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Call Updates

Aetna Inc - AET - close: 131.10 change: +4.05 stop: 125.00*new*

Insurance giant AET surged more than three percent on Tuesday to breakout over resistance at the $130 level and close at new all-time highs. We can't find any specific news to account for the big gain other than market-wide bullishness finally inspiring some buying pressure. Short-term technical oscillators are bullish and its MACD is extremely close to producing a new buy signal. There are only nine days left before AET's earnings report and the stock has a good chance of hitting our target range of $135-140. We are raising our stop loss to $125.00.

Picked on January 13 at $127.61
Change since picked: + 3.49
Earnings Date 02/10/05 (confirmed)
Average Daily Volume = 2.2 million

Invitrogen - IVGN - close: 68.93 chg: +0.22 stop: 66.00

We are growing a little concerned that IVGN is not participating in the current market rally. Watch the BTK biotech index for a move over 530-535, which should be a bullish breakout over its five-week trend of lower highs. We would continue to wait for IVGN to trade over $70.00 or better 70.50 before considering new longs. The company confirmed that its Q4 earnings will come out on February 17th.


 

Picked on January 27 at $ 70.05
Change since picked: - 1.12
Earnings Date 02/17/05 (confirmed)
Average Daily Volume = 800 thousand

KB Home - KBH - close: 111.75 change: +3.10 stop: 105.00 *new*

The homebuilders are really showing their strength. The DJUSHB index added another 2.13 percent and KBH out performed its peers with a 2.85 percent gain to close at a new high above resistance near $110. Volume has been rising during KBH's rally and today's volume was well above average. Both the DJUSHB index and KBH have produced new MACD buy signals on their daily chart. Short-term traders may want to strongly consider taking profits here or significantly tightening their stop loss. We're only nominally raising our stop loss to $105.00. Remember that our target is the $115.00-120.00 range.

Picked on January 13 at $106.00
Change since picked: + 5.75
Earnings Date 03/17/05 (unconfirmed)
Average Daily Volume = 1.1 million

Texas Industries - TXI - close: 63.95 change: +0.41 stop: 59.95

Once again TXI is challenging resistance in the $64-65 range and its subtle trend of lower highs. Oscillators are bullish and its MACD has produced a new buy signal but TXI has been rebuffed here before. Short-term traders may want to consider exiting for a profit here. New positions can be considered on a breakout over $65 or a pull back toward the 50-dma.


 

Picked on January 09 at $ 60.18
Change since picked: + 3.77
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 238 thousand

Put Updates

Apollo Group - APOL - close: 79.74 chg: +1.56 stop: 81.01

Heads up! Tuesday has proven to be day two in the market's rebound and this is putting pressure on our bearish plays. Yesterday APOL produced a failed rally at round-number resistance at the $80.00 level but now shares are bouncing again with the market. The bounce has turned the short-term technicals bullish. If APOL pushes past the $80 level it could spell bad news for the bears. More aggressive traders may want to adjust their stop above the 200-dma and the $82 mark to put just above the trendline of lower highs.


 

Picked on January 23 at $ 77.61
Change since picked: + 2.13
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 2.4 million

Eli Lilly - LLY - close: 54.76 change: +0.52 stop: 56.01

LLY is also being caught up in the market's two-day bounce but shares remain under resistance at the $55.00 level. Fortunately, the DRG drug index continues to under perform the market and for all practical purposes has not participated in the market rebound. We remain bearish but if LLY trades over the $55 level we'll turn defensive.


 

Picked on January 30 at $ 53.58
Change since picked: + 1.18
Earnings Date 01/26/05 (confirmed)
Average Daily Volume = 4.0 million

Dropped Call

Pulte Homes - PHM - close: 67.78 chg: +1.70 stop: 62.49

PHM managed to out perform its peers in the home building sector and the broader indices with a 2.57 percent rally on Tuesday. Volume has been above average on the two-day bounce, which suggests more strength ahead. We suspect that PHM will continue to rally tomorrow into its Wednesday earnings report after the closing bell but we are playing it safe by exiting early. We would not hold over the report even though our expectations are positive. Wall Street is looking for $3.05 per share.


 

Picked on January 16 at $ 65.99
Change since picked: + 1.79
Earnings Date 02/02/05 (confirmed)
Average Daily Volume = 1.5 million

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