-4.24%)

Annotated chart:

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