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Play Updates

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The current format of the Play Updates has changed. Only the pertinent data that has changed from the prior week will be shown in an effort to concentrate more on new commentary on new plays rather than restating existing positions. Each play has a link back to either its last full commentary or its initial description.

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SNP - $78.45 +2.40 - Sinopec

No news but the rebound is gaining speed. No complaints and no change in play.

To see the initial commentary on this position click here

Breakdown target $82.50 hit on 2/27

Position: OCT $85 Call SNP-JQ @ $7.00

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THE $33.71 +.77 - TODCO ** Stop Loss $30.00 **

Todco dipped again on Monday to $32 but rebounded sharply on the signing of new contracts with Mexico and Malaysia for drilling services. The Malaysian contract is for a rig that has been in storage since March 2002 and will represent a new source of revenue. Expected contract revenues from this rig are in the range of $130 million. Not a bad deal for a 27 year old rig that was in storage.

To see the initial commentary on this position click here

Earnings: March 1st, $1.11 vs .34 cents in comparison quarter

Current recommendation: Hold

Breakdown target $39 hit 12/7/06

Position: 2009 $45 LEAP ZYU-AI @ $8.40

Insurance Put: None

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CHK $30.13 +.24 - Chesapeake Energy ** Stop loss $28.50 **

CHK continues to hold above support but lacks any momentum. Maintain the stop. No news and no change in play.

To see the initial commentary on this position click here

Earnings: Feb-23rd, 90 cents vs est 76 cents.

Current recommendation: Hold

Position: 2009 $35 LEAP VEC-AG @ $5.30

Insurance put: none

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FXI $98.25 +3.15 - China 25 Index Fund ** Stopped $93 **

The gap down on Monday hit our stop at $93 and we exited for a small profit. I am not sure I want to reenter this position until a new tend returns on the China indexes.

The iShares FTSE/Xinhua China 25 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE/Xinhua China 25 Index.

Component list

This iShare focuses on the largest companies in China (58% of it positions) and Hong Kong (42%). These are the most liquid companies in these markets. With Asia growing by leaps and bounds the FXI generated a +40% return in 2005 without using options. We hope to do better using LEAPs.

Current recommendation: Buy at $90

Breakout target: $94.50 hit 11/22/06 on gap open to $95.80

Position:
2009 $100 LEAP Call VHF-AT @ $13.50, exit 3/5 $15.40 +1.90

No insurance

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MRO $94.73 +5.49 - Marathon Oil

It was a very strong week for Marathon with nearly an +$8 rebound from Monday's lows. No news and no change in play.

To see the initial commentary on this position click here

Earnings: Feb-1st 3.06 vs 3.43 (Q4/05) $1.08 billion profit

Current recommendation: Buy at $85

Position 2009 $100 LEAP Call VXM-AT @ $12.60

Insurance put: 2/18/07
Position: March $85 PUT MRO-OQ @ 65 cents. Stop $85

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HES - $52.80 +1.38 - Hess Corporation
(Formerly (AHC))

HES is holding near its recent highs but remains lackluster after the prior week's drop. No news and no change in play.

To see the initial commentary on this position click here

Earnings: Jan 31st, $1.13, vs $1.44 in Q4/05, 230% replacement

Current recommendation: Buy at $47

Position:
11/05/06 2009 $50 LEAP Call VHS-AJ @ $6.80
Cost adjustment put exit +1.60, cost = $8.40

Insurance Put: Triggered Jan-3rd @ $49
01/03/07 May $45 put HES-QI @ $2.60, exit 1/26 $1.00

Insurance Put: 2/26/07
MAY $50 PUT IGG-QJ @ $1.35, profit stop $47


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BTU - $38.85 -.09 - Peabody Energy

BTU announced a contract with Rentech to supply coal for their initial coal to liquids plant in Illinois. They are also exploring two other locations to build additional plants to convert coal to diesel and jet fuel. Several analysts have been recommending BTU at what they are calling as a depressed level.

SELL JAN-08 $30 PUT LLW-MF is BTU touches $35

To see the initial commentary on this position click here

Earnings: Jan-25th +42% including special items.

