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MDR $53.31 +1.09 McDermott Intl *** Stop $49.00 ***

McDermott was the strongest stock in the portfolio last week and actually set a new two-month high on Thursday. Friday's decline knocked some off but the uptrend continued.

Position: Jan-09 $60 LEAP call OYZ-AL @ $6.90

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OII $58.69 -1.31 - Oceaneering Intl *** Stopped $58 ***

OII declined on no news to hit our stop on Friday.

Breakout trigger: $65.50 (2/19)

Position: Short July $75 PUT OII-SO @ $12.80, exit 17.50, -4.70

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UNT $54.88 -.27 Unit Corp *** Stop Loss $53 ***

No news, no change.

Breakout trigger: $52.00 hit 02/04

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

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PBR $111.67 -5.67 Petrobras *** Stop Loss $108 ***

Petrobras lost ground again as the Latin American markets turned negative. Everybody is still bullish on Petrobras despite a slight drop in earnings the week before. This is profit taking in a down market. Petrobras is the number one deepwater play and has recently made discoveries in the billions of barrels. Support at $110 currently and I hope it holds but I am raising the stop just in case.

Breakout trigger: $101.50, hit 1/24

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

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VLO $52.51 -5.26 Valero *** Stopped $54 ***

19-year highs in gasoline inventories and record oil prices combined to crush the refiners and Valero was at the top of the list. No specific news other than crack spreads going to zero or worse.

Breakdown trigger: $50.00, hit 1/23

Position:
2009 $60 LEAP Call VHB-AL @ $5.00, exit $6.30, 3/06, +1.30

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FLS $100.64 -8.26 Flowserv *** Stop loss $94 ***

FLS declined to support at $100 on a bearish market rather than any news on Flowserve. I raised the stop to $94 just in case.

Breakdown trigger: $77.50, hit 1/22

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

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FLR $138.51 -.74 - Fluor Corp *** Stop $105 ***

Thursday saw a rise to resistance at $145 followed by a $6 drop on Friday. Since FLR was up $6 for the week that just took us back to even. Citigroup, UBS and Friedman Billings recently upgraded FLR to a buy. Definitely no complaints.

Earnings: Feb 28th +$2.82 with items vs street $1.18

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 $136.31 -4.20 - Transocean Inc ** Stop Loss $130 **

No change and no specific news other than a lot of articles saying how good a buy RIG is at these levels. Support is $135 and I am adding a stop at $130.

Earnings: Feb 20th, +70%

Breakdown trigger: Hit 12/4 @ $130

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

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CLB $118.25 -3.35 Core Labs *** Stop $115 ***

Core Labs held its own all week until the Friday decline setup by the market drop. Zacks reiterated their buy rating and a price target of $142. I am adding a stop at $115 just in case.

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 $62.82 -2.63 - Foster Wheeler ** Stopped $62 **

The $10 decline the prior week sealed our fate. I raised the stop to just under the drop and Friday's failure took us out. The nearly $20 drop in two days on an earnings miss was too much to overcome.

Earnings: Feb-26th Missed 56 vs 76 cents due to items.

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, exit 3/07 $9.20, -5.25

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NOV $59.96 -2.34 - National Oilwell Varco *** Stopped $59 ***

NOV moved one step closer to acquiring Grant Prideco with the antitrust approvals in the bag. Now the Prideco shareholders have to approve it. The deal is worth 13% less now than when it was announced due to weakness in the acquirer's shares. The merger news pushed NOV below our stop taking us out of the play.

Earnings: Feb 6th +57%

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

Position:
2008 May $90 Call NON-ER @ $7.20, exit 3/07, .25, -6.95

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HP $44.15 -.68 Helmerich & Payne *** Stop Loss $41 ***

Still one of the most bullish charts in the sector. HP confirmed they have a contract to operate 7 new flex rigs in Latin America on five-year contracts beginning in Q4.

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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JEC $76.02 -4.27 Jacobs Engineering *** Stop $73.00 ***

Can I have that entry back from last week? JEC held at support at $79 all week until Friday. The -2.50 drop took JEC back to next level support at $75. Lots of positive news about new contract wins but the market drop was too strong for JEC to overcome.

Breakout trigger: $82.50 hit 2/25

Position: 2009 $90 LEAP Call VJE-AR @ $12.00

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ATI $77.35 -7.28 - Allegheny Technology *** Stop $69.00 ***

No news but a major drop. For the second strait week ATI had one bad day that knocked major bucks off the price. I put a stop just under Friday's low.

Entry: ATI 76.60 02/10

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

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TEX $64.45 -3.00 Terex Corp *** Stop $59.00 ***

Tuesday and Friday were the only losing days but they combined to push TEX just under support at $65. TEX completed the acquisition of ASV on Tuesday. Adding a stop at $59.

Earnings: Feb 21st, +72%, +27% in revenue

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

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SGR $60.08 -4.30 Shaw Group ** Stop $57 ***

No material news but $6 of declines in the last two days along with the market. Adding a stop at $57.

Breakdown trigger: $55 Hit Jan-16th

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

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MOS $104.06 -7.24 - Mosaic Co *** Stop $97.00 ***

MOS was holding its gains very well until Friday and the -7.39 drop accounted for the entire week's move. No specific news but the number of analysts singing its praises continues to grow. I added a stop at $97.

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 $122.25 -2.77 Apple Inc *** Covered LEAP Call ***

Apple continues to hold over $120 after a positive shareholder meeting and a successful developers conference. It may be too much to hope that the weakness is behind us but lets do it anyway.

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 $98.04 -5.76 Research in Motion - Stop Loss $80

RIMM was knocked for a two week loss of -15 on worries that Apple was going to steal its thunder with the iPhone revisions. It is too soon to know if the weakness will stick and $95 is decent support.

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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