Editor's Note: Good Evening. June was a good month. We closed 3 positions today which were all winners. This leaves our model portfolio flat heading into tomorrow. I'm trying keep targets and stops fairly tight so we can limit losses and book nice gains. This strategy has caused the trades to be quick and the portfolio to be somewhat narrow, however, I'm trying to release trades daily to keep things active and book quick gains. The SPX has closed down 7 of the past 8 sessions and is oversold. I've released a long play on NYX that I think will benefit from the FinReg bill and an ensuing bounce in the market. Please email me with any questions.

Current Portfolio:


Hanson Natural Corp - HANS - close 39.11 change -0.42 stop 38.65

Target(s): 39.95(hit) , 40.50 (hit), 41.25, 42.40, 43.25
Key Support/Resistance Areas: 42.50, 41.00, 40.25, 39.30, 38.50
Final Gain/Loss: +13.63%
Time Frame: 1 to 2 weeks
New Positions: Closed

6/30: HANS hit our target of $40.50 on Monday and then the market sold off hard on Tuesday. As such, we suggested selling into strength and revised our target to exit HANS at $39.95 which is where the stock struggled with resistance on Tuesday. HANS traded up past this level several times this morning but could never break through $40.00. We are flat the position for a small +13.63% gain. Selling intensified this afternoon so this proved to be the right call. HANS ended the day by closing below the upward trend line from 5/7 and its 20-day SMA so the bullish case for the stock is starting to wane. HANS remains above its 200-day SMA (currently $38.92) and there is support at $38.79 but I would not want to be involved on the long side much below that. Although the stock could bounce from here as the market conditions are oversold, and if that happens HANS should do well. I would still be a seller into strength.

6/29: HANS held up relatively well until the end of the day. The stock is maintaining its upward trend line from 5/6 and is still above its 20-day and 200-day SMA's. We still have a small gain on this position and if the market bounces HANS should do well. I am going to tighten the stop to just below the 200-day SMA at $38.65. Our first target was hit yesterday and considering today's events I suggest readers consider selling into strength, or at least protecting profits if HANS proceeds higher from here. I've listed a new target of $39.95 which is where HANS struggled to break through today. This is an area to tighten stops to see if we can get more our of the stock.

6/28: HANS closed above it 50-day SMA today and is maintaining the upward trend line that started on 5/7. The stock also traded to a new high that hasn't been since 5/18. Our first target of $40.50 was hit today but I think we have a good chance of hitting $41.25 so I am going to leave this open to see if we can get some follow through in the coming days.

Closed Position: August $40.00 CALLS at $2.50, 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


Avon Products - AVP - close 26.50 change -0.57 stop 29.65

Target(s): 26.60 (hit), 25.80, 25.25, 24.25
Key Support/Resistance Areas: 29.50, 29.00, 28.00, 27.17, 25.75, 25.00
Final Gain/Loss: +34.45%
Time Frame: Several weeks
New Positions: Closed

6/30: Per last night's updates we are flat AVP as it traded down to $26.60. The stock has declined -4.6% in two days and I wanted to take profits on this trade today at this target because of the quick decline in the stock. We have a decent gain of +34.45% and I think booking profits is the right thing to do considering the oversold conditions. If readers still have positions I suggest protecting profits against a reversal. There is formidable intraday resistance between $26.90 and $27.10. AVP can be shorted on bounces and I will be looking for the stock to test its 20-day, 50-day, or downward trend line from below which should provide a another good shorting opportunity.

6/29: AVP is back below its 20-day SMA and I think the stock ultimately moves lower, but there could be bounce first. If the decline continues I don't anticipate it lasting too long considering the oversold conditions. As such, I have listed $26.60 as a new target which could be a logical bounce point for the stock. This is near the highs from 5/26 and 6/3. I would be quick to tighten stops or simply take profits at this level if it is hit tomorrow. However, if we bounce higher from here first I think that level becomes less important and we may see more downside.

6/28: AVP found some support at its 20-day SMA which also corresponds to its late May highs. AVP could bounce from here if the market does but I believe it will be short lived. Our stop is high enough to account for volatility and I expect the stock to trade down to $25.80 within the next week or so.

