Option Investor
Play Updates

We're still looking for a dip

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---------------------- BULLISH Play Updates ----------------------

Broadcom - BRCM - close: 15.64 change: +0.23 stop: 14.49

BRCM continues to show relative strength. When the market opened on Friday BRCM gapped down to short-term support near $14.50 and then quickly rebounded. The stock broke through resistance near $16.00 and hit our trigger to buy the stock at $16.10. Volume was above average on the move, which is another positive sign. We would still consider new positions now but would suggest waiting for a dip near $15.00 or a new move over $16.10 again. Our target is $19.50.

Annotated chart:

Picked on October 24 at $16.10 *triggered 10/24
Change since picked: - 0.46
Earnings Date 10/21/08 (confirmed)
Average Daily Volume: 14 million


Nucor - NUE - close: 35.01 change: +1.13 stop: 24.90

NUE displayed quite a bit of relative strength on Friday. Shares dipped toward $30.00 and then rallied back to the $36.00 level intraday. Yet the high was another lower high in the stock's overall pattern. Currently we are suggesting readers buy NUE on a dip into the $28.00-26.00 zone around its 2008 lows. Nimble and more aggressive traders could try and short NUE into the $28-26 area. We are going to list an alternative entry point just in case NUE rallies higher. That entry point is $38.05 and we'd use a stop loss at $35.75 if triggered at $38.05 with a $44.50 target.

Annotated chart:

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/22/09 (unconfirmed)
Average Daily Volume: 9.7 million


Wal-Mart - WMT - close: 51.40 change: -1.36 stop: 41.95

WMT bounced around the $50-53 zone but the trend was bearish. You're probably thinking WMT may never trade near $45 again. The concept here is that one of these days we may get another horrendous, panicked sell-off and WMT sees a huge intraday spike lower. That's when we want to be triggered.

Entry point #1 is to buy a dip in the $45.00-44.00 zone. If triggered at $45.00 we will have two targets. Our first target is $49.50. Our second target is $54.00. (Note this is an adjustment. Our previous entry price was 44.50.)

Entry points #2 is to buy a breakout at $56.25. If triggered at $56.25 our stop will be $52.35. Our first target will be $59.95. Our second target will be $63.00.

Annotated chart:

Picked on October xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/13/08 (unconfirmed)
Average Daily Volume: 25 million

--- ---------------------- BEARISH Play Updates ----------------------

Wal-Mart - WMT - close: 51.40 change: -1.36 stop: 55.55

As we said in the WMT long update the stock just bounced around the $50-53 region but the intraday action was bearish. More conservative traders might want to tighten their stops closer to the $54.00 level. You could open new positions here if you had a tight stop loss. Our target is $48.00.

Annotated chart:

Picked on October 19 at $53.77
Change since picked: - 2.37
Earnings Date 11/13/08 (confirmed)
Average Daily Volume: 25.5 million

--- ---------------------- CLOSED PLAYS ----------------------

Intel Corp. - INTC - close: 14.28 change: -0.23 stop: 12.45

All right. I have to admit that the action in INTC doesn't look very good. We continue to see lower highs. The safer bet is to just exit right now and take a minor loss. We would keep INTC on your watch list. A dip near $13.00 is probably a bullish entry point but use a tight stop.

Annotated chart:

Picked on October 22 at $14.30 *triggered 10/22/08
Change since picked: - 0.02 /exiting early
Earnings Date 10/14/08 (confirmed)
Average Daily Volume: 74 million


Ultra QQQ ProShares - QLD - close: 28.58 chg: -1.75 stop: 27.25

Our new bullish play on the QLD was dead before it even started. The Friday morning panic had the QLD gapping open lower at $25.58, which was well below our stop loss. The play would have never opened.


Picked on October 23 at $xx.xx <-- never opened
Change since picked: + 0.00 /originally listed at 30.33
Earnings Date 00/00/00
Average Daily Volume: 31 million


Ultra(long)Russ.2000 - UWM - cls: 19.91 chg: -1.95 stop: 19.45

The UWM, another double-long ETF this time on the Russell 2000, also gapped down on Friday morning. Unfortunately, the play had already opened. Shares of the UWM opened at $18.14 on Friday. Our stop loss was at $19.45. Ouch!


Picked on October 23 at $20.65 *triggered
Change since picked: - 0.74 /stopped out 18.14 gap down exit
Earnings Date 00/00/00
Average Daily Volume: 3.3 million


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