Editor's Note:
I'm filling in for Scott tonight.


Current Portfolio:

BULLISH Play Updates

Boyd Gaming - BYD - close 8.31 change -0.15 stop 7.80 *new*

Target(s): 8.65, 8.95, 9.20
Key Support/Resistance Areas: 9.60, 9.25, 8.75, 8.00, 7.40
Current Gain/Loss: +1.34%
Time Frame: 1 to 2 weeks
New Positions: Neutral

10/30 (James): BYD has spent the last four days consolidating sideways under resistance near $8.50. The overall pattern looks bullish but if the market corrects I wouldn't be surprised to see BYD retest its 50-dma (and stopping us out in the process). I hesitate to launch new positions at this time given our expectation for a market pull back later in the week. However, nimble traders could try and buy another bounce near $8.00. Please note I'm adjusting our stop to $7.80.

10/28: BYD and other casino related names did well today on the heels of a string earnings report from Las Vegas Sands. BYD gained +2.4% on the day. However, I suggest we do not get too married to this position considering the overbought broader market conditions. Let's raise the stop to $7.65, which is below the 20-day SMA and primary upward trend line. $8.65 and $8.95 are the primary targets and I suggest readers take profits or tighten stops to protect them as these levels approach.

Current Position: Long BYD stock, entry was at $8.20

Annotated chart:

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

Citigroup Inc - C - close 4.17 change -0.00 stop 3.78

Target(s): 4.60, 4.75, 4.90
Key Support/Resistance Areas: 4.30, 4.00
Current Gain/Loss: +0.24%
Time Frame: 3 to 4 weeks
New Positions: Yes

10/30 (James): Wow! If there was ever a sign that investors are just sitting on their hands look at the last four days in Citigroup. The stock closed at $4.18, $4.17, $4.17, and $4.17. I am cautious on the banking stocks. C does seem to have a little bullish channel growing but I would prefer to buy dips near the bottom of the channel (see chart).

10/28: C traded in a tight range today and closed flat on the day. My comments below have not changed.

10/27: We are long C as of today's open at $4.16. The stock should find support at its rising 20-day SMA which is currently at $4.12, or at $4.00 if that is breached. I view dips as buying opportunities.

Suggested Position: Long C stock
Options Traders: Buy December $4.00 CALL, current ask $0.30

Annotated chart:

Entry on October 27
Earnings Date More than two months (unconfirmed)
Average Daily Volume: 523 million
Listed on October 25, 2010

Hansen Natural Corp. - HANS - close: 51.21 change: -0.17 stop: 46.90

Target(s): 50.00, 52.50,
Key Support/Resistance Areas: 45.00, 47.50, 50.00, etc.
Current Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see below for details

10/30 (James): HANS is one of those stocks that has continued to run away from us. We don't want to chase it. The good news is that I'm expecting a market correction soon, following the FOMC announcement on Wednesday. The bad news is that HANS can be a volatile stock. While I agree that the $48.00 level should be support I suspect that HANS will fall further than $48. I'm adjusting our trigger to open positions to $45.50 (down from $48.25). We'll move our stop loss to $43.90. Hopefully we'll get triggered in the next week or two.

Suggested Position: BUY the stock at $45.50

- or -

BUY the December $50.00 calls (on a dip at $45.50).

Annotated chart:

Entry on October xx
Earnings Date 11/04/10 (unconfirmed)
Average Daily Volume: 4.5 million
Listed on October 16, 2010

TJX Companies - TJX - close 45.89 change -0.55 stop 44.75 *new*

Target(s): 46.70, 47.20, 47.95
Key Support/Resistance Areas: 48.50, 47.00, 45.40, 43.50
Current Gain/Loss: +0.81%
Time Frame: 2 to 4 weeks
New Positions: No

Comments :
10/30 (James): I am urging caution in TJX. The bullish breakout on October 25th lasted about four days. The action in just the last couple of days looks like a short-term bearish reversal. I would look for a pull back toward the $45.40 level again. I'm adjusting our stop loss even higher to $44.75. FYI: Earnings are due out around Nov. 16th.

10/28: TJX pulled a repeat of yesterday. After gapping higher the stock immediately sold off to support and bounced hard into the close. I am concerned about the bearish head and shoulders pattern forming on its hourly chart, while there is also a hanging man candle on its daily chart. These tend to signal reversals so I want to raise the stop to $44.55 which will keep losses small if there is in fact a reversal. $46.70 and $47.20 are my primary targets and suggest readers consider taking profits and/or tightening if they are reached.

Suggested Position: Long TJX stock if it trades to $45.52

Annotated chart:

Entry on October xx
Earnings Date 11/16/10 (unconfirmed)
Average Daily Volume: 3 million
Listed on October 18, 2010

BEARISH Play Updates

Leggett & Platt, Inc. - LEG - close 20.38 change +0.02 stop 21.75

Target(s): 19.80, 19.20
Key Support/Resistance Areas: 22.00, 21.70, 21.50, 21.30, 20.55, 19.70, 19.00
Current Gain/Loss: +0.54%
Time Frame: 1 to 3 weeks
New Positions: No

10/30 (James): Whew! LEG's chart is ugly but I'm not sure I would launch new bearish positions at these levels. There has not been much of an oversold bounce yet and that's a positive for us. At the same time, how much of the bad news has already been factored in? The path of least resistance is probably down but I might wait for a new failed rally before considering new positions.

