Editor's Note:
The short squeeze that started on Friday continued into Monday's session.

Our bearish plays CTRP and GRPN were stopped out. We have closed MGM as planned. GMCR is open. We are planning to close JAH at the open tomorrow.

Current Portfolio:

BULLISH Play Updates

Jarden Corp. - JAH - close: 47.64 change: +0.09

Stop Loss: 46.50 (new)
Target(s): 49.00
Time Frame: 6 to 8 weeks
Earnings Date 07/24/12
Average Daily Volume = 652 thousand
Listed on July 26, 2012
New Positions: Yes, see below

08/06/12 update: JAH spiked higher intraday and hit $48.50 but our exit target was $49.00. Now our trade is over. The plan is to exit positions at the open on Tuesday morning.

Position: Long JAH Stock @ $45.55 on July 27th.

08/06/12 prepare to exit at the open on Tuesday morning (tomorrow)

Sandisk Corp. - SNDK - close: 41.48 change: +0.11

Stop Loss: 40.35
Target(s): 49.75
Time Frame: 4 to 6 weeks
Entry on July 30 at $ 42.75
Earnings Date 07/20/12 (past)
Average Daily Volume = 4.5 Million
Listed on July 28, 2012
New Positions: Yes, see below

08/06/12 update: SNDK is not making much progress. The stock remains stuck under technical resistance at its 150-dma (near $42.00). The fact that SNDK did not participate with the market's big bounce on Friday and today is worrisome.

Friday's high was $42.22. I'd probably wait for a rally past $42.30 before considering new positions.

Suggested Positions:

Long SNDK stock @ $42.75


Long SNDK Sept $44 Call, @ $2.28

08/06/12 adjust the exit target to $49.75
07/30/12 triggered at $42.75

BEARISH Play Updates

Apollo Group - APOL - close: 27.24 change: +0.58

Stop Loss: 28.60
Target(s): 21.00
Current Gain/Loss: unopened
Time Frame: 4 to 6 weeks
Entry on Aug xx at $ xx.xx
Earnings Date 09/24/12
Average Daily Volume = 1.7 Million
Listed on August 2, 2012
New Positions: Yes, see below

08/06/12 update: The short squeeze in APOL continued this morning with a spike toward $27.49 right off the bat. Shares spent the rest of the day drifting sideways. We are still on the sidelines waiting for a breakdown. Our trigger to open bearish positions is at $25.75.

Earlier Comments:
Apollo is a for-profit education company. The companies have been trashed recently and the release of a Senate report last week was especially harsh on the group. Included in that group are APOL, BPI, COCO, DV, STRA and LOPE.

The Senate report (249 pages) said these colleges failed to give students a reasonable bang for their bucks. Since they are all taxpayer funded that means we are paying for their education. Unfortunately 64% of students trying to get an associate's degree end up dropping out. The colleges spend nearly 25% of their revenue on marketing and basically dragging any candidate with a pulse into the program to get Federal funding for that student. Because the students are lobbied so heavily to sign up there is an inordinate number that give up quickly as opposed to those attending a regular college because they want to be there. Degrees at these for-profits cost an average of 19% more than at regular schools. The report found that the average salary of an executive at these colleges was $7.3 million a year. This makes me want to go teach investment education somewhere but I bet teachers are closer to minimum wage. The Federal government ends up paying 80% of the tuition bill at these colleges as a result of various student loan programs and veteran programs. The report urged stronger rules, additional oversight and requirements for graduation in order to obtain funding. Basically these colleges have run into a buzz saw of lawmaker hostility. Odds are good there will be additional regulation and scrutiny of their admission procedures. Apollo is trading at an 11 year low.

Bearish Trigger @ 25.75

Suggested Position: Short APOL stock @ $25.75


Buy APOL Sept $25 Put

EZCORP, Inc. - EZPW - close: 22.53 change: +0.04

Stop Loss: 22.85
Target(s): 20.05
Time Frame: 3 to 4 weeks
Entry on Aug 1st at $ 21.80
Earnings Date 07/24/12
Average Daily Volume = 381 thousand
Listed on July 26, 2012
New Positions: see below

08/06/12 update: Whew! That was a close one. EZPW came awfully close to hitting our stop loss at $22.85 today. The spike higher faded and EZPW spent the rest of the day drifting sideways. I am not suggesting new positions at this time.

Earlier Comments:
You might think that with the U.S. economy struggling and unemployment still elevated that pawnshops would be doing strong business. Instead EZPW is struggling to meet its numbers. The company recently reported earnings and missed both the top and bottom line estimate. Furthermore management lowered their earnings guidance for 2012. FYI: The Point & Figure chart for EZPW is bearish with a long-term $10 target.

Suggested Position: short EZPW stock @ $21.80

- or -

Long the Sep $20 PUT (EZPW1222U20) @ $0.50

08/02/12 opened @ 21.80

GMCR - Green Mountain Coffee - close: 21.47 change: -0.16

Stop Loss: 24.35
Target(s): 18.00
Current Gain/Loss: + 0.7%
Time Frame: 4 to 6 weeks
Entry on August 6 at $21.62
Earnings Date 08/2/12
Average Daily Volume = 9.7 Million
Listed on August 4, 2012
New Positions: see below

08/06/12 update: Our new GMCR trade has been opened. The plan was to launch positions when shares went negative on the day. Thus our trade opened at $21.62. The stock did seem to bounce when it hit its simple 50-dma. More conservative traders may want to wait for a new drop under today's low ($20.82) before initiating positions. GMCR can be a very volatile stock so readers will want to keep their position size small.

