Option Investor
Play Updates

Running of the Stops

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Play Editor's Note: It's tough to be bullish when the market serves up the worst two day decline since the crash of 1987. We were expecting a pull back but this correction was steeper than expected and hit a lot of stop losses. We're going to wait and see how the market reacts to the jobs report tomorrow before adding new candidates to the newsletter.


BULLISH Play Updates

Lam-Research - LRCX - close: 20.84 change: -2.19 stop: 19.95

The correction was steeper than expected. We would have been better off sticking to our original plan to buy a dip in the $21-20 zone. Instead our adjusted entry point is $22.00, which was triggered today. At this point we would wait and watch for a dip to and bounce from the $20.00 region before considering new positions. Our target is $25.85.

chart:
LRCX

Picked on November 06 at $22.00 *triggered     	
Change since picked:     - 1.16	  
Earnings Date          10/22/08 (confirmed)
Average Daily Volume:       4.0 million   


CLOSED BULLISH PLAYS

Alcoa Inc. - AA - close: 10.26 change: -1.54 stop: 10.45

It was a nasty day for stocks with many delivering declines worse than Wednesday. AA was one such stock with a 13% drop. The stock hit our trigger to buy it at $11.50 and kept right on going to hit our stop loss at $10.45.

chart:
AA

Picked on November 06 at $11.50 *triggered/stopped same day
Change since picked:     - 1.24   			
Earnings Date          01/08/09 (unconfirmed)    
Average Daily Volume:      24.2 million     


American Express - AXP - close: 24.92 change: -2.91 stop: 24.75

AXP is another stock that performed worse today than yesterday. The stock lost more than 10% and hit our trigger to buy it in the $26.50-25.50 zone and just kept on going. The stock hit our stop loss at $24.75 late in the day.

chart:
AXP

Picked on November 06 at $26.50 *triggered/stopped same day
Change since picked:     - 1.58  			
Earnings Date          10/20/08 (confirmed) 	
Average Daily Volume:      19.4 million   


BB&T Corp. - BBT - close: 31.40 change: -2.15 stop: 31.75

Financials plunged today and BBT was part of the crowd with a 6.4% decline that sent it right past our stop loss at $31.75.

chart:
BBT

Picked on November 05 at $34.00 *triggered /stopped 31.75
Change since picked:     - 2.60 	  
Earnings Date          10/16/08 (confirmed) 
Average Daily Volume:      10.5 million  	


BHP Billiton - BHP - close: 35.60 change: -4.76 stop: 35.99

BHP was one of several stocks that posted double-digit declines today. Our plan was to buy a dip in the $37.75-37.00 zone with a stop at $35.99. The problem was how BHP opened at $38.65 and traded almost straight down toward $35.00 hitting our stop along the way.

chart:
BHP

Picked on November 06 at $37.75 *triggered/stopped same day
Change since picked:     - 2.15	  
Earnings Date          10/30/08 (unconfirmed)
Average Daily Volume:       6.7 million  


Broadcom - BRCM - close: 16.39 change: -0.67 stop: 16.60

BRCM gapped down under its bullish trend of higher lows this morning. The stock opened at $16.60, which happened to be our new stop loss. The stock eventually sank to its 20-dma before bouncing.

chart:
BRCM

Picked on October 24 at $16.10 *triggered 10/24 /stopped 16.60
Change since picked:    + 0.29 	  
Earnings Date         10/21/08 (confirmed) 
Average Daily Volume:       14 million 


CIENA Corp. - CIEN - close: 7.81 change: -0.85 stop: 8.49

Shares of CIEN also gapped down this morning. The stock opened at $8.50 and just plunged to settle at a 9.8% loss. Our stop loss was at $8.49. At this point we would expect CIEN to retest its lows and what should be support near $7.00 soon.

chart:
CIEN

Picked on November 03 at $ 9.00 *triggered 11/03/stopped 8.49
Change since picked:     - 1.19	  
Earnings Date          12/11/08 (unconfirmed) 	 
Average Daily Volume:       5.9 million 


Ingersoll-Rand - IR - close: 16.20 change: -1.71 stop: 16.99

IR has now completely rolled over and looks poised to retest its lows under $16.00 soon. The stock lost another 9.5% and hit our stop loss at $16.99 ending the play.

chart:
IR

Picked on October 31 at $18.65 /stopped out 16.99
Change since picked:    - 2.45  	 
Earnings Date         10/24/08 (confirmed)
Average Daily Volume:      4.8 million     


Nat. Oilwell - NOV - close: 27.72 change: -2.20 stop: 27.25

With oil crashing lower shares of NOV gapped open at $29.18, which was in our $29.50-29.00 entry zone to buy the stock. Shares quickly fell to $25.81 before paring its losses. Our stop loss was hit at $27.25.

chart:
NOV

Picked on November 06 at $29.18 gap down entry/stopped out 27.25
Change since picked:     - 1.46   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:      13.5 million     


Nucor - NUE - close: 32.92 change: -2.58 stop: 33.75

Almost anything related to metals was hit hard today. The earnings warning from ArcelorMittal (MT) was pretty drastic. NUE lost 7.2% and hit our stop loss at $33.75.

chart:
NUE

Picked on November 05 at $36.50 *triggered     	
Change since picked:     - 3.58	  
Earnings Date          01/22/09 (unconfirmed) 
Average Daily Volume:       9.7 million   


Wal-Mart - WMT - close: 53.49 change: -0.64 stop: 53.90

Wal-Mart actually gapped open higher at $55.58, which was a gift to exit as the market plunged. Traders quickly unloaded and WMT hit our stop loss at $53.90.

chart:
WMT

Picked on October 29 at $56.25 *triggered /stopped out 53.90
Change since picked:    - 2.76	 
Earnings Date         11/13/08 (unconfirmed) 
Average Daily Volume:       25 million   


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