Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

TSO - $119.79 +.81 - Tesoro

TSO sprinted higher to the tune of +3.85 on Friday after the two day sell off in energy stocks. TSO is still having trouble holding over $120 but still attacking that resistance on every spike. S&P upgraded TSO to positive after it completed the $2 billion West Coast refinery acquisition from Shell. No change in play.

For initial commentary see April 29th newsletter.

2:1 Split: Record date May-14th, Pay date May 29th.

Earnings: May 3rd, $1.67 vs 61 cents in comparison qtr

Breakout target: $110 hit 10:AM on 4/23/07
Position: 2009 $120 LEAP Call ZGC-AD @ $16.68

*************************

ATW $64.33 +1.22 - Atwood Oceanics

Atwood is not setting the world on fire but still recovering nicely from the big dip two weeks ago. No news and no change in play.

Interesting article in Investors Business Daily regarding Atwood.

For initial commentary see April 29th newsletter.

Earnings: May 8th est $1.08, actual $1.01

Breakout trigger $60.50 hit 4/23/07
Position: 2009 $70 LEAP Call ZFJ-AN @ $6.50

***********************

BHP - $50.95 -.15 - BHP Billiton

BHP was volatile all week as metals prices experienced volatility. BHP was rumored to be in talks with Alcan now that the Alcoa buyout has been nixed. BHP is also rumored to be looking at a deal with RTP. No specific news and no change in play.

No earnings date announced.

For initial commentary see March 17th newsletter.

Earnings schedule: No date announced.

Breakout target $43.50 hit March 12th

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

********************

CCJ - $51.10 +1.05 - Cameco

CCJ continues to hold the high ground at $50 despite market volatility. The CCJ CEO was on TV this week reminding everyone that 2006 demand was 180 million pounds but only 103 million were produced. Long term the price is only going higher. A Lehman analyst pointed out that Rio Tinto (RTP) which produced 18% of global supplies last year has been selling their uranium on fixed price contracts that range from 3-10 years. The price when those contracts were signed was under $20 and current prices are over $120 per pound. He estimated that by 2009 more than 70% of those contracts would expire allowing RTP to obtain a market rate for its future production. That is sure to raise their profits and prices worldwide.

Worldwide there are 28 new reactors being built, 64 on the drawing boards and 158 in the proposal stages. If all were built it would be a 57% increase from the 435 reactors now in operation. In 2006 the world consumed 180 million pounds of uranium but produced only 103 million pounds. The rest came from Russian nuclear warheads being decommissioned. The supply from those warheads is dwindling and will be completely gone by 2015.

For initial commentary see March 10th newsletter.

Earnings: Apr-27th, -47% due to revenue timing

Breakout trigger: $37.50 Hit March 7th

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

*********************

PTR - $128.95 -2.20 - Petrochina

PTR along with many other Chinese stocks took a pounding on the Greenspan comments. Traders with large profits raced to collect them before a repeat of the February disaster occurred. No other news and no change in play.

For initial commentary see March 10th newsletter.

Breakdown target:
$110 1/2 position - hit Mar-5th

Position: JAN-09 $120 LEAP Call ZJK-AD @ $10.70
Cost reduction 4/19 $10.70 -2.25 = $8.45

Cost reduction play:
Position: stopped @ $114 4/19
Short June $105 Put PTR-RA @ $3.40, exit $1.15. +2.25

*****************************

SNP - $102.20 -1.30 - Sinopec *** Stopped $101 ***

Sinopec dipped to hit our stop on Thursday with the option at $19. It was an October call and not a LEAP and I thought it wise to take profits before any recovery in refiners started putting pressure on oil prices or the Chinese market corrected. Nice play, +$12, no complaints.

For initial commentary see March 3rd newsletter.

Breakdown target $82.50 hit on 2/27

Position: OCT $85 Call SNP-JQ @ $7.00, exit 5/24, $19, +$12

**********************

CHK $34.89 -.37 - Chesapeake Energy ** Stop loss $32.00 **

CHK is still holding near its highs and should continue to do so if nat gas prices remain over $7. CHK announced it had started the first gas well at DFW. Yes, Dallas/Fort Worth Airport! They plan to drill more than 300 gas wells into the Barnett Shale, which runs under the airport. DFW received an up front signing bonus of $186 million and will receive a royalty of 25% on any production. The first 170-foot rig broke ground with a large gold bit in the ceremony. I imagine that is going to be very psychologically disturbing to pilots as they come in for a landing and see a bunch of 170-foot plane catchers spotted around the runways. To minimize locations and disruptions they plan to drill as many as a dozen wells from each pad site to a depth of 8000 feet and then turn horizontal for another 4000 feet through the shale. Maintain the stop at $32.

For initial commentary see Dec-9th newsletter.

Earnings: May 4th, 87 cents vs est of 78 cents

Current recommendation: Hold

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

Insurance put:
Oct $30 Put CHK-VF @ 90 cents. Profit stop $28

************************

MRO $119.60 +5.08 - Marathon Oil

MRO continued to move higher to new historic highs after AG Edwards upgraded them to a buy. It did not hurt when they announced a new discovery in Angola that tested over 2000 bpd in a restricted test. Expectations are for higher production rates and additional wells. No change in play.

For initial commentary see Nov-18th newsletter.

