Option Investor
Newsletter

Daily Newsletter, Monday, 9/28/2009

Table of Contents

  1. Market Wrap
  2. New Plays
  3. In Play Updates and Reviews

Market Wrap

Return Of Merger Monday Spurs Stocks

by Todd Shriber

Click here to email Todd Shriber
The return of Merger Monday lifted U.S. stocks to their highest levels in five weeks as major acquisition announcements from Abbot Laboratories (ABT) and Xerox (XRX) boosted investor hope that merger and acquisition activity is rebounding from its previously sluggish pace. Stocks performed markedly better today than on the last Merger Monday, August 31, when big acquisitions by Disney (DIS) and Halliburton (HAL) failed to jolt stocks. The S&P 500 gained 1.8% to close at 1062.98 and the Dow Jones Industrial Average turned in a triple-digit gain, adding 124.17 to close at 9789.36. Tech issues were no slouch either, helping the Nasdaq add almost 40 points to close at 2130.74.

Stats Table

Overall, it was obviously a good day for equities as buyers significantly outnumbered sellers and that helped stocks end three days of losses and take back nearly all of last week's losses. Not to rain on anyone's parade, but it is worth mentioning that volume was fairly light, probably attributable to the Yom Kippur holiday. Less than 980 million shares changed hands on the New York Stock Exchange, well below the daily average for September of 1.3 billion shares and below the 200-day moving average of 1.42 billion shares.

As is usually the case, the devil is in the details and those details show that Bank of America (BAC) and Citigroup (C) combined to trade more than 442 million shares, so from a volume perspective, Monday's trade provided little worth writing home about. That said, it would be foolish to ignore the pick-up in M&A activity. With September drawing to a close, deals involving U.S. firms have reached $49.1 billion, a robust uptick from the $26.6 billion spent on acquisitions in August and $36.8 billion in July.

M&A Activity

Pharmaceuticals giant Abbott said it will pay $6.6 billion for the pharmaceuticals business of Belgian conglomerate Solvay. The deal looks like it makes sense as the hefty price tag may be more attributable to the euro's strength against the dollar than Abbott overpaying for the business. Abbott said it expects the deal to add $3 billion in sales, with half of that number coming from international markets. The acquisition is expected to add 10 cents a share to per share earnings in 2010 and as much as 20 cents a share by 2012.

The Street apparently took kindly to the Abbott news as investors sent the stock higher by $1.25 for a close at $48.58. Normally, the acquiring company endures a hit to its a share price when a mega-deal is announced. That is exactly what happened with Xerox after the world's largest maker of high-speed printers agreed to acquire Affiliated Computer (ACS) for $6.4 billion. The cash and stock deal values Affiliated Computer at $63.11 a share, 34% higher than Friday's closing price. Xerox shares took it on the chin, tumbling $1.29, or 14%, to $7.68. That made Xerox the biggest loser in the S&P 500.

Not to be outdone is Dow component Kraft Foods (KFT), the world's second-largest food company. Earlier this month, Kraft was rebuffed in its attempt to acquire Cadbury (CBY), the number two candymaker in the world. Well, Kraft is not going quietly into night. The company recently froze its dividend and there was scuttlebutt today that Kraft is preparing a $17.5 billion hostile bid for Cadbury. The new offer represents a fair increase to Kraft's initial offer of $16.7 billion. A combined Kraft-Cadbury would have $50 billion in annual sales. Regardless of what happens with Kraft and Cadbury, one thing is apparent and that is companies with strong balance sheets, like Abbott and Kraft, can brave the weak dollar and look overseas for acquisitions that make sense.

And if you are a believer that today's news is just the beginning of more deals to come, it may be time to look at stocks that benefit from increased M&A activity. Obviously that means the likes of Goldman Sachs (GS) and Morgan Stanley (MS) and some boutique advisors like Jefferies Group (JEF).

All three of those names can be found among the top 10 holdings in the SPDR KBW Capital Markets ETF (KCE). The ETF was up $1.27, or 3.4% today, to close at $38.85, putting it within striking distance of its 52-week high of $42.22. Support seems to be firmly established at the 50-day moving average of $36.35 and if psychological resistance at $40 is broken, the 52-week high could fall in the near-term.

It is reasonable to expect M&A activity might pick-up as the economy rebounds. According to the Commerce Department, U.S. companies had $1.5 trillion in cash flow at the end of June and new data from Bloomberg and Credit Suisse shows that number should rise. Cash relative to share prices will climb to its highest level in 20 years in 2010 when compared to the yield offered by corporate bonds, according to the data.