Current recommendation: Buy at $35

Position:
10/22/06 Jan-2009 $50 LEAP Call ZZT-AJ @ $8.70
02/05/07 March put stopped -$1.00, cost = $9.70

Insurance put: Triggered with drop through $39
01/03/07 March $35 Put BTU-OG at $1.15, stopped @ $42.50

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RIG - $77.57 +2.14 - Transocean Inc ** Stopped $74 **

RIG continued its drop from the prior week to touch our stop at $94 for an instant on Monday. The low was $73.90 before RIG rebounded to hit $78.50 before the week was out. I hate to see RIG go but the decline appeared to be nearing breakdown levels and it was a tactical exit.

To see the last full commentary on this position click here

Earnings: Feb-14th, $1.25 vs 46 cents in prior quarter.

Current recommendation: Buy at $74

LEAP Position:
10/03/06 Position: 2009 $80 LEAP Call VOI-AP @ $12.90
01/31/06 Cost update Put stopped -1.15 cost = 14.05, exit $13.60

Insurance put: Triggered at $79 on Jan-3rd
1/3/07 Feb $75 PUT RIG-NO @ $2.55, stopped $77.50, $1.40

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TSO - $94.88 +2.68 - Tesoro Corporation ** Stopped $89.00 **

Tesoro finally cracked enough on Monday to hit our stop for about a ten minutes but that was enough to force the exit on the play with a profit of $22. We will look to reenter TSO on a dip with a different strike.

To see the last full commentary on this position click here

Earnings: Jan-29th, $2.28 +129%

Current recommendation: Hold

LEAP Position:
10/04/06 Position: 2009 $70 LEAP Call ZGC-AN @ $7.70
03/05/07 Exit $29.70, profit $22.00

Insurance put: None

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SLB $65.10 +2.85 Schlumberger

SLB returned to two-month highs and with the added exploration budget by Exxon they should move higher soon. No change in play.

SELL JAN $55 PUT WUB-MK on a touch of $60 by SLB

To see the last full commentary on this position click here

Earnings schedule: Jan 19th, +71% to $1.13 billion

Current recommendation: Buy at $60, stop at $55

LEAP Position:
1/2 9/11/06 @ $8.60
1/2 9/12/06 @ $8.00
Position: 2009 $70 LEAP Call VWY-AN @ $8.30
Cost update for expired Jan put +2.00 = $10.30

Insurance Put: 9/18
Position: Jan $50 Put SLB-MJ @ $2.00, expired

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SUN $65.27 +1.50 - Sunoco

Not as strong as Valero nut holding at the high end of its recent range. No change in play.

SELL JAN $55 PUT WUD-MK on a touch of $60 by SUN

To see the last full commentary on this position click here

Earnings: Jan-31st, -57% $1.00 vs $.96 analyst est.

Current recommendation: Buy at $60, stop at $54

LEAP Position:
9/12/06 Position: 2009 $70 LEAP Call VUN-AN @ $13.50
Cost update expired Jan put +2.40 = $15.90

Insurance Put:
Position: Jan $55 Put SUN-MK @ $2.40, expired

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VLO $60.23 +3.23 - Valero Energy

Valero broke out to a new six month high on the spike in gasoline prices and the rising crack spreads. No news of note and no change in play.

To see the last full commentary on this position click here

Earnings: Feb-1st

Current recommendation: Buy at $50, stop at $45

LEAP Position:
9/24/06 Position: 2009 $60 LEAP Call VHB-AL @ $7.70
Cost update expired Jan put +2.25 = $9.95

Insurance Put:
Position: 9/25 Jan $45 Put VLO-MI @ $2.25, expired

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DO - $76.66 +1.54 - Diamond Offshore ** New Stop $73.00 **

DO barely rebounded off the Monday lows and is not performing as you would expect with all the global exploration in progress. I believe it is just caution in the broader markets until a new market direction is decided. No change in play.

To see the last full commentary on this position click here

Earnings schedule: Feb-8th

Current recommendation: Buy at $75, stop at $69

LEAP Position:
8/29/06 Position: 2009 $80 LEAP Call VCT-AP @ 14.20
Cost reduction: Oct $70 Put profit -3.15, cost now $11.05
Cost increase: Dec $60 put expired -2.40, cost now $13.45

Insurance Put:
10/08 Dec $60 Put DO-XL @ $2.40, expired

Position closed:
10/03 October $70 put DO-VN @ $1.65, exit @ $4.80, +3.15


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Non-Energy Positions
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