Earnings: May 1st, $2.04 vs est $1.93

2:1 Stock Split June 18th, record date May 23rd

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

*******************

HES - $60.28 +.60 - Hess Corporation
(Formerly (AHC))

HESS continued moving higher despite some serious volatility during the week. A lease sale in Guinea was postponed for two months and HESS had been expected to do well in the sale. Hess was also named one of the top five all around stocks in an article on TheStreet.com. No material news and no change in play.

For initial commentary see Nov-4th newsletter.

Earnings: Apr-25th, $1.17 vs $2.22

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
Cost adjustment May puts +2.15, cost = $10.55

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 expired
May $55 Put IGG-QK @ $.80 expired

************************

BTU - $53.96 +0.45 - Peabody Energy

BTU continued to move higher after shaking off the midweek dip. Coal stocks have risen strongly over the last few weeks with BTU up +31% in the last seven weeks. Meanwhile lawmakers are considering plans to build some coal-to-liquids plants for auto fuel but opponents claim the greenhouse emissions would be going backwards in the attempt to clean up the atmosphere. No change in play.

For initial commentary see Oct-22nd newsletter.

Earnings schedule: April 19th, -32% on special items

Current recommendation: Buy at $46.50

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

*******************

SLB $79.24 -.16 Schlumberger

Calyon cut SLB and several other oil service stocks to "add" from "buy" but raised the price targets. That was the most exciting news I could find on SLB for the week. No change in play.

For initial commentary see Oct-14th newsletter

Earnings: April 20th, 96 cents vs est of 91 cents

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

Insurance put:
Position: June $70 PUT SLB-RN @ $1.15

*******************

SUN $78.29 +2.27 - Sunoco

No news but the dip buying continues. SUN will be presenting at two energy conferences over the coming weeks so we could see further gains on their positive outlook. No change in play.

For initial commentary see Oct-14th newsletter

Earnings: May 3rd, 70 cents vs 59 cents in comparison qtr

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

Insurance put:
Position: June $70 PUT SUN-RN @ 85 cents.

*******************

VLO $74.74 +0.77 - Valero Energy *** Stop Loss $70.00 ***

Valero has experienced a lot of volatility over the last two weeks but continues to inch higher. Critics claim the refinery boom is over and once all the refiners come back online the price of gas and oil will fall. That could very well be the case if we don't have an early season hurricane. Maintain the stop at $70.

For initial commentary see Oct-14th newsletter

Earnings: April 24th $1.86 vs $1.32

Current recommendation: Buy at $65, stop at $57

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

*******************

DO - $93.38 +0.48 - Diamond Offshore ** Stop $84.00 **

DO continued to hold near its highs on absolutely no news.

For initial commentary see Oct-14th newsletter

Earnings: Apr 26th, $1.64 vs $1.06

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


****************************
Non-Energy Positions
****************************

TEX - $81.00 +3.28 Terex Corp *** Stop Loss $77.00 ***

Terex called another special meeting of shareholders to authorize an increase in shares by 150 million. Shareholders voted down a prior request last week to increase shares by 450 million. Terex claims it needs the additional shares for splits and acquisitions. Terex was just named the fourth best performing company in the Barron's 500.

For initial commentary see May-13th newsletter

Breakout target $81.00 Hit 5/07

Position: Jan-09 $90 LEAP Call VXQ-AR @ $16.40

***************************

AAPL - $113.62 +3.60 Apple, Inc

Apple continued higher after CNBC reported a check of AT&T stores confirmed a June 20th date for the iPhone launch to begin. No change in play.

For initial commentary see May-13th newsletter.

Breakout target: $102.00 Hit 05/07

Position: Jan 2009 $110 LEAP Call VAA-AB @ $17.50

*********************

DB - $151.13 -6.76 - Deutsche Bank *** Stopped $152 ***

DB crashed through our stop when news broke that the Federal Banking Commission had raided the DB offices on possible securities violations.

For initial commentary see May-13th newsletter.

Breakout target: $156.50 Hit 05/-7

Positon: Oct $160 Call DB-JL @ $7.00, exit $5.40, -1.60
(No LEAPS)

*********************

ATI - $111.06 -3.22 - Allegheny Tech

Thursday's drop in the market took its toll on ATI although it did rebound +2.14 on Friday. No news and no change in play.

For initial commentary see May-5th newsletter

Breakdown target $110.00 hit 04/30

Call spread:
LONG JAN-09 $110 LEAP Call OYG-AX @ $21.50
SHORT JAN-09 $140 LEAP Call ZKG-AH @ $9.50

**********************

TOL - $29.96 +1.41 - Toll Brothers

Toll reported earnings that fell -79% for Q1 but they were rescued by the +16% jump in new single family homes reported for April. That would be a 14 year high but analysts are skeptical. Still Toll rebounded nearly +4 off last week's low and was showing positive internals. No change in play

For initial commentary see Apr-21st newsletter

Earnings schedule: May 24th

Breakout target: $28.50 hit 4/16
Position: 2009 $35 LEAP OTY-AG @ $3.50

*************************

BZH - $35.35 +.89 - Beazer Homes ** LEAP PUT **

Beazer gained ground early in the week on positive new home sales news but crashed and burned late in the week after another class action suit was filed. Hopefully the tide has finally turned.

Beazer has several suits pending, some seeking class action status on charges it practiced predatory lending, filed illegal loan documents and manipulated its stock price.

For initial commentary see March-31st newsletter

Earnings: April 26th, -1.12 vs +2.35 in the comparison quarter.

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

No stop loss
 

Leaps Trader Update Archives