Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Long Play Updates

ALON USA Ener. - ALJ - close: 30.70 chg: -0.44 stop: 27.75

It was something of a rocky week for ALJ. The stock broke out over significant resistance at the $30.00 level only to reverse lower after hitting the 100-dma. Traders bought the dip near its 10-dma on Friday morning. Readers can choose to go long the stock now or wait for a potential dip closer to the $30 level. Looking at ALJ's intraday chart for Friday odds of a continuation of the dip look pretty good. More conservative traders may want to tighten their stops. The $29.00 level is short-term support. Our target is the $33.50-34.00 range. The company did put out some news on Friday about shutting down a sulfur recovery unit in Texas to repair a leak. We doubt the news had any impact on the stock.

Picked on November 21 at $30.15
Change since picked: + 0.55
Earnings Date 11/07/06 (confirmed)
Average Daily Volume: 504 thousand


Chesapeake Energy - CHK - cls: 34.09 chg: +0.06 stop: 31.99

Shares of CHK look primed to climb higher next week. This past week shares broke out over resistance near $33.20 and $33.75. On Friday shares experienced some profit taking but traders bought the dip near $33.20. This looks like an attractive entry point to launch new bullish positions. Weekly and daily chart technicals are bullish. Plus, the P&F chart has a triple-top breakout buy signal with a $47 target. Our target is the $38.00-40.00 range.

Picked on November 29 at $33.98
Change since picked: + 0.11
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume: 7.5 million


Carrizo Oil & Gas - CRZO - cls: 33.39 chg: +0.16 stop: 29.75

CRZO is another oil stock that experienced some profit taking on Friday morning. However, broken resistance near $32 acted as new support and traders bought the dip. The rebound looks like a new entry point to go long the stock. The strong volume all week long is a positive sign for the bulls. Our target is the $35.50-36.00 range. FYI: The P&F chart's bullish target has risen from $46 to $49 with today's gain.

Picked on November 29 at $32.15
Change since picked: + 1.24
Earnings Date 11/09/06 (confirmed)
Average Daily Volume: 345 thousand


GulfMark - GMRK - close: 40.22 change: -0.05 stop: 36.99

It looks like full speed ahead for GMRK. Shares broke out from a sideways consolidation pattern a few days ago and GMRK is trading at new all-time highs. The close over potential round-number resistance at $40 is a good sign. Plus, traders were quick to buy the dip on Friday near $39.20. Volume has been strong on the bullish breakout. The P&F chart is very optimistic with a $67 target. We're aiming for the $42.50-43.00 range.

Picked on November 28 at $38.70
Change since picked: + 1.52
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume: 108 thousand


Noble Energy - NBL - close: 52.99 change: -0.51 stop: 48.99

The trading in NBL on Friday took on a familiar pattern. Several stocks in the oil group saw some profit taking on Friday morning only to rebound by the close to significantly pare their losses. The overall pattern for NBL remains bullish given the breakout over resistance at the $51 and $52 levels. Volume has been strong on the rally, which is positive. We would use Friday's bounce as a new entry point. If you think NBL is due for more of a dip then look for a rebound near $51.00 as a new entry point. We would expect the $50.00-51.00 region to act as new support. The P&F chart looks very bullish with a $76 target. Our target is the $57.50-60.00 range.

Picked on November 29 at $53.11
Change since picked: + 0.12
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume: 1.3 million


ONEOK Inc. - OKE - close: 43.67 change: +0.43 stop: 41.35

Shares of OKE continue to show relative strength. This past week the stock broke out from a multi-week trading range. The rally produced a new technical buy signal and new all-time highs. OKE tends to stair-step higher so we're only aiming for the $45.00-46.00 level before it plateaus again.

Picked on November 28 at $42.25
Change since picked: + 1.42
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume: 547 thousand


Raytheon - RTN - close: 51.30 change: +0.26 stop: 49.85

Defense stocks were generally higher this past week but the rally seemed to stall on Thursday and Friday. RTN experienced the same slow down in momentum but shares continue to look bullish with a positive trend of higher lows. Traders bought the dip, several times, at the $51.00 level on Friday. We would still consider new positions here or if you expect a dip look for a bounce near $50 as a potential entry point. Our target is the $54.50-55.00 range.

Picked on November 29 at $51.05
Change since picked: + 0.25
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume: 1.5 million


Worthington Ind. - WOR - close: 18.42 chg: -0.08 stop: 17.85

WOR suffered some profit taking on Friday but the bullish trend is still intact. This looks like it's going to be a long and slow process creeping higher and pushing through technical resistance at its 100-dma and 200-dma still overhead. Broken resistance at $18.00 should now act as support. On Thursday we raised our stop loss to $17.85. Our target is the 19.85-20.00 range.

Picked on November 19 at $17.96
Change since picked: + 0.46
Earnings Date 12/19/06 (unconfirmed)
Average Daily Volume: 868 thousand

Short Play Updates

Fannie Mae - FNM - close: 56.83 chg: -0.20 stop: 58.25 *new*

The trend in FNM looks bearish once the stock broke down under support near $58.00 and its 50-dma. This past week has seen something of an oversold bounce that thus far has failed to push past short-term resistance at the 10-dma. We are somewhat concerned that the rebound may not be over yet. Readers may want to watch for another bounce attempt near the $58 region before considering new shorts. We're going to inch our stop loss down to $58.25. We would still hesitate to open new bearish positions if the major indices are moving higher. Our short-term target is the $54.00 level.

Picked on November 26 at $57.39
Change since picked: - 0.56
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume: 3.2 million


WebMD - WBMD - close: 35.58 change: -0.95 stop: 35.26

It looks like the oversold bounce in WBMD has already failed. Friday's trading produced a bearish reversal near $37.50 and shares lost 2.6%. Aggressive traders might want to consider new short positions now. We are suggesting that readers wait for a decline under support near $34.00. The stock has significant support near $34.00 so we're suggesting a trigger to open positions at $33.70, which is under the March 2006 low. The latest data only lists short interest as 2.7% of the company's eight million-share float. Yet we suspect that number is an error and that short interest is probably much higher. The risk here is that with a lot of short interest any sudden rebound can produce a short squeeze. Aggressive traders may want to use a wide stop loss to give WBMD room to move. We're going to try and limit our risk with a stop loss at $35.26. Our target will be the $30.25-30.00 range.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/02/06 (confirmed)
Average Daily Volume: 94 thousand

Closed Long Plays

A.G.Edwards - AGE - close: 57.46 change: -0.39 stop: 55.95

The broker-dealer and investment-related stocks continue to look vulnerable. The XBD index lost 1.2% and under performed the rest of the financials. Shares of AGE dipped to $56.70 before bouncing back from its lows. We suggested on Thursday that if AGE was weak we'd exit early and we're going to follow through on that suggestion.

Picked on November 15 at $58.15
Change since picked: - 0.69
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume: 386 thousand


Ladish Co - LDSH - close: 33.41 change: -0.33 stop: 32.99

We are dropping LDSH as a potential bullish candidate. The stock has been under performing the past couple of weeks. More patient traders may want to keep an eye on it. We've been waiting for a breakout over resistance with a trigger to go long at $35.55. The trigger has not been hit so we're dropping it unopened.

Picked on November xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/20/06 (confirmed)
Average Daily Volume: 241 thousand

Closed Short Plays


Premier Investor Play Update Archives