KCE Chart

There was more than just M&A lifting stocks on Monday as some bellwether tech names contributed to the market's bullish ways. Cisco Systems (CSCO) jumped 4.4% to close at $23.61 after Barclays raised its rating on the stock to ''overweight'' from ''equal weight.'' Cisco is now just 39 cents away from its 52-week high of $24.

Of course, it is hard to have a day where the Nasdaq performs as well it did on Monday without mentioning Apple (AAPL). Combining Research In Motion's (RIMM) dour earnings report last week and its 20% decline over the past five days along with Palm (PALM) slashing prices on the Pre (head to Wal-Mart and you can get a Pre for $80) and it is obvious that the iPhone is easily winning the smartphone war.

The good news from Apple just keeps coming. Today, the company said 2 billion iPhone and iPod apps have been downloaded. Here are some fun anecdotes to put that into context: Nearly one out of every three people in the world has made a purchase from Apple App store. There are now more than 85,000 apps available and over 125,000 developers in the iPhone Developer Program.

In other Apple news France's Orange Telecom announced it would start selling the iPhone in the U.K. before the end of this year and China Unicom (CHU) confirmed it will roll out the iPhone in China next month. Now here is the real good news for Apple shareholders on the China front. Not only will China eventually prove to be the most lucrative smartphone market in the world (as the chart below shows), China Unicom will be charging the equivalent of $732 for each iPhone. That is a far cry above what the iPhone costs in the U.S. and it means the Apple profit machine will likely just keep chugging along. Accordingly, Thomas Weisel raised its price target on Apple shares to $210 from $180.

Smartphone Sales Chart

Financials also chipped in on Monday as the group was the top performer among the 10 industry groups tracked in the S&P 500. Even in the face of more bad news, Bank of America found a way to finish up on the day. Another attorney general wants to take a turn going after BofA and CEO Ken Lewis. This time it is Ohio Attorney General Richard Cordray, who is managing a class action suit on behalf of five pension funds. Cordray claims BofA could owe members of the class action ''billions of dollars.''

Beyond BofA, insurance stocks took their turn in the spotlight today as all 21 companies in the group finished up on the day on news that property and casualty insurers returned to profitability on underwriting in second quarter. That means the group made more on premiums than it paid out in claims and expenses. Hartford Financial (HIG), a name that suffered mightily at the hands of the financial meltdown of 2008, was up almost 11% on Monday and Dow member Travelers (TRV) added 3%.

With the group performing so well, I decided to look for a corresponding ETF that might be of interest and that would be the iShares Dow Jones U.S. Insurance Index (IAK), which added nearly 5% today on nearly triple its average daily volume. I should note that IAK is thinly traded, averaging less than 28,000 shares a day, so it may not be ideal for an intraday trade, but with support in place just above $26 and plenty of room to run to the $31-$32 area, the ETF is probably worth a look at this point.

IAK Chart

If nothing else, Tuesday should bring an uptick in volume as the pre-market news docket is chocked full of reports that have market-moving potential. Weekly chain store sales will be announced at 7:45 AM EST. The final second-quarter GDP reading will be released at 8:30 AM. The consensus estimate is calling for a decline of 1.1%. Case Shiller home prices for July will be released at 9 AM, followed by the all-important consumer confidence number at 10 AM. Consumer confidence for September is expected to come in at 56.7, above the August reading of 54.1 and this number is likely to have a profound impact on how stocks trade tomorrow.

Although earnings season does not truly begin until October 7, there are a few earnings reports out tomorrow that might be worth watching. Before the bell, drugstore operator Walgreen (WAG) is expected to tell investors it earned 39 cents a share on sales of $15.68 billion. There are a few reports after the bell, including Darden Restaurants (DRI) and Jabil Circuit (JBL), but the one to watch is Nike (NKE). The apparel and footwear maker is expected to turn a profit of 97 cents a share on revenue of $4.89 billion. Nike shares are up 15% this year.

Looking at the charts, the Dow did traverse 9800 today, but could not stick there, closing just below 9790. On the bright side, the low of the day was also the opening price. Still, it was somewhat disappointing to see that the positive news from Cisco and bullish insurance sector news that benefitted Travelers, was not enough to get the Dow to a close above 9800.

