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Play Updates

In Play Updates and Reviews

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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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BHP - $50.41 +.93 - BHP Billiton

BHP continued to push higher despite a California rejection of their proposed LNG terminal 14 miles off the coast. The floating terminal would have supplied 10% of California's natural gas needs but the state said the potential environmental impact was unacceptable. No change in play.

To see the initial commentary on this position click here

Breakout target $43.50 hit March 12th

Position: JAN-09 $50 LEAP Call ZPK-AJ @ $6.00

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CCJ - $47.32 +1.17 - Cameco

Cameco gave back a couple dollars early in the week but rebounded to close with a gain. Uranium prices spiked +$19 for the week to something in the $130 range. Uranium prices have risen +60% in the last 12 months and it is expected to go higher. With over 130 plants in the planning stages worldwide the demand for uranium is going to soar. CIBC downgraded CCJ on the basis of price and recommended investors take profits. CIBC also upgraded USEC (USU) despite an +80% rise in price over the last six months. Somebody at CIBC has been drinking their lunch. No change in play.

To see the initial commentary on this position click here

Breakout trigger: $37.50 Hit March 7th

Position: JAN-09 $40 LEAP Call ZBK-AH @ $7.80

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PTR - $116.42 -1.69 - Petrochina

PetroChina gave back a buck for the week but remains very near the 6-week high. I raised the stop on the short put. No news.

To see the initial commentary on this position click here

Breakdown targets:
$110 1/2 position - hit Mar-5th
$105 1/2 position - not yet triggered

Position: JAN-09 $120 LEAP Call ZJK-AD @ $10.70

Cost reduction play:
Position: Short June $105 Put PTR-RA @ $3.40, stop $114

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SNP - $91.75 +3.68 - Sinopec

Another stellar week for Sinopec despite a -$3 loss on Friday. Profits for 2006 rose +30% to $7 billion. Sinopec just signed a deal with McDonalds to install drive thru outlets at its pick of the refiners 28,000 service stations. What a daunting task. Joe you and Bill go look at the 28,000 filling stations and report back on which ones would be best for selling a big mac and fries. How many miles would you have to drive to inspect 28,000 stations? 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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CHK $33.69 +1.18 - Chesapeake Energy ** Stop loss $30.50 **

As a trader I really want to short CHK next week. $34 has been long term resistance since Sept 2005. CHK has made the round trip from $28 to $34 numerous times and here we are back at $34. However, with the CEO buying stock like he wants to take it private I have a gut feeling this time may be different. Of course I will kick myself if it is not. All the press is very positive and they stress that CHK is rapidly drilling out their reserves to bring them into the proven category. That could triple their proven reserves today of 9 TCF. I am going to hold my nose and remain long in hopes that a move over $34 will produce significant short covering. No change in play.

To see the initial commentary on this position click here

Earnings schedule: May 4th

Current recommendation: Hold

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

Insurance put: none

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MRO $101.99 -0.80 - Marathon Oil

MRO is trying very hard to break that $103 resistance but it just can't seem to make it. MRO reported a new discovery in the Gulf in 2900 feet of water. They own 100% of the well. They also warned on production and sales for Q1. They will report earnings on May 1st. No change in play.

To see the initial commentary on this position click here

Earnings schedule: May 1st

Current recommendation: Buy at $85

Position 2009 $100 LEAP Call VXM-AT @ $12.60
Cost update: Expired March put +65 cents to $13.25

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

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HES - $57.87 +1.58 - Hess Corporation
(Formerly (AHC))

Hess hit a new historic high on Friday despite being downgraded by Lehman earlier in the week. Lehman said Hess and Murphy Oil traded at a premium to their assets. Ironically the Street.com rated them the very next day as one of their Top-10 All-Around Value Stocks. Fitch raised their rating from stable to positive citing improved performance and stable debt levels. It takes all kinds of investors to make a market.

To see the initial commentary on this position click here

Earnings schedule: April 25th

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 $46

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BTU - $46.18 +2.44 - Peabody Energy

FBR upgraded BTU on Monday and the stock remained strong all week. Merrill said in a note to investors on Thursday they were buying Consol Energy and Peabody Energy citing expected high demand for coal-fired electricity this summer. Coal supplies are tightening and Foundation Coal shutdown an unprofitable mine the prior week. On Friday BTU declared a 6-cent dividend. No other news.

To see the initial commentary on this position click here

Earnings schedule: April 19th

Current recommendation: Buy at $37.50

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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SLB $76.00 +4.16 Schlumberger

SLB caught fire this week after breaking out of resistance the prior week. SLB reports earnings next Friday and they are expected to be strong. No news ahead of earnings. No change in play.

To see the last full commentary on this position click here

Earnings schedule: April 20th

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 $74.75 +0.58 - Sunoco

SUN hit a new 6-month high but failed to capitalize on the move. It is holding the high ground but can't seem to seize the day. No news.

To see the last full commentary on this position click here

Earnings schedule: May 3rd

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 $68.40 +2.39 - Valero Energy

Valero hit a new 8-month high on news it was planning to restart one half of the McKee Texas plant this month. The other half will not come back online until late this year. This restart will help the crude glut in Cushing OK but a planned shutdown of the Conoco refinery in Borger Texas will shut in 146,000 bpd while COP upgrades and connects a 25,000 bpd coker at the facility. This will further increase the problems at Cushing. The new 8-month high comes less than two weeks after Cramer recommended a sell on Valero as "refining has run its course." No change in play.

To see the last full commentary on this position click here

Earnings schedule: April 24th

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 - $83.50 +1.320 - Diamond Offshore ** Stop $73.00 **

DO is creeping upward with resistance now at $85.00 and it appears a breakout will eventually appear. A move over $85 should produce some real speed. No news and no change in play.

To see the last full commentary on this position click here

Earnings schedule: April 26th

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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BZH - $29.31 +0.67 - Beazer Homes ** LEAP PUT **

Dip buying provided an early week lift followed by good news about reduced cancellations at a smaller builder. It may have provided a temporary lift but the suits and legal problems did not go away.

Beazer is being flooded with suits, some seeking class action status on charges it practiced predatory lending, filed illegal loan documents and manipulated its stock price. These types of suits appear whenever bad news appears about a company but in this case it looks grim.

To see the last full commentary on this position click here

Earnings: April 26th

Position: Jan-08 $25 PUT WZF-ME @ $3.10

No stop loss
 

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