Earlier Comments:
GMCR recently reported earnings. Revenue rose +21% to $869 million but the +37% growth rate for the prior quarter declined to +31% in Q2. That may not seem like a major decline but it gets worse. The company cut its guidance for both revenue and earnings for the rest of the year. They now project only 15-20% revenue growth compared to the mid to high double digits of prior years when growth was over 50% or even 70%. The business is definitely declining as their competition increases and their patents on the k-cups expire. Not commonly reported in the press the company booked $2.99 million in charges for the quarter related to an SEC inquiry into their accounting practices. There was no mention if the inquiry was completed or ongoing. I suspect if it had been completed they would have been eager to announce it and remove the cloud. Also, inventory grew by 60% in the quarter. For a company where sales are slowing it seems strange they would let inventory increase that rapidly. They also announced they would likely have NEGATIVE free cash flow during 2012 but generate $100-$150 million in 2013. Again, exactly how are they going to do that with the business declining so rapidly? In a grasping at straws effort they announced a $500 million share repurchase. Makes you wonder where they are going to get that cash since they are going to be cash flow negative for 2012. Of course announcing a share repurchase and actually carrying it out are two different things. The announcement may boost your stock temporarily but if you don't buy shares it will only be a temporary bounce.

current Position: Short GMCR stock @ $21.60

- or -

Long GMCR Sept $20 Put entry @ $1.40

08/06/12 trade opened.

Ingram Micro - IM - close: 15.05 change: +0.54

Stop Loss: 15.25
Target(s): 12.00
Time Frame: 6 to 8 weeks
Entry on August 2nd at $ 14.60
Earnings Date 08/09/12
Average Daily Volume = 1.3 Million
Listed on August 1, 2012
New Positions: see below

08/06/12 update: IM is not a heavily shorted stock but today's +3.7% gain definitely looked like short covering. Shares narrowly missed hitting our stop loss at $15.25. If there is any follow through higher tomorrow our play will likely be closed. The stock managed to close just under short-term technical resistance at the 10-dma. I am not suggesting new positions at this time.

Trigger @ 14.60 hit 8/2/12

Suggested Position: Short IM stock @ $14.60

Premiums on options are skewed so shorting is the only play.

08/02/12 triggered @ 14.60


CTrip.com. - CTRP - close: 13.47 change: +0.50

Stop Loss: 13.25
Target(s): 10.25
Time Frame: 4 to 6 weeks
Entry on July 30 at $ 13.15
Earnings Date 07/24/12
Average Daily Volume = 2.8 Million
Listed on July 28, 2012
New Positions: see below

08/06/12 update: Chinese stocks rallied sharply today. That's what drove shares of CTRP higher. The stock hit our stop loss at $13.25. The long-term trend is still down but we'll have to wait for a new entry point before considering bearish positions again.

Position: short CTRP stock @ $13.15 stopped @ 13.25 (-0.8%)

- or -

Dec $12 PUT @ $1.10 exit $1.00 (-9.0%)

08/06/12 stopped out at $13.25
07/30/12 triggered @ 13.15 (at 10:40 a.m.)

CTRP Chart

Groupon, Inc. - GRPN - close: 7.25 change: +0.66

Stop Loss: 6.75
Target(s): 6.25
Entry on July 09 at $8.40
Time Frame: exit prior to the Aug. 13th earnings report
Earnings Date 08/13/12 (confirmed)
Average Daily Volume = 8.1 million
Listed on July 07, 2012
New Positions: No

08/06/12 update: Two days of market-wide gains was too much for shorts in GRPN. The stock saw some short covering this morning and shares rallied +10%. Our stop loss was hit early this morning at $6.75.

closed Position: short GRPN stock @ $8.40 exit $6.75 (+19.6%)

- or -

Aug $8.00 PUT (GRPN1218T8) Entry $0.80 exit $1.35 (+68.7%)

08/02/12 lowered stop to $6.75.
07/27/12 lowered stop to $8.25.
07/18/12 readers may want to start taking some money off the table
07/12/12 new stop loss @ 9.05

GRPN Chart

MGM Resorts - MGM - close: 9.38 change: +0.12

Stop Loss: 9.65
Target(s): 8.10
Entry on July 23 at $9.69
Earnings Date 08/07/12 (confirmed)
Average Daily Volume = 8.9 million
Listed on July 21, 2012
New Positions: No

08/06/12 update: Our time has run out for this trade. Our plan was to close positions at the closing bell tonight to avoid holding over MGM's earnings tomorrow morning. Although the rally today almost stopped us out.

closed Position: short MGM stock @ $9.69 exit $9.38 (+3.2%)

- or -

Aug $9.00 PUT (MGM1218T9) Entry $0.27 exit $0.24 (-11.1%)

MGM Chart