10/25: LEG triggered our entry for bearish positions at 20.49 as the selling continued and the stock broke below Friday's low. We are looking for a quick move towards the July and August lows. I've lowered the stop $21.75 and raised our targets by 10 cents each. My comments from the play release are below.

10/23: Shareholders of LEG have been taken on a wild ride as of late. After plummeting -24% from its May highs to August lows, the stock went up in a straight line until 10/13, gaining +26% along the way. On Thursday after the bell the stock reported earnings and they were terrible. The company missed earnings, missed revenues, and lowered guidance. The company said that "certain markets primarily related to residential furnishings, weakened noticeably in the third quarter and as a result, third quarter sales were lower than those in the second quarter, which rarely occurs." The stock lost -8% on Friday and I do not believe the selling is done. I suggest we capitalize on the momentum and initiate short positions if LEG trades to $21.46 (above Friday's high and near the 200-day SMA) or breaks below $20.49 (below Friday's low). Conservative traders may want to wait for the break down. All of the moving averages are overhead and I suspect there are still many unhappy investors looking to dump the stock. We'll place a tight initial stop overhead at $22.05.

Current Position: Short LEG stock, entry was at 20.49
Options Traders: BUY the December $20.00 PUT, current ask $0.75

Annotated chart:

Entry on October 25, 2010
Earnings Date: More than two months (unconfirmed)
Average Daily Volume: 1.5 million
Listed on October 23, 2010

Mechel OAO - MTL - close 23.55 change +0.72 stop 24.65 *new*

Target(s): 22.30, 21.25, 20.25
Key Support/Resistance Areas: 24.25, 24.00, 23.60
Current Gain/Loss: -1.07%
Time Frame: 1 to 3 weeks
New Positions: Yes

10/30 (James): Bingo! MTL has rebounded back toward short-term resistance near $23.50 and its 200-dma. Our trigger to launch bearish positions was hit at $23.30. If you missed the entry point I would still consider bearish positions today or you could wait for a bounce toward $24.00 and technical resistance at its 50-dma. Please note I am adjusting the stop loss to $24.65.

10/28: I was hoping for a bounce up towards MTL's 200-day SMA but it doesn't appear we are going to get it as the stock is hanging out in a bear flag. Let's lower the trigger to $23.30 which near is today's highs. My comments from the play release below remain valid.

Current Position: Short MTL stock, entry @ $23.30
Options Traders: Long December $23.00 PUT (entry @ $1.30)

Annotated chart:

Entry on October 29, 2010
Earnings Date: More than two months (unconfirmed)
Average Daily Volume: 2.1 million
Listed on October 27, 2010


Companhia Brasileira de Distribuicao - CBD - cls: 39.61 chg: +2.09 stop: 34.75

Target(s): 38.80
Key Support/Resistance Areas: 35.25, 36.50, 38.00, 39.00
Current Gain/Loss: +7.78%
Time Frame: 4 to 6 weeks
New Positions: NO

10/30 (James): Bingo! Target achieved and more. Shares of CBD rallied +5.5% on Friday closing at new highs. Our target to exit was $38.80 so the play is closed.

Readers will want to keep CBD on their watch list. I would like to open new positions on a dip back toward the $37.00 area.

Closed Position: Long CBD stock, entry @ $36.75, exit @ 38.80 (+5.5%)

Annotated chart:

Entry on October 19, 2010
Earnings Date 11/10/10 (unconfirmed)
Average Daily Volume: 545,000
Listed on October 16th, 2010

Jeffries Group, Inc - JEF - close 23.93 change -0.07 stop 22.75

Target(s): 25.00, 25.75
Key Support/Resistance Areas: 25.85, 25.25, 24.25, 23.50, 23.00
Current Gain/Loss: -0.17%
Time Frame: 3 to 4 weeks
New Positions: Yes

10/30 (James): I am cautious on the financials and given my expectation for the market to see a widespread correction later this week I want to exit any positions that look vulnerable. JEF has just produced a couple of failed rallies near its trendline of lower highs so I am suggesting an early exit! Closed Position: Long JEF stock, entry @ $23.97, exit @ $23.93 (-0.17%)
Options Traders: Long December $24.00 CALL

Annotated chart:

Entry on October 21, 2010
Earnings Date 1/20/11 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on October 19, 2010

Patriot Coal - PCX - close 13.49 change +0.10 stop varies

Target(s): 15.25, 15.95
Key Support/Resistance Areas: 15.30, 14.15, 13.00, 12.50
Current Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see entry point below

10/30 (James): I am dropping PCX for nonperformance. Shares haven't moved and remain under resistance near $14.00. I would still be tempted to keep it on your watch list just in case shares dip and bounce near $12.00 and its 50-dma.

Play never opened!

Annotated chart:

Entry on October xx
Earnings Date More than two months (unconfirmed)
Average Daily Volume: 3.6 million
Listed on October 26, 2010

PerkinElmer, Inc - PKI - close 23.45 change +0.19 stop 22.32

Target(s): 23.60 (hit), 23.90, 24.40
Key Support/Resistance Areas: 25.40, 24.40, 23.30, 22.50, 22.15
Current Gain/Loss: +1.52%
Time Frame: 1 to 2 weeks
New Positions: No

10/30 (James): Upward momentum in PKI has stalled. I am suggesting we exit this position now to avoid the market pullback later this week. Plus, I want to make room for more candidates when we buy the market dip.

Closed Position: Long PKI stock, entry @ $23.10, exit @ $23.45 (+1.5%)

Annotated chart:

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