Closed Position: August $27.00 PUTS at $1.95, entry was at $1.45

Annotated Chart:

Entry on June 28, 2010
Earnings 7/29/2010 (unconfirmed)
Average Daily Volume: 4.2 million
Listed on June 26, 2010

Owens Corning - OC - close 39.91 change -1.51 stop 34.72

Target(s): 29.75, 28.80, 27.60
Key Support/Resistance Areas: 34.55, 32.90, 32.60, 31.00, 29.50, 28.50, 27.00
Final Gain/Loss: +43.64%
Time Frame: 1 to 2 weeks
New Positions: Closed

6/30: OC collapsed late in the day hitting our first target of $29.75. We are flat the position for a +43.64% gain. The stock has declined -6.2% since our entry yesterday and -7.8% since Monday's close. This is a big move in basically two days of trading so it is time to take profits. I still think there is more downside in this stock's future but I don't want to sit through a bounce, especially with a put option position in an oversold market when time is not on our side. If readers still have positions I suggest protecting profits from a reversal. There is intraday resistance at $30.55 and again at $31.10. I would not hold a short position above these levels as it will most likely trade up to the $32.00 area, where OC becomes another interesting short play.

6/29: August $32.50 PUTS were opened this morning at $2.75. OC saw some buyers step in late in the day and stock closed +1.6% off of its lows. It was down -2.57% on the day and the closing price of $31.42 was the lowest since June 9th. However, the market is oversold and stocks could bounce from here. OC remains below the 20-day and 50-day SMA's and its downward trend line from the May 13 highs. All of this should provide enough resistance to keep bounces under control.

6/28: OC has made a lower high and a lower low and I believe the stock will make a another lower low, or at least retest its recent lows which is almost -5% lower than current levels. The stock is testing its 20-day and 50-day SMA's from below which I also think will hold as resistance. If OC bounces there is also a downward trend line and congestion above to keep things in check. Our stop will $34.72 which is above the downward trend line and its highs from late May and Mid June.

Closed Position: August $32.50 PUT at $3.95, entry was at $2.75

Annotated Chart:

Entry on June 29, 2010
Earnings 8/4/2010 (unconfirmed)
Average Daily Volume: 2.3 million
Listed on June 28, 2010

Penn National Gaming, Inc. - PENN - close 23.10 change -0.67 stop 27.60

Target(s): 24.05, 23.60, 23.05
Key Support/Resistance Areas: 27.00, 26.45, 26.00, 24.60, 24.00, 23.50, 22.50
Current Gain/Loss: N/A
Time Frame: 1 to 2 weeks
New Positions: DROPPED

6/30: PENN never gave us our entry and has run away from us. The stock has hit all of our profit targets and I can not chase it at these levels. As such we have to drop the play and may reconsider it in the future.

6/29: Our trigger to enter shorts positions at $24.80 remains the same. If PENN trades up there in the coming days I suggest initiating short positions. There is a lot of overhead congestion and resistance above $24.80 to hold the stock down.

6/28: PENN traded to within 26 cents of our entry trigger and reversed hard to the downside, closing -4.65% on the day. The position has run away from our trigger and I do not suggest chasing it lower. Let's wait for a bounce and be ready to pull the trigger on short positions if the stock trades to our new trigger of $24.80 to enter short positions. This equates to about a 50% retracement of today's losses.

6/26: PENN has a primary and secondary downtrend line as overhead resistance along with all of its SMA's which are declining. It is also below a key support resistance area at $26.45 dating back to late 2009. I believe the stock will bounce a tad higher from here before it makes new lows in the coming days/weeks. Let's use a trigger to enter short positions at $25.75. My primary target is $23.60 but I have also listed $24.05 as a target where the stock may find some support. If the selling intensifies PENN will probably trade down to the $22.50 area which is below our most aggressive target. I'm going to place a wide initial stop at $27.60 to account for volatility and will adjust it once we are in the position.

Suggested Position: August $25.00 PUTS, current ask $2.50, estimated ask at entry $1.90

Annotated Chart:

Entry on June xx
Earnings 7/26/2010 (unconfirmed)
Average Daily Volume: 738,000
Listed on June 26, 2010