Editor's Note: We have had a good week and have booked several gains. I am expecting a relief rally tomorrow and possibly into next week. I can not predict the extent of the rally but I do believe it will be short lived. I am suggesting our short DTG position be closed tomorrow at the open to protect capital. We also have two long positions to take advantage of any bounce and I am confident our targets will be achieved. I suggest readers be prepared to protect profits as these targets approach. I provided a couple of stocks on my watch list in the new plays section tonight. My bias is to the short side but ideally I would like to see a bounce prior to a bigger decline that I think will start next week. I doubt any events tomorrow will change my view so I plan to have several short candidates released this weekend. Please email me with any questions.

Current Portfolio:

CALL Play Updates

Cisco Systems - CSCO - close 22.57 change -0.29 stop 22.20

Target(s): 23.35, 23.65, 23.85, 24.20
Key Support/Resistance Areas: 23.65, 22.55, 22.35
Current Gain/Loss: -8.50%
Time Frame: 1 to 2 weeks
New Positions: Yes

CSCO found support at $22.50 today which is near our key support level at $22.55. The stock also has support at $22.35 which were CSCO's February lows. We are playing for a bounce in the stock within the base it has built over the past month. This could be a quick trade and I suggest readers take profits if CSCO bounces as I anticipate. In light of today's pullback I have adjusted the targets and am listing a lower target of $23.35. If CSCO hits this first target we should make about 35 cents on the option position for a +21% gain. This isn't exactly what I expected when opening the position but we have to stay nimble and adjust to what the market gives us. If CSCO breaks out of the base it could rally to fill a gap which is up near our most aggressive target at $24.20 and below the stock's 200-day SMA. The overall strength or weakness in the broader market bounce is likely to determine how far CSCO will go from here. NOTE: I view this trade as potentially being quick.

Current Position: August $22.00 CALL, entry was at $1.65

Entry on June xx
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 69 million
Listed on 6/16/10

Hanson Natural Corp - HANS - close 39.65 change +0.45 stop 38.25

Target(s): 40.20, 40.70, 42.40, 43.25
Key Support/Resistance Areas: 42.50, 41.00, 40.25, 39.30, 38.50
Current Gain/Loss: +20%
Time Frame: 1 to 2 weeks
New Positions: Yes, but be prepared for a quick exit

HANS printed a bullish engulfing candlestick today and closed +1.15% higher, despite the significant weakness in the broader market. The market should bounce soon, if not tomorrow, and this should bode well for HANS. The stock was turned back from its 50-day SMA today for the second time in the last 4 trading sessions. If it keeps knocking it should break through, and with the broader market in oversold conditions itching for a bounce, I expect this to happen and our targets to be hit. The 20-day and 200-day SMA are also is providing support for the stock.

Current Position: August $40.00 CALLS, entry was at $2.20

Entry on June 23, 2010
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 1.1 million
Listed on 6/22/10

PUT Play Updates

Dollar Thrifty Auto Group - DTG - close 43.76 change +0.05 stop 45.90 *NEW*

Target(s): 43.15 (hit), 42.70, 41.65, 40.05, 39.35
Key Support/Resistance Areas: 45.50, 44.15, 43.50, 41.50, 39.00,
Current Gain/Loss: +0%
Time Frame: 1 week
New Positions: No

DTG hung in very well today and we did not experience the selling pressure I was looking for to reach our lower targets. There was selling in many consumer oriented stocks but not DTG. I am concerned of a broader market bounce higher at these levels and DTG will most likely be a beneficiary. I do think the bounce will be short lived but DTG may bounce another $1 or more higher up to its 20-day and 50-day SMA's, which is where I think the stock will most likely turn back lower. But I don't want to sit through a bounce and see the position deteriorate. Time decay will also start to affect our option premium so in lieu of today's relative strength in the stock I am suggesting we sell positions at the open tomorrow to limit risk and preserve capital. We can always re-enter a short position and maybe even do so at a higher price. Yesterday our first target of $43.15 was hit. I want to leave my comments about a strategy that could have been deployed to protect profits on the position. When $43.15 was hit our options at the time were worth $2.25 which was almost a +40% gain on the position. The stock proceeded to bounce higher in the afternoon and evaporated all of those gains. Once our target was hit a protective stop could have been placed at $43.40 which was above the 10:30 30-minute bar (or the 10:45 15 minute bar). Placing a stop at this level would have stopped you out with a +21% gain, which was hit on the 12:00 bar (the option was worth $2.00). This is simply an example of protecting profits as positions move in the right direction.

Current Position: July $45.00 PUTS, entry was at $1.65

Entry on June 22, 2010
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 9.1 million
Listed on June 19, 2010

Whirlpool Corp - WHR - close 94.29 change -3.42 stop 105.50

Target(s): 95.10, 91.50, 86.05
Key Support/Resistance Areas: To Follow
Time Frame: 1 to 2 weeks

WHR ran away from us today and closed below our first target of $95.10. I still believe WHR has a good chance to trade down to $91.50 and eventually $86.05 but I do not suggest chasing it at these levels. The broader market should bounce from here and I suspect WHR will as well. But these bounces should be short lived and I suggest we take advantage them. I have lowered our entry to short positions to $97.50. My comments from the play release remain the same. WHR has been making lower highs and has broken many trend lines. The stock has one more trend line providing support from the July lows to the February lows. However, I think it only a matter of time before this is broken and the stock retests or breaks its recent lows near $91.50. WHR is also below its 20-day and 50-day SMA's and I think there is enough overhead resistance to enter short positions $98.80 (adjusted now to $97.50) which is below today's highs and the 20-day SMA. I am going to place a wide initial stop at $105.50 to account for volatility and will adjust it once we are in the position.

Suggested Position: Buy August $95.00 PUTS current ask $8.20, estimated ask at entry $6.60

Entry on June xx
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 2 million
Listed on June 23, 2010