When the Dow passed 9900 last week, it was sold off with some vigor, so that level remains as the next hurdle to be cleared before 10000 can be talked about seriously. If the Dow has not made its way closer to 10000 before Alcoa's (AA) October 7 earnings report, then earnings season will likely be the deciding factor in the Dow's near-term and 2009 performance.

With 9,600 looking like first support, a violation of that level could take the industrials down to 9300 and from there, the picture is not pretty, but a move to 9000-9100 would take some seriously bearish news.

Dow Chart

With 1080 on the S&P 500 acting as the equivalent of 9900 on the Dow, Monday's close around 1062 means the index has some work to do to make its way back to the next important resistance level. Monday's close is significant in that it keeps the index a fair bit away from Friday's low of 1041, which if broken could portend a move to 1035 and then lower, perhaps to 980. The catalysts do exist this week to spur volatility and perhaps big moves in the major U.S. indexes. Consumer confidence and GDP tomorrow and Friday's jobs report will certainly have their say in this week's performance by stocks and with earnings season right around the corner, investors will discover sooner than later if a 2009 close at 1100 is in the cards for the S&P 500.

S&P 500 Chart

The Nasdaq looked to be in trouble after least week's punk earnings report from RIMM and while that stock is one of the ''four horsemen'' of the Nasdaq, the index shrugged off another big decline for RIMM on Monday and moved higher led by Apple and Cisco. After moving above 2160 last week, the Nasdaq was sold off and now must regain solid footing above 2150 before greener pastures can be conquered. The 2160 area has been acting as resistance for over a year, so a string of closes above that level would be significant, but the Nasdaq will likely need more days like today where stocks like Cisco and Applied Materials (AMAT) contribute to the move higher because Apple cannot do all the Nasdaq's heavy lifting by itself.

A couple of closes below 2100 could mean the Nasdaq tests 2063 and a violation of that level could mean some pain is on the way in the form of a move to 2000.

Nasdaq Chart

This week's data points are going to have a heavy hand in where the major indexes reside at the start of earnings season. Then, it becomes of matter of the S&P 500's ability to not only beat estimates, but show some revenue growth and increased market share. Mergers and acquisitions are nice and certainly a good trend as is the continued spate of good news from marquee names like Goldman Sachs and Apple, but the market is going to require more to get the Dow to 10000 and the S&P 500 to 1100. Simply put, some other stocks are going to have to join this party and do so soon.


New Plays

Trading The Market

by James Brown

Click here to email James Brown


NEW BULLISH Plays

NASDAQ OMX Group - NDAQ - close: 21.86 change: +0.57 stop: 20.90

Why We Like It:
I still like USB as a bullish candidate but I suspect NDAQ will give us a bigger bang for our buck. The stock is bouncing form technical support at its 200-dma and part of its trend of higher lows. Go long NDAQ now with a stop under $21.00. Our first target is $23.75. Our second target is $27.00 but that could take several weeks to get there. FYI: The P&F chart is bullish with a $30 target.

Annotated chart:

Entry on September 28 at $21.86 
Change since picked:     + 0.00   			
Earnings Date          11/05/09 (unconfirmed)    
Average Daily Volume:       2.6 million 
Listed on September 28, 2009    



In Play Updates and Reviews

Entry Points

by James Brown

Click here to email James Brown

I'm seeing a few new entry points on existing plays with this bounce today. Plus, we had one stock tag our trigger with a dip toward support.


BULLISH Play Updates

Airgas Inc. - ARG - close: 48.61 change: +1.21 stop: 44.75

Perfect! ARG pulled back to tag our entry point on Friday and now it's rebounding.

Our first target is $52.45. Our second target is $54.85. More aggressive traders could aim higher. The Point & Figure chart is bullish and predicting a $74 target.

Entry on September 25 at $47.25
Change since picked:     + 1.36   			
Earnings Date          10/22/09 (unconfirmed)    
Average Daily Volume:       1.5 million 
Listed on September 19, 2009    


BE Aerospace - BEAV - close: 19.84 change: +0.78 stop: 17.90

Wow! We got a big bounce out of BEAV today. Shares dipped to $18.82 this morning and then soared toward round-number resistance at $20.00. This move has produced a bullish engulfing candlestick pattern. This goes a long way toward negating last week's bearish reversal/top pattern on the weekly chart. Our first target is $22.25.

Entry on September 12 at $19.19 
Change since picked:     + 0.65   			
Earnings Date          10/27/09 (unconfirmed)    
Average Daily Volume:       834 thousand
Listed on September 12, 2009    


Cullen Frost Bankers - CFR - close: 51.74 change: +1.32 stop: 48.90

Banking stocks helped lead the market higher. CFR gained 2.6% and did so on above average volume. Our first target is $53.00.

