Option Investor
Play Updates

My Bias is Changing

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Play Editor's Note: There was no follow through on the Wednesday afternoon sell-off. Stocks were acting pretty bullish today. It could just be end-of-year window dressing from some large mutual funds but we're not going to argue with the relative strength. My bias is definitely growing more bullish.

______________ BULLISH Play Updates ______________

Broadcom - BRCM - close: 17.73 change: +0.89 stop: 15.75 *new*

BRCM continues to power higher. The stock added another 5.3% and is challenging potential resistance near $18.00. Shares are up about 10% from our picked price. More conservative traders may want to take some money off the table right here. We're adjusting our stop loss to $15.75. We're also adjusting our exit target. The simple 50-dma has fallen to $19.16. Since this moving average will probably be resistance our new exit target is $18.75.

Picked on October 24 at $16.10 *triggered 10/24
Change since picked: + 1.63
Earnings Date 10/21/08 (confirmed)
Average Daily Volume: 14 million

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Ingersoll-Rand - IR - close: 17.02 change: -0.93 stop: 16.99

If this market rally continues then shares of IR could see a huge retracement/correction higher. We're going to adjust our strategy. We're now suggesting readers buy IR at $18.65. If triggered our target is $22.00. Our new stop loss will be $16.99. More aggressive traders may want to aim higher, say the $25-26 zone.

Picked on October xx at $xx.xx <-- TRIGGER 18.65
Change since picked: + 0.00
Earnings Date 10/24/08 (confirmed)
Average Daily Volume: 4.8 million

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Nucor - NUE - close: 38.90 change: +2.26 stop: 24.90

The action in NUE was definitely bullish. Shares bounced from the $36.00 level again and look ready to challenge heavier resistance just up ahead. While the stock's performance is encouraging we don't want to buy it right here. The $41.00-41.50 zone could be very tough to get through. While not official entry points we would be watching for a breakout over $41.50 or a dip back toward $36.00. We're currently withdrawing our $28.00 entry point strategy to see what happens tomorrow.

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

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Wal-Mart - WMT - close: 54.75 change: -0.27 stop: 53.35*new*

WMT under performed the market today. The stock followed yesterday's failed rally pattern with a bearish engulfing style candlestick today. That's not good news. We are raising our stop loss to $53.35. More conservative traders may want to move their stop closer to today's low (53.81). Wait for a new rally over $56.00 before considering new bullish positions. Our first target is $59.95. Our second target is $63.00.

Picked on October 29 at $56.25 *triggered
Change since picked: - 1.50
Earnings Date 11/13/08 (unconfirmed)
Average Daily Volume: 25 million

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______________ BEARISH Play Updates ______________

*None*

______________ CLOSED PLAYS ______________

Petrobras - PBR - close: 27.02 change: +2.81 stop: 25.65

Our PBR bearish play was over before it started. Last night we said don't open this short play if crude oil is trading over $67.00 a barrel on Thursday morning. Oil had risen to $68 before the stock market opened. Even if you did short PBR the stock gapped open at $25.44 and would have quickly hit our stop loss at $25.65 closing the play. The action in PBR is definitely bullish. We would watch for a dip back toward $25.00 as a possible entry point to switch directions and buy the stock.

chart:
PBR

Picked on October 29 at $xx.xx /never opened
Change since picked: + 0.00 /originally listed at $24.21
Earnings Date 11/10/08 (unconfirmed)
Average Daily Volume: 31 million

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PetsMart - PETM - close: 19.40 change: +0.26 stop: 20.05

PETM displayed some early morning strength with a gap open higher at $19.51 and a spike to $20.22 before paring its gains. The stock hit our stop loss at $20.05. If shares can trade over $20.25 it might be a bullish entry point to buy the stock.

chart:
PETM

Picked on October 26 at $18.53 /stopped out 20.05
Change since picked: + 0.87
Earnings Date 11/19/08 (confirmed)
Average Daily Volume: 3.3 million

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Ultra(Long)Russell2000 - UWM - close: 23.65 chg: +2.32 stop: 23.01

Stocks reversed higher again early this morning and the UWM, which is the double-long on the Russell 2000 small cap index, actually gapped open higher at $22.74 and quickly hit our stop loss at $23.01 closing the play (26-cent loss). The move today is definitely a bullish one and we can start looking for a bullish entry point to get long.

chart:
UWM

Picked on October 29 at $22.74 *gap open entry/stopped out 23.01
Change since picked: + 0.91 /originally listed at $21.33
Earnings Date 00/00/00
Average Daily Volume: 4.2 million

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