Editor's Note: Good Evening. CSCO stopped us out right at the end of the day Friday for a small loss. We've still got HANS long and our new long play on BAC to take advantage of any bounces. I've also released two additional short plays which are weak stocks from weak sectors. I expect trading to be choppy as we head into Friday's employment report and as earnings season gets underway in the coming weeks. I suggest traders remain nimble and protect profits as positions move in the right direction. Please email me with any questions.

Current Portfolio:

CALL Play Updates

Hanson Natural Corp - HANS - close 39.73 change +0.08 stop 38.25

Target(s): 40.50, 41.25, 42.40, 43.25
Key Support/Resistance Areas: 42.50, 41.00, 40.25, 39.30, 38.50
Current Gain/Loss: +0.79% Time Frame: 1 to 2 weeks
New Positions: Yes

6/26: HANS continues to make higher lows and if there is strength in the broader market early this week I believe our targets will be hit. On Friday the stock was increasing in the morning as the market was making now lows. The volume patterns are also bullish as the pullback tend to come on lighter volume. This shows me there may institutions buying this stock which bodes well for a bullish thesis. I've made some minor adjustments to the targets.

6/24: 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 providing support for the stock.

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

Annotated Chart:

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

Whirlpool Corp - WHR - close 96.65 change +2.36 stop 105.50

Target(s): 94.10, 91.50, 86.05
Key Support/Resistance Areas: 101.70, 99.00, 97.50, 94.00, 85.25
Time Frame: 1 to 2 weeks

We are waiting to be triggered at $97.50 to enter short positions. My comments remain the same from Thursday. 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 at $97.50, which is below Thursday'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 $6.80, estimated ask at entry $6.40

Annotated chart:

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


Cisco Systems - CSCO - close 22.18 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: -21.21%
Time Frame: 1 to 2 weeks
New Positions: Stopped Out

We were stopped out of CSCO right at the end of the day for -2.84% loss. The stock broke down out the base it has built over the past month and the reasons for initiating the trade failed. I have to say I was surprised the stock broke down, especially below $22.35 and especially as the broader market was gaining. CSCO lost -7% from its intraday high on Monday. If readers still have positions I would place a stop below today's low and play for a bounce from here.

Closed Position: August $22.00 CALL at $1.30, entry was at $1.65

Annotated Chart:

Entry on June 23, 2010
Earnings Date 8/5/10 (unconfirmed)
Average Daily Volume: 69 million
Listed on 6/16/10


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: +6.06%
Time Frame: 1 week
New Positions: Closed

DTG was closed at the open on Friday per Thursday's updates. My comments from Thursday explain why we chose this route. DTG hung in very well on Thursday 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. Our first target of $43.15 was hit on Wednesday.

Current Position: July $45.00 PUTS at $1.75, entry was at $1.65

Annotated Chart:

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