Entry on September 26 at $50.42 
Change since picked:     + 1.32   			
Earnings Date          10/21/09 (unconfirmed)    
Average Daily Volume:       419 thousand
Listed on September 26, 2009    


China Mobile Ltd. - CHL - close: 49.94 chg: -0.16 stop: 47.90

Chinese markets were down sharply on Monday so it's not surprising to see CHL open lower. The stock managed to bounce from its lows but struggled under the $50 level all day long. I hesitate to launch new positions at this time.

Our first target is $54.00. Our second target is $58.00. Our time frame is several weeks. FYI: The P&F chart is still bullish with an $83 target.

Entry on    August 31 at $48.73 /gap down entry point
Change since picked:     + 1.21  			
Earnings Date          00/00/?? (unconfirmed)    
Average Daily Volume:       2.3 million 
Listed on  August 29, 2009    


Carpenter Tech. - CRS - close: 24.29 change: +0.38 stop: 21.45

The bounce in CRS today was pretty anemic. I don't see any changes from my weekend comments.

More conservative traders will want to consider an early exit right now. I'm still expecting a dip back toward $22.50-22.00. The action over the last two weeks could be interpreted as a bearish double top pattern.

CRS has already hit our first target. Our secondary target is $27.40.

Entry on September 05 at $21.45 /gap higher entry
                             /originally listed at $20.92
Change since picked:     + 2.84
                             /1st target hit @ 24.90 (+16.0%)
Earnings Date          10/28/09 (unconfirmed)    
Average Daily Volume:       536 thousand
Listed on September 05, 2009    


Darden Restaurants - DRI - close: 36.14 chg: +0.54 stop: 34.49

Tomorrow is our last day. We plan to exit at the closing bell unless DRI hits our target (38.00) or our stop (34.49).

DRI reports earnings on Sept. 29th after the closing bell.

Entry on September 05 at $34.82 
                              /originally listed at $34.41
Change since picked:     + 1.32   			
Earnings Date          09/29/09 (confirmed)    
Average Daily Volume:       2.6 million 
Listed on September 05, 2009    


E M C Corp. - EMC - close: 17.13 change: +0.33 stop: 15.24

EMC delivered a 1.9% bounce. I'm not suggesting anyone chase it here.

Currently our plan is to buy a dip at $15.75. Our target to exit is $18.00. We'll plan to exit ahead of the late October earnings report.

Entry on September xx at $xx.xx <-- TRIGGER @ 15.75
Change since picked:     + 0.00   			
Earnings Date          10/22/09 (unconfirmed)    
Average Daily Volume:      19.6 million 
Listed on September 09, 2009    


Foster Wheeler - FWLT - close: 32.25 change: +1.11 stop: 29.95

FWLT delivered a nice bounce with a 3.5% gain on Monday. Our first target is $34.75. Our second target is $37.50. FYI: The P&F chart is very bullish with a target north of $50.

Picked on September 26 at $ 31.14 *adjusted entry point
Change since picked:       + 1.11
Earnings Date            11/04/09 (unconfirmed)
Average Daily Volume =        2.9 million  
Listed on September 24, 2009         


General Electric - GE - close: 16.76 change: +0.39 stop: 14.75

The widespread market bounce allowed GE to post a 2.3% gain. I'm not suggesting new positions at these levels.

GE has already hit our first target. We're currently aiming for $18.50. I do consider this an aggressive trade so we want to keep our positions small.

Entry on September 14 at $15.49 /gap higher entry
                             /originally listed at $15.35
Change since picked:     + 1.27
                            /1st target hit @ 17.25 (+11.3%)
Earnings Date          10/16/09 (confirmed)    
Average Daily Volume:        83 million 
Listed on September 14, 2009    


Starwood Hotels - HOT - close: 31.77 change: +0.29 stop: 28.95

HOT managed a 0.9% gain but struggled with the $32.00 level. I still suspect a pull back toward the $31-30 zone. Our trigger to open positions is at $31.00.

If triggered our first target is $34.75. Our second target is $37.50. FYI: the Point & Figure chart is bullish with a $53 target. Plus HOT has above average short interest (more than 15% of the float) that can keep the rally going as bears cover their positions.

