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UNT $52.36 +0.91 - Unit Corp

No news and Unit hit a new six-month high at $54.20 on Thursday before giving up $2 on the broad market weakness. Unit still has one of the most bullish charts in the sector.

Breakout trigger: $52.00 hit 02/04

Position: Sept $55 Call UNT-IK @ $3.80

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PBR $114.45 +2.88 Petrobras *** Stop Loss $88 ***

No material news but Petrobras came very close to a new all time high on Thursday at $118.43 before giving up $4 on the broad market weakness. This is still my favorite oil stock and I think the eventual breakout will be strong. We just have to get past the potential for a March decline in oil prices.

Breakout trigger: $101.50, hit 1/24

Position: 2009 $110 LEAP Call XVQ-AB @ $12.70

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VLO $58.37 -0.52 Valero *** Stop Loss $47 ***

VLO is going nowhere fast after that big gain three weeks ago. VLO is stuck in a range from $56-$60 as we await summer demand to begin. Historically refiners rise from late Feb to May.

Breakdown trigger: $50.00, hit 1/23

Position: 2009 $60 LEAP Call VHB-AL @ $5.00

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FLS $94.57 +1.60 Flowserv *** Stop loss $90 ***

No news on FLS and it knocked on the $100 resistance door twice last week. There appears to be no interest in selling it but buyers still lack conviction. No complaints here. I raised the stop to $90.

Breakdown trigger: $77.50, hit 1/22

Position: July $90 Call FLS-GR @ $6.00

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FLR $111.65 +9.13 - Fluor Corp *** Stop $105 ***

FLR posted a monster rebound from the prior Friday's low at $106. Earnings are not until Feb 28th and resistance remains $125. No specific news other than a UBS upgrade to a buy.

Earnings schedule: Feb 28th

Breakdown trigger: $145 Hit 12/13

Position: 2009 $160 LEAP Call XOB-AL @ $22.30

Remediation plan: 1/20
LONG: April $110 Put FLR-PB @ $9.20
SHORT: Jan $170 LEAP Put XOB-MN @ $58.40

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RIG $129.07 +3.89 - Transocean Inc

RIG announced a sale of three shallow water rigs to Hercules for $320 million and officially exited the shallow water drilling business. Earnings are Wednesday and it could produce some serious volatility. Current resistance is $132.50.

Earnings schedule: Feb 20th

Breakdown trigger: Hit 12/4 @ $130

Position: 2009 $140 LEAP Call VOI-AH @ $15.80

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CLB $118.55 +8.99 Core Labs

Core Labs posted a 39% increase in earnings to $1.36 per share and a 15% rise in revenue to $176 million. This was the 11th consecutive quarter that CLB has posted record highs in revenue. It was the 8th consecutive quarter for record earnings. Margins increased 375 basis points to 28% and a new record. Guidance for Q1 was for an increase in revenue of 16% and earnings of 30%. Traders liked the news and pushed CLB back to resistance at $120 despite the end of week swoon in the markets.

Earnings: $1.36, +39%.

Breakdown Trigger: $130 hit 11/12

Position: 2009 $140 LEAP Call ZYM-AH @ $21.30

Remediation addition:
Position: June $130 Call CLB-FF @ $6.10

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FWLT $71.93 +6.65 - Foster Wheeler

This is becoming ridiculous. The back-to-back weeks of alternating $6 gains and losses increased to 3 with a $6.65 gain. Fortunately the gain pushed FWLT back to resistance at $73 ahead of their earnings on the 26th. A breakout here would be strongly positive.

Earnings schedule: Feb-26th

2:1 split on Jan-22nd.

Breakdown trigger: $67.50 hit 11/06 (post split)

Position: (2) 2009 $75 LEAP Call ZHF-AO @ $14.55

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NOV $57.27 +4.77 - National Oilwell Varco *** Stop $52 ***

NOV did pretty well for the week after earnings and returned to test resistance at $65. NOV failed the test as the market weakened but remains poised to try again if the market turns positive.

