Current Portfolio:

CALL Play Updates

Allergan, Inc. - AGN - close 63.72 change +1.90 stop 62.12 *NEW*

Target(s): 63.75, 64.45, 65.25
Key Support/Resistance Areas: 65.50, 64.50, 63.80, 61.80, 59.50
Current Gain/Loss: +13%
Time Frame: 1 week
New Positions: No

7/8: AGN calls were initiated at the open this morning and the stock came within 1 penny of hitting our first target this afternoon. I would be hesitant to open new positions and chase the stock up here. I suggest readers tighten stops to $62.12 and be quick to take profits as our targets approach as I am not confident how long this rally will last. We should have no problem hitting our first target of $63.75 tomorrow. Our next target is $64.75. These areas are logical places to further tighten stops to see if we can get more profit out of the positions. For readers who do not trade intraday I think a good strategy on this position would be to place a one cancels the other bracket order (OCO) with the stop order based on the price of AGN stock (i.e. our stop of $62.12) while the sell limit order based on the price on the $65.00 calls. The projected price of the calls at our second target of $64.45 is approximately $3.80. The bottom line is we have a gain and I do not suggest holding on to the position trying to squeeze out more gains. The broader market can go down just as fast it went up today.

7/6: AGN closed above a downtrend line that began on 4/1 on Friday and has now retraced some of those gains and tested the backside of it. The stock is also above a key support level at $61.80 and all of its major SMA's, which should provide additional support if there is a pullback. I'm expecting the stock to bounce with the overall market and possibly retest its YTD highs. However, I suggest being quick to tighten stops if AGN moves higher. If AGN hits our first target we should be able to make 30% to 40% on the call position. Option activity has also been picking up mainly in the July strike prices. Our stop will be $59.38 which is below the opening gap up on Friday and all of the SMA's.

Current Position: August $65.00 CALLS, entry was at $3.10

Entry on July 7, 2010
Earnings Date 8/8/10 (unconfirmed)
Average Daily Volume: 2.58 million
Listed on 7/6/10

PUT Play Updates

Deere & Co. - DE - close 56.60 change +1.97 stop 60.05

Target(s): 53.25, 51.75, 50.25, 49.05
Key Support/Resistance Areas: 60.00, 57.50, 56.50, 56.00, 54.00, 52.70, 51.50
Current Gain/Loss: -16%
Time Frame: 1 to 2 weeks
New Positions: Yes

7/7: DE had a huge day and closed +3.61% higher. The stock closed right at a key support/resistance level at $56.50 and is entering a congestion zone, downtrend line, the backside of a broken upward trend line, and all of its SMA's from below. The stock could bounce a little further but I would be very surprised to see DE above $58.00. I suggest we use some patience and see how the this relief rally plays out in the coming days.

7/6: DE traded up to $56.06 this morning which triggered our entry to buy August $45.00 PUTS. The stock sold off the remainder the day and has peeked its head below the 200-day SMA for three consecutive sessions but has yet to close below it. If it does we should hit our first target of $53.25 relatively quick. If DE breaks down prior to bouncing I suggest readers be quick to take profits at the first target or tighten stops to protect against a hard reversal.

7/3: Last week DE broke below its 20-day, 50-day, and 100-day SMA's and a trend line that began in August of 2009. The stock traded all the way down to its 200-day SMA on Thursday and Friday where I expect it bounce. I suggest readers enter short positions on strength in the stock. I've chosen $55.75 as an entry trigger. Depending on the strength of any bounces readers may also consider waiting until the $56.50 to $57.50 area prior to initiating short positions (see rectangle on chart). This area is below the 20-day and 50-day SMA's which should be the extent of any bounces in the stock. I'm just not sure DE will bounce that high which is why I have chosen $55.75. We'll use a wide stop at $60.05 and will adjust it after we are in the position. Our primary target is $51.75 but I have offered several other targets readers can us as a guide to tighten stops or simply take profits if things move in our direction.

Current Position: August $55.00 PUTS, entry was at $3.00

Entry on July 6, 2010
Earnings 8/18/2010 (unconfirmed)
Average Daily Volume: 5.4 million
Listed on July 3, 2010

Lululemon Athletica Inc. - LULU - close 37.58 change +1.53 stop 43.10

Target(s): 35.25, 34.05, 33.00
Key Support/Resistance Areas: 42.25, 39.75, 37.00, 35.16, 32.75
Time Frame: 1 week

7/7: LULU rallied +4.24% higher today and is getting closer to our short entry trigger at $39.25. If the stock trades to this level I feel comfortable suggesting a short position as it will be the first time the stock approaches its 50-day SMA since breaking it on 6/25. The 20-day SMA is also overhead, along with a downtrend line which will provide even more resistance. I think patience will pay off for us on this trade.