Entry on September xx at $xx.xx <-- TRIGGER @ 31.00
Change since picked:     + 0.00   			
Earnings Date          10/27/09 (unconfirmed)    
Average Daily Volume:       3.4 million 
Listed on September 19, 2009    


IDEX Corp. - IEX - close: 27.45 change: +0.15 stop: 26.75

The short-term trend is still down. If IEX continues to under perform we'll seriously consider an early exit. I'm not suggesting new positions at this time.

Our first target is $29.65. Our second target is $32.00. The P&F chart is forecasting a $39 target.

Entry on    August 17 at $26.10 *triggered         
Change since picked:     + 1.35   			
Earnings Date          07/19/09 (confirmed)    
Average Daily Volume:       570 thousand
Listed on  July 25, 2009    


J.P.Morgan Chase - JPM - close: 44.81 change: +1.16 stop: 41.90

Banks were popular today and JPM gained 2.6%. The move looks like a new bullish entry point. More conservative traders may want to ratchet up their stop toward the $42.50 level.

Our first target is $47.40. Our second target is $49.80. The plan was to use small position sizes (1/2 to 1/4 normal size). We'll exit ahead of October earnings if JPM last that long.

Entry on    August 21 at $43.50 *triggered (1/2 to 1/4 normal size)
Change since picked:     + 1.31   			
Earnings Date          10/14/09 (confirmed)    
Average Daily Volume:        55 million 
Listed on  July 18, 2009    


Kirby Corp. - KEX - close: 37.07 change: +0.76 stop: 35.85

Today's bounce helps but KEX still has a two-week trend of lower highs. Readers might want to wait for a new move over the 10-dma (currently at 37.62) before launching new positions. Our first target to take profits is at $39.95. Our second and final target is $42.40. FYI: The P&F chart is bullish with a $57 target.

Entry on September 08 at $37.70 /triggered/gap higher entry
Change since picked:     - 0.63   			
Earnings Date          10/29/09 (unconfirmed)    
Average Daily Volume:       310 thousand
Listed on September 05, 2009    


Koppers Holdings - KOP - close: 30.75 change: +0.05 stop: 27.90

Our play on KOP has been triggered. Something happened around the 10 o'clock hour that produced a sharp spike lower. KOP dipped to $29.91 before bouncing back. Our trigger to buy KOP was hit at $30.10.

Our first target is $34.50. Our second target is $37.50 but it could take several weeks to get there. FYI: The P&F chart has a new triple-top breakout buy signal.

chart:

Entry on September 28 at $30.10
Change since picked:     + 0.65   			
Earnings Date          11/05/09 (unconfirmed)    
Average Daily Volume:       159 thousand
Listed on September 16, 2009    


Microsoft - MSFT - close: 25.83 change: +0.28 stop: 23.45

MSFT bounced back toward its recent highs. I'm not suggesting readers chase this move. The $24.50-24.00 level should offer some short-term support. I am adjusting our stop loss to $23.45. Our target is $27.75.

Entry on      July 27 at $23.00
Change since picked:     + 2.83   			
Earnings Date          07/23/09 (confirmed)    
Average Daily Volume:        58 million 
Listed on  July 23, 2009    


NII Holdings - NIHD - close: 29.61 change: -0.13 stop: 24.90

NIHD is still correcting and under performed the market. That's okay for now. We still need to see a pull back. I'm suggesting a trigger at $26.75 with a stop loss at $24.90. If triggered our first target is $31.00. FYI: The P&F chart is very bullish with a $57 target.

Entry on September xx at $xx.xx <-- TRIGGER @ 26.75
Change since picked:     + 0.00   			
Earnings Date          10/22/09 (unconfirmed)    
Average Daily Volume:       3.4 million 
Listed on September 23, 2009    


Pride Intl. Inc. - PDE - close: 30.32 change: +0.98 stop: 26.40

Hmm... we may want to reconsider our entry point strategy on PDE. The $29.00 level is starting to look like decent support. I'll leave our trigger at $27.65 for now but we may want to jump in if the stock clears $31.00 again.

If triggered our first target is $30.45. Our second target is $33.45. We'll plan to exit ahead of the late October earnings report.

Entry on September xx at $xx.xx <-- see TRIGGER @ 27.65
Change since picked:     + 0.00   			
Earnings Date          10/29/09 (unconfirmed)    
Average Daily Volume:       3.7 million 
Listed on September 12, 2009    


Playboy Ent. - PLA - close: 2.92 change: +0.07 stop: 2.59

PLA is still drifting sideways. The bounce today added 2.4%. Readers could buy this bounce but consider adjusting your stop loss higher!