Earnings: Feb 6th +57%

Breakout Trigger: $80, hit 10/11/07

Position: 2008 May $90 Call NON-ER @ $7.20

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HP $41.95 +.63 Helmerich & Payne *** Stop Loss $33 ***

Still hitting new highs on no news. This is the most bullish chart in the portfolio.

Earnings: Jan-31st $1.02

Position: Jan 2009 $35 LEAP Call ZQA-AG @ $4.50

Insurance put:
Position: Nov $30 HP-WF. @ .50, Stop $28.50

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Non-Energy Positions
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ATI $82.46 +5.86 - Allegheny Technology

Definitely no complaints here. ATI continues to extend its gains and resistance at $85 will likely be tested again next week. S&P raised its credit rating to BBB-, the lowest investment grade from the prior BB+ and junk status. S&P said strong demand for its key products and improved cost structure was improving performance.

Entry: ATI 76.60 02/10

Position: 2009 $90 LEAP Call OYG-AR @ $8.90

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TEX $59.80 +4.94 Terex Corp

Terex rebounded strongly from the prior week's drop and is positioned for earnings on Thursday. No specific news and you can bet there will be volatility surrounding the earnings report.

Earnings schedule: Feb 21st

Position: Jan 2009 $70 LEAP Call VXQ-AN @ $8.60

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SGR $59.82 +3.71 Shaw Group

A new six-week high on Thursday and a minimal gain on Friday when the rest of the market was weak. S&P said they may upgrade Shaw's credit rating if the current solid performance continues. No complaints.

Breakdown trigger: $55 Hit Jan-16th

Position: 2009 $60 LEAP Call OWA-AL @ 11.50

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MOS $103.37 +7.55 - Mosaic Co

No specific news but Mosaic appears to be breaking out of congestion and starting to move towards new highs. Definitely no complaints!

Breakdown trigger: $85 Hit Jan-10th

Position: 2010 $100 LEAP Call LXW-AT @ $24.20

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Covered LEAP Calls
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AAPL $124.63 -.85 Apple Inc *** Covered LEAP Call ***

Just shoot me now. Every time I look at AAPL I get more frustrated. Buyers are still boycotting Apple while their products continue to be top sellers. $130 is becoming stronger resistance and I fear any weakness by HPQ when they report earnings next week will rub off on Apple. No change.

When Apple starts to post a new positive trend we will do a put spread to recover some more money. First we wait for the trend.

Position:
Long: AAPL @ open of $177.52 (Jan-14th open)
Short: 2009 $150 LEAP Call VAA-AW @ $20.80
Breakeven: AAPL @ $136.12

Position changes:
Closed $200 LEAP Short @ $9.40 ($30.00 - 9.40 = gain +20.60)
Replaced with $150 LEAP short @ $20.80
AAPL cost basis $177.52 - $41.40 (20.60 + 20.80) = 136.12
Breakeven: AAPL @ $136.12

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RIMM $95.19 +5.48 Research in Motion - Covered Call Stop Loss $80

New life starting to appear in RIMM and current resistance at $95 could be about to break. It would be the end of a long dry spell on RIMM but it is time. We saw two tests of the low $80 range over the last two months and that could be seen as a strong bottom. Let's hope it sticks and moves up from here. I would be a buyer of shorter term calls on a more over $98.

See the Jan-13th LEAPs newsletter for the description of the change in the options.

Alert entry 11/12 @ $102.60

Covered LEAP Call:

LONG RIMM @ $102.60 (cost $102.60 -9.10 $150 LEAP = 93.50)
SHORT 2009 $110 LEAP Call VHO-AB @ $18.30 on 1/14/08

Closed: 1/14
SHORT 2009 $150 LEAP Call XTB-AJ @ $18.50, close $9.40 +9.10
 

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