7/6: LULU came within 15 cents of hitting our trigger to enter short positions today, and then reversed down. The stock has faced a barrage of selling recently and is coming into a prior support/resistance area near our first target of $35.25. If the stock keeps testing this area the support should eventually break. I only wish LULU and the market were not so oversold. I am expecting this stock to bounce, maybe even up to its 50-day SMA which is near $40.00. Considering the conditions I would like to raise our entry back to $39.25 (below the 50-day SMA). If we are patient and get a good short entry it should pay off.

7/3: This is an example of a stock not letting shorts in for swing trade. It may be wishful thinking to expect LULU to bounce all the way up to $39.25 after the selling pressure on Friday. It would be ideal to see LULU make a run up towards its declining 50-day SMA which would be the first time testing it from below since it was broken on 6/28. But I doubt that will happen so I suggest we lower our trigger to enter to $38.40 which is just below Thursday's high. In the end, I think LULU trades down to its 200-day SMA but if it keeps declining prior to bouncing we may lose our chance. For readers who trade intraday LULU provides some good opportunities and if things are moving fast (up or down) this is a good stock to consider trading.

Suggested Position: Buy August $35.00 PUTS if LULU trades to $39.25, current ask $2.05, estimated ask at entry 1.55

Entry on July xx
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 700,000
Listed on July 1, 2010

Starbucks Corp. - SBUX - close 23.61 change -0.73 stop 26.31

Target(s): 23.70, 22.55, 21.30
Key Support/Resistance Areas: 26.50, 26.00, 25.25, 24.80, 24.00, 23.60, 22.50
Time Frame: 1 to 2 weeks

Why We Like It:
7/6: SBUX came with 6 cents of our trigger to enter short positions and then proceeded close down -3.04%. I'm expecting SBUX to bounce with the broader market so I suggest being patient and ready to short the stock if it trades to our trigger of $24.75.

7/3: Last week SBUX broke below a trend line that began in October 2009 and collapsed below it 20-day, 50-day, and 100-day SMA's. These SMA's (in particular the 100-day SMA) have been key areas where the stock has bounced during its rally over the past year. And now that the stock is below them it has probably seen its best days, at least for awhile. I would like to use a trigger of $24.75 to enter short positions which is below the stock's 100-day SMA, the underside of the broken trend line, and the recent steep downtrend line, all of which are converging (see oval on chart). The $25.00 area could also be considered an entry point but I chosen $24.75 because it is near Friday's highs which could possibly form a double top on the intraday charts. Our primary target is $22.55 but I have also listed $23.70 as area to consider tightening stops. It is above the 200-day SMA which SBUX has not touched in over a year.

Suggested Position: August $25.00 PUTS, current ask $1.61, estimated ask at entry $1.44

Entry on July xx
Earnings 7/21/2010 (unconfirmed)
Average Daily Volume: 10 million
Listed on July 3, 2010


Children's Place - PLCE - close 44.61 change +2.20 stop 48.10

Target(s): 43.40, 41.70, 40.70, 40.05
Key Support/Resistance Areas: 46.40, 47.00, 46.00, 44.50, 43.40, 41.50
Current Gain/Loss: +2.5%
Time Frame: 1 to 2 weeks
New Positions: No

7/7: We closed PLCE at the open today per last night's updates. This was the right call as the stock rallied +5.19% on the day. We were break-even on the trade. The stock now sits at a key support/resistance level near $44.50 and is also approaching its 50-day and 20-day SMA's from below and the underside of a broken upward trend line. This may set-up another good shorting opportunity for readers who are interested. A relatively tight stop could be placed at $47.10.

7/6: PLCE gapped higher this morning and sold off the remainder of the day. I'm concerned that this stock may bounce higher along with the market from here so I am suggesting we close this position at the open tomorrow. We didn't get the entry that I hoped for and I do not want this position to turn into a loser. We will either have a small loss or small gain depending on how the market opens tomorrow.

7/3: PLCE printed a bearish engulfing candlestick on its daily chart. However, there is also a bullish inverse head and shoulders pattern forming on the intraday charts. This could be good for a bounce early next week but I believe there is enough overhead resistance to keep any bounces under control. If PLCE breaks down first without bouncing I suggest readers be quick to take profits at $41.70. Otherwise we'll monitor any bounces and adjust as things develop. I'm going to keep a wide stop for now due to the volatility.

Closed Position: August $45.00 PUTS at $4.00, entry was at $4.00

Annotated Chart:

Entry on July 1, 2010
Earnings 8/19/2010 (unconfirmed)
Average Daily Volume: 700,000
Listed on June 30, 2010