Our second target remains the $3.95 level. FYI: The Point & Figure chart is bullish with a long-term $7.50 target.

Entry on September 01 at $ 2.65
Change since picked:     + 0.25 
                            /take profits 09/16/09 (+17.7%)
Earnings Date          11/05/09 (unconfirmed)    
Average Daily Volume:       370 thousand
Listed on  August 29, 2009    


Pioneer Natural Res. - PXD - cls: 35.98 change: +1.40 stop: 28.95

I don't see any changes from my weekend comments (yet). I'm suggesting readers buy PXD on a dip at $30.50. If triggered our first target is $34.50. Our second target is $38.50. The Point & Figure chart is bullish with a $50 target.

Entry on September xx at $xx.xx <-- TRIGGER @ 30.50
Change since picked:     + 0.00   			
Earnings Date          11/04/09 (unconfirmed)    
Average Daily Volume:       2.1 million 
Listed on September 26, 2009    


Rockwell Automation - ROK - close: 42.85 change: +0.61 stop: 39.95

I will repeat what I said over the weekend. This looks like a new bullish entry point. More cautious traders will want to consider a tighter stop loss. Our first target is the $49.00 mark. Our time frame is several weeks. FYI: The Point & Figure chart is bullish with a $61 target.

Entry on September 10 at $43.71 /gap higher entry
                           /originally listed at $43.15
Change since picked:     - 0.86   			
Earnings Date          11/10/09 (unconfirmed)    
Average Daily Volume:       1.4 million 
Listed on September 10, 2009    


Schlumberger - SLB - close: 60.53 change: +1.05 stop: 56.95

News that Iran was test firing missiles over the weekend pushed oil prices higher and that helped the oil service stocks. The stock has already hit our first target. Our second target is $67.50.

Entry on September 05 at $56.93 /gap higher entry
                             /originally listed at $55.87
Change since picked:     + 3.60
                             /1st target hit @ 62.50 (+9.7%)
Earnings Date          10/23/09 (unconfirmed)    
Average Daily Volume:       8.7 million 
Listed on September 05, 2009    


Market Vectors: Steel - SLX - close: 53.09 change: +0.92 stop: 47.49

We're still sitting on the sidelines with the SLX. The plan is to buy this ETF on a dip at $50.25. Yet the steel sector rallied 1.7% in spite of news that Goldman Sachs was turning bearish on the sector.

If we're triggered our first target is $54.75. Our second target is $59.50. Our time frame is several weeks.

Entry on September xx at $xx.xx <-- TRIGGER @ 50.25
Change since picked:     + 0.00   			
Earnings Date          00/00/00 
Average Daily Volume:       309 thousand
Listed on September 19, 2009    


TEVA Pharmaceuticals - TEVA - close: 51.61 change: +0.64 stop: 49.75

TEVA is pushing up through a cloud of moving averages and it's making progress against a short-term trend of lower highs.

Our first target is $54.75. Our second target is $59.50. Our original time frame was eight to ten weeks.

Entry on    August 17 at $50.50 *triggered                
Change since picked:     + 1.11   			
Earnings Date          11/03/09 (unconfirmed)    
Average Daily Volume:       5.3 million 
Listed on  August 05, 2009    


Ultra(Long) Financials - UYG - close: 6.04 change: +0.37 stop: 5.40

Financials stocks were a big part of today's rally and the UYG gained 6.5%. UYG has already hit our first target. Our second target is $7.00.

This can be a very volatile security. It's not for the faint of heart.

Entry on September 03 at $ 5.29 
Change since picked:     + 0.75
                             /1st target hit @ 6.00 (+13.4%)
Earnings Date          00/00/00 
Average Daily Volume:      47.8 million 
Listed on September 03, 2009    


BEARISH Play Updates

Eli Lilly & Co - LLY - close: 33.04 change: +0.36 stop: 33.15

If LLY can close over its 50-dma near $33.50 I'll drop it as a bearish candidate. Otherwise I don't see any changes from my weekend comments.

I'm suggesting a trigger to open bearish positions at $31.85. If triggered our first target is $30.05. Our second target is $28.25 but that's being overly optimistic. We only have about three weeks before LLY reports earnings and we don't want to hold over the announcement.

Entry on September xx at $xx.xx <-- TRIGGER 31.85
Change since picked:     + 0.00   			
Earnings Date          10/20/09 (unconfirmed)    
Average Daily Volume:       6.6 million 
Listed on September 26, 2009