Option Investor

Daily Newsletter, Tuesday, 02/08/2005

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Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

Market Wrap

New Plays

New Option Plays

Call Options Plays
Put Options Plays

New Calls

None today.

New Puts

None today.

Play Updates

In Play Updates and Reviews

Call Updates

Goldman Sachs - GS - close: 111.55 chg: +1.96 stop: 105.00

GS continues to climb inside our target range of 110.00-115.00. Today's gain pushed GS above its December highs. We will plan to close the play if GS can trade to $114.50. Short-term traders may want to strongly consider exiting here for a profit.

Picked on January 30 at $106.12
Change since picked: + 5.43
Earnings Date 03/17/05 (unconfirmed)
Average Daily Volume = 3.4 million

Invitrogen - IVGN - close: 73.57 chg: +3.87 stop: 69.00 *new*

IVGN gapped higher and traded to an intraday high of $74.83 before pulling back. Fueling the move was news that IVGN raised its earnings forecast after buying privately held Dynal Biotech. Our target remains the $75.00 level but readers may want to strongly considering exiting here for a profit given the spike in option values. We are raising our stop loss to $69.00.

Picked on January 27 at $ 70.05
Change since picked: + 3.52
Earnings Date 02/17/05 (confirmed)
Average Daily Volume = 800 thousand

Put Updates

Apollo Group - APOL - close: 78.76 chg: +0.76 stop: 80.11

APOL has tested resistance at the $80.00 level yet again and failed. The technical picture is mixed but the two-month trend remains a bearish one. Wait for APOL to trade under $77.50 before considering new bearish positions.

Picked on January 23 at $ 77.61
Change since picked: + 1.15
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 2.4 million

Nike Inc - NKE - close: 83.95 chg: -2.25 stop: 87.01

This morning before the open Merrill Lynch downgraded NKE from "buy" to "neutral". The news sent NKE gapping lower and shares opened at $84.55 under our trigger at $84.65. The play was immediately opened as NKE broke through round-number, psychological support at $85.00 and technical support at the 100-dma. Volume was more than three times the norm. This looks like a significant breakdown that could lead to further declines but we do note the late day bounce in NKE's intraday chart. Watch to see if NKE rolls over under the $85 level or will it fill the gap back toward $86 before turning lower. Be patient if you're looking for a new entry point.

Picked on February 8 at $ 84.55
Change since picked: - 0.60
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 1.1 million


Aetna Inc - AET - close: 128.98 change: -0.27 stop: 125.00

The markets have not moved much this week but AET is beginning to falter ahead of its earnings report on Thursday morning. The Monday drop back under the $130.00 level is disappointing and today's minor failed rally doesn't help matters. Looking at how the technical oscillators are weakening we are choosing an early exit. Wall Street is expecting earnings of $1.27 a share.

Picked on January 13 at $127.61
Change since picked: + 1.37
Earnings Date 02/10/05 (confirmed)
Average Daily Volume = 2.2 million


Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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Littleton, CO 80163

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