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Call Updates

Coper Industries - CBE - cls: 69.49 chg: +0.95 stop: 67.95

Bulls can breathe a small sigh of relief. CBE isn't out of the woods yet but the stock managed a bounce from the $68.50 level and volume came in well above average, which is normally bullish. The longer-term picture is still positive but we would wait for CBE to bounce back over the $70.00 level before considering new bullish positions.

Suggested options:
Wait for the move over $70.00 and then consider the April calls.

BUY CALL APR 65 CBE-DM OI=725 current ask $5.30
BUY CALL APR 70 CBE-DN OI=380 current ask $1.85


 

Picked on February 03 at $ 70.01
Change since picked: - 0.52
Earnings Date 01/25/05 (confirmed)
Average Daily Volume = 436 thousand

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Eagle Materials Inc - EXP - close: 80.80 chg: -0.40 stop: 78.50

One of our newest plays, EXP, has not been off to the strongest start. Granted the market has been going nowhere this week so a little profit taking shouldn't be a surprise for us. We would be cautious about initiating new bullish positions in EXP, especially with the technical oscillators on the major averages looking weak. Wait for shares to trade back above the $83 or $84 levels before initiating new plays. The P&F chart remains bullish but if shares drop under the $78 level it would reverse the buy signal into a sell signal.

Suggested Options:
Wait for EXP to trade back over the $83 or $84 level and then consider the April calls.


 

Picked on February 16 at $ 82.90
Change since picked: - 2.10
Earnings Date 01/26/05 (confirmed)
Average Daily Volume = 107 thousand

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Hartford Financial - HIG - cls: 71.23 chg: -0.04 stop: 69.95

We have recently turned cautious on HIG with the pull back in the share price and the IUX insurance index. Technicals on both have turned sour but now after a few down days both HIG and the IUX could be due for a bounce. We raised our stop to $69.95 on Thursday counting on the $70.00 level to act as round-number, psychological support. More aggressive traders may want to consider leaving their stop under the $69.00 level, which was the real resistance for HIG over the last year and thus this level should now be the true support for it. The longer-term P&F chart remains bullish with a $102 target. Our target remains the $78-80 region. We would not suggest new bullish positions until we see some sign of a bounce. Look for a move over the $72 level before considering new plays. Keep an eye on the IUX index for a bounce from the 325 level.

Suggested Options:
We would not suggest new positions at this time. Wait for a bounce over $72.00. If this occurs bulls can use the March or June calls.


 

Picked on February 06 at $ 71.17
Change since picked: + 0.06
Earnings Date 01/26/05 (confirmed)
Average Daily Volume = 1.2 million

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Kmart Holding - KMRT - close: 100.21 chg: -0.31 stop: 97.50*new*

No change in our stance on KMRT. The stock continues to consolidate its breakout over the $100 level and its trendline of resistance back in early February. Unfortunately, the technical picture is deteriorating and the stock looks vulnerable. The longer-term P&F chart remains very bullish but short-term it would not surprise us to see shares pull back and retest the simple 50-dma near $98.00. If this occurs and KMRT bounces from the 50-dma it would look like a new bull-flag pattern. However, to allow KMRT room to maneuver we are going to have to bend the rules a bit. Normally we never want to move a stop loss backward. Yet this time it seems worthwhile to drop our stop loss from $98.50 to $97.50 and give KMRT room to dip toward the 50-dma. In reality we would not want to consider new bullish positions until KMRT traded back above the $103 level. Keep an eye on the RLX retail index, which is struggling under its own 50-dma and two-month trend of lower highs following what also looks like a double-top.

Suggested Options:
We would not suggest new positions at this time.


 

Picked on February 13 at $103.02
Change since picked: - 2.81
Earnings Date 03/16/05 (unconfirmed)
Average Daily Volume = 2.5 million

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Loews Corp - LTR - close: 72.03 chg: -0.17 stop: 69.95

We are currently waiting for LTR to bounce. We initiated the play on Tuesday with the breakout over long-term resistance at $72.00-72.50. Yet our suggestion was to wait for a pull back toward the $72 level and then buy a bounce. Well, LTR has accomplished the first part and pull back toward the $72 level (and its 10-dma). Now we just need to see a bounce. Look for a move over $73.00-73.50 as the clue to consider new longs. Keep an eye on the IUX insurance index as well, which needs to bounce from the 325 level.

Suggested Options:
We have a four-to-six week time horizon so we're suggesting the March or June calls.

BUY CALL MAR 70 LTR-CN OI=328 current ask $3.00
BUY CALL MAR 75 LTR-CO OI=427 current ask $0.55

BUY CALL JUN 75 LTR-FO OI=526 current ask $2.00


 

Picked on February 15 at $ 74.15
Change since picked: - 2.12
Earnings Date 02/10/05 (confirmed)
Average Daily Volume = 452 thousand

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Nova Chemicals - NCX - close: 47.52 chg: +0.29 stop: 44.95

We are still sitting on our hands here with NCX. We are using a TRIGGER to go long at $48.01 to catch a breakout over resistance. If NCX can rally to a new high it will produce a new quadruple-top breakout buy signal on its P&F chart. Once triggered our target will be the $52.50-54.00 range. Keep in mind that if the major indices turn south we would strongly hesitate to open any new bullish positions anywhere.

