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Call Play Updates

Aetna Inc - AET - close: 126.75 change: +1.85 stop: 119.99

AET managed to out perform the broader indices today with a 1.48 percent bounce on Thursday but we remain cautious. The IUX insurance index doesn't look very healthy following yesterday's failed rally at the 320 level. The IUX is currently hovering above its 200-dma and a breakdown would be negative pressure on shares of AET. Right now we'd wait for a move over $129 or $130 before considering new positions.

Picked on January 13 at $127.61
Change since picked: - 0.86
Earnings Date 02/10/05 (confirmed)
Average Daily Volume = 2.2 million


Alliance Resource - ARLP - close: 71.33 chg: -1.23 stop: 69.00*new*

We remain bullish on ARLP but the short-term trend of lower highs makes us very cautious, especially since ARLP didn't participate much in the recent two-day market bounce. Readers can still use a bounce from the $70 level and its 50-dma as a new bullish entry point but conservative traders may want to wait for a move over $75.00. If ARLP can breakout over the $75 level it would produce a new quadruple-top breakout buy signal on its P&F chart. We are raising our stop loss to $69.00 just under the 50-dma.

Picked on January 10 at $ 69.80
Change since picked: + 1.53
Earnings Date 10/28/04 (confirmed)
Average Daily Volume = 115 thousand


Invitrogen - IVGN - close: 69.59 chg: +0.49 stop: 66.00

IVGN managed to continue its rally from Wednesday into Thursday morning and shares broke out over the $70.00 mark. Our entry point to buy calls was at $70.05 so the play has been opened. Unfortunately, the BTK biotech index could not hold on to its earlier gains and pulled on IVGN, which slipped back under the $70 level. Readers can watch for a dip and bounce from $68.00 as a new entry point or we suggest more conservative traders wait for IVGN to trade back above the $70 level and probably $70.50 before considering new bullish positions.

Picked on January 27 at $ 70.05
Change since picked: - 0.46
Earnings Date 02/17/05 (unconfirmed)
Average Daily Volume = 800 thousand


KB Home - KBH - close: 105.77 change: -1.75 stop: 99.50

The homebuilders didn't do much on Thursday as the DJUSHB home construction index gave back most or all of its Wednesday's gains with today's 1.75 percent decline. KBH paced the decline in the sector and pull back toward support in the $105 region. We remain bullish on the stock and the group but it would probably be safer to wait for KBH to breakout from its current short-term trading range before considering new bullish positions. Watch for a move over $108.00. Conservative traders may want to tighten their stops toward the $104 level. If the DJUSHB breaks down under the 800 level we may consider an early exit as well.

Picked on January 13 at $106.00
Change since picked: - 0.23
Earnings Date 03/17/05 (unconfirmed)
Average Daily Volume = 1.1 million


Pulte Homes - PHM - close: 64.39 chg: -1.14 stop: 61.00

PHM paced the decline in the homebuilding sector as well and gave back most of Wednesday's gains. We only have four trading days left before PHM's February 2nd after the closing bell earnings report. Readers may want to exit early to minimized losses. We will consider exiting tomorrow, especially if PHM produces any sort of bounce.

Picked on January 16 at $ 65.99
Change since picked: - 1.60
Earnings Date 02/02/05 (confirmed)
Average Daily Volume = 1.5 million


Pixar - PIXR - close: 88.08 change: -0.40 stop: 84.00

PIXR has bounced back into its short-term trading range between $87 and $90. We remain bullish on the stock and its point-and-figure chart supports our bias with a buy signal pointing to a $100 target. Traders may feel more comfortable waiting for PIXR to breakout over resistance at $90.00 before initiating new bullish plays.

Picked on January 18 at $ 88.24
Change since picked: - 0.16
Earnings Date 02/10/05 (confirmed)
Average Daily Volume = 934 thousand


Texas Industries - TXI - close: 61.55 change: -0.19 stop: 59.00

TXI is coming to a decision point. The stock has been consolidating lower the past two weeks under a steady trend of lower highs. Now shares are approaching round-number support at $60.00 and its longer-term support at the rising 50-dma. Almost every time TXI pulls back toward the 50-dma the stock looks bearish but it has consistently bounced for months now. We expect it to bounce again but we're keeping our stop loss at $59.00 just under this support level. It is worth noting that there is a bearish divergence between the stock price and its MACD indicator.

Picked on January 09 at $ 60.18
Change since picked: + 1.37
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 238 thousand


Put Play Updates

Adobe Systems - ADBE - close: 56.17 change: +0.16 stop: 57.11*new*

Shares of ADBE have bounced from the $55.30-55.35 range for three days in a row now. We've been suggesting that short-term traders take profits early for four days now. The sideways consolidation could be a potential bottom forming or it could just be a speed bump on the way lower. We are going to lower our stop loss to $57.11, right at the simple 10-dma. We are not suggesting new positions and we're still suggesting short-term traders consider an exit under $56.00. We will adjust the newsletters exit to $55.35 and if ADBE hits it again we'll close the play. Tomorrow will be exiting. The MSFT earnings after the bell were positive and that could spark a ramp higher in the software sector. Be prepared.

Picked on January 06 at $ 58.99
Change since picked: - 2.82
Earnings Date 03/17/05 (unconfirmed)
Average Daily Volume = 2.3 million


Apollo Group - APOL - close: 77.02 chg: -0.10 stop: 81.01

We are encouraged by the steady trend lower in shares of APOL but we wish the stock would pick up the pace. The descent has been a slow one. Tonight after the bell rival educator DeVry (DV) appeared to miss earnings by 3 cents per share and this could put pressure on the education sector tomorrow. A breakdown under the $76 level (and the 100-dma) would be good news for the bears.

Picked on January 23 at $ 77.61
Change since picked: - 0.59
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 2.4 million


Black & Decker - BDK - close: 79.56 chg: +0.09 stop: 82.49

This morning BDK produced a minor oversold bounce following Wednesday's sharp decline but the stock failed to hold on to its gains. Today's close back under the $80 level is positive for the bears and we would expect some follow through tomorrow. More conservative traders can wait for a new relative low under 78.90 before initiating new positions.

Picked on January 26 at $ 79.47
Change since picked: + 0.09
Earnings Date 01/26/05 (confirmed)
Average Daily Volume = 659 thousand


Nike Inc - NKE - close: 86.45 chg: +1.30 stop: 87.01

NKE produced a 1.5 percent bounce on Thursday as rival Reebok (RBK) turned in a positive earnings report. RBK beat estimates by 6 cents and guided higher going forward. Shares of RBK added 6 percent but closed well off its highs for the session. We remain untriggered in NKE and wait for shares to break the $85 level and hit our entry point at $84.65. Until then we're happy to sit on the sidelines. More aggressive traders can wait for a failed rally under the 10-dma or 50-dma as a potential entry point.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 1.1 million



Kmart Holdings - KMRT - close: 88.27 chg: +1.87 stop: 92.49

It would appear that Monday's high-volume breakdown under support at the $90.00 level was nothing more than a bear-trap and we were sucked right in. We alerted readers that KMRT could see some volatility as Sears (S) reported earnings on Thursday and that's exactly what happened. Sears' net profits were down 86 percent from a year ago but the company still beat analysts' estimates by 10 cents this morning. This helped propel KMRT to a 4.4 percent rally and shares traded past our stop loss at $92.49.

Picked on January 24 at $ 89.90
Change since picked: + 4.45
Earnings Date 03/16/05 (unconfirmed)
Average Daily Volume = 2.4 million


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