Suggested Options:
We're going to suggest the March and June calls. Our favorites would be the June strikes.

BUY CALL MAR 45 NCX-CI OI=556 current ask $3.30
BUY CALL MAR 50 NCX-CJ OI=315 current ask $0.60

BUY CALL JUN 45 NCX-FI OI= 88 current ask $4.70
BUY CALL JUN 50 NCX-FJ OI=187 current ask $2.05


 

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/26/05 (confirmed)
Average Daily Volume = 383 thousand

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RD Donnelley - RHD - close: 59.58 change: +0.21 stop: 58.95

We are still holding our breath. RHD did manage a meager bounce from the $59.00 level on Friday but shares remain under the $60 mark and perilously close to the bottom of its rising channel. To make matters worse we only have a few days left before its February 25th earnings report. We would not suggest new bullish positions at this time unless shares bounced back above the 60.50 or 61.00 levels and then only if you're nimble enough to exit before the earnings report.

Suggested Options:
We would not suggest new positions at this time. See play for details.


 

Picked on February 03 at $ 60.76
Change since picked: - 1.18
Earnings Date 02/25/05 (confirmed)
Average Daily Volume = 186 thousand

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Spectrasite Inc - SSI - close: 61.19 chg: -0.71 stop: 58.00

Our bullish breakout and relative strength play in SSI remains near its all-time highs. The stock did slip a bit on Friday and we suspect that readers will get a chance to buy a bounce from round-number, psychological support at the $60.00 level soon. Wait for the dip and then consider new bullish positions on the bounce.

Suggested Options:
We are going to suggest the April calls.

BUY CALL APR 55 SSI-DK OI=129 current ask $7.60
BUY CALL APR 60 SSI-DL OI= 88 current ask $4.00
BUY CALL APR 65 SSI-DM OI= 37 current ask $1.70


 

Picked on February 16 at $ 61.80
Change since picked: - 0.61
Earnings Date 03/14/05 (confirmed)
Average Daily Volume = 391 thousand

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Texas Industries - TXI - cls: 64.75 chg: +0.21 stop: 61.95

Slowly shares of TXI continue to inch higher. We have been patiently waiting for the breakout over resistance near the $65.00 level. Given that shares are coiling more tightly in this pattern of higher lows we expect a move soon. Readers looking for new positions can watch for a push through the $65.50 mark as a new entry point.


 

Picked on January 09 at $ 60.18
Change since picked: + 4.57
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 238 thousand

PUT UPDATES

Apollo Group - APOL - close: 75.53 chg: -0.27 stop: 80.11

Slowly but surely shares of APOL continue to drift lower with investors selling into each minor rally attempt. The stock is nearing round-number support near the $75 level but we don't expect it to hold. Readers can still consider new bearish positions at current levels or under the $75 mark. Our target remains the $72-70 region. The P&F chart target is still at $68.

Suggested Options:
We like the March and May puts.

BUY PUT MAR 80 OAQ-OP OI= 346 current ask $5.50
BUY PUT MAR 75 OAQ-OO OI=5841 current ask $2.50
BUY PUT MAR 70 OAQ-ON OI=3253 current ask $1.00


 

Picked on January 23 at $ 77.61
Change since picked: - 2.08
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 2.4 million

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Nike Inc - NKE - close: 85.51 chg: +0.31 stop: 87.01

Once again NKE is in jeopardy of breaking out over its descending trendline of resistance currently near the $86 level. It would seem that investors were not phased by the news that Buffett's Berkshire Hathaway had significantly cut their position in NKE. We remain short-term bearish with NKE's two-month downtrend but readers may want to wait for shares to trade under the $84.50 level before considering new bearish positions.

Suggested Options:
We are not suggesting new positions at this time. Wait for a drop under $84.50.


 

Picked on February 08 at $ 84.55
Change since picked: + 0.96
Earnings Date 12/16/04 (confirmed)
Average Daily Volume = 1.1 million

Put Updates

None today.

Dropped Puts

Phelps Dodge - PD - close: 99.67 chg: +0.67 stop: 92.01

Copper prices surged to new 16-year highs on Friday. The strength in the commodity and the world economy's demand for it is a long-term plus for PD. Given the sharp rebound in the share price of PD the stock is no longer in danger of breaking support at the $90 level. We're closing the play unopened. Readers may want to consider long positions if PD can breakout over the $102 level.


 

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: - 0.00
Earnings Date 01/27/05 (confirmed)
Average Daily Volume = 2.2 million

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