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Call Updates

Red Robin Burger - RRGBE - cls: 52.00 chg: +0.25 stop: 49.49

RRGBE continues to show very impressive relative strength. The fact that RRGBE closed higher during Friday's market massacre is very impressive. However, we are still suggesting that more conservative traders exit for a profit. We are not suggesting new bullish entry points at this time. Odds are good that if the markets keep falling RRGBE will pull back toward the $50.00 level again.

Suggested Options:
We are not suggesting new bullish plays at this time.

Picked on March 10 at $ 48.00
Change since picked: + 4.00
Earnings Date 02/14/05 (confirmed)
Average Daily Volume = 199 thousand
 

Put Updates

Expeditors Intl Was. - EXPD - cls: 48.17 chg: -1.14 stop: 52.51

EXPD is a new put play from the Thursday night newsletter. Shares tried to bounce on Friday but quickly failed at the $50.00 level. The stock is oversold and due for a bounce and traders should still be prepared for an oversold rebound. Yet we believe the trend has changed especially with the big breakdown in the Dow Transportation index. A reprint of the Thursday night play description follows:

Disappointing retail sales have fanned the flames of investors' fears of an economic slow down. The transportation sector is getting hit hard since it is a big target for profit taking after its 2004 rally. The Dow Transports just broke down under its simple and exponential 200-dma on big volume. Meanwhile, EXPD, which had already broken below its 200-dma's a few days ago, is closing under the $50.00 level for the first time in months. The technical picture looks pretty sour and the P&F chart also shows a triple-bottom breakdown sell signal with a $42.00 target. However, it is worth noting that the P&F chart does show EXPD near support. Normally, this would persuade us from not playing the stock but considering the market weakness we are going to add EXPD anyway. Shares are somewhat oversold so be prepared for a possible bounce toward the $52.00 level before EXPD trades lower. We are starting the play with a stop loss at $52.51. Our target is the $46-45 region and we plan to exit before EXPD's earnings report which is only three weeks away.

Suggested Options:
We are suggesting the May puts because we plan to exit before the May earnings report.

BUY PUT MAY 50.00 URP-QJ OI=747 current ask $5.30
BUY PUT MAY 45.00 URP-QI OI=113 current ask $4.80*pricing error?

Picked on April 14 at $ 49.31
Change since picked: - 1.14
Earnings Date 05/04/05 (unconfirmed)
Average Daily Volume = 748 thousand

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Ishares Russ 2000 Val - IWN - cls: 175.13 chg: -2.91 stop: 183.51

IWN is a new put play from the Thursday night newsletter. The market sell-off on Friday really helped confirm IWN's technical breakdown below the 200-dma. The drop also pushed its P&F bearish target from 162 to 158. Volume was very heavy on the decline. IWN is short-term oversold and could bounce back toward the 180 level before continuing lower but we can't predict when or if any oversold bounce will occur. More patient traders might want to wait for a bounce and then buy puts on a failed rally attempt. A reprint of the original play description follows:

Now that the major indices are breaking down left and right we wanted a way to play the "market". Unfortunately, the DIA Dow Diamonds and the NASDAQ 100 QQQQs don't seem to move fast enough for short-term directional option plays. That's why we're suggesting readers consider puts on the IWN or the Russell 2000 Value index Ishares. We like the IWM as well but the IWN appears to offer more movement, which is what we want in an option play. Looking at the chart of the IWN we see a technical breakdown below support at the 180 level and its simple and exponential 200-dma's in the 179 region. Volume was heavy on the sell-off today. Technical oscillators are naturally negative. The IWN's P&F chart shows a sell signal with a 162-price target. We are going to target a move to the 170 level over the next six to eight weeks.

Suggested Options:
We are suggesting the May puts. The next month available would be August puts.

BUY PUT MAY 185.00 IWN-QQ OI= 118 current ask $10.80
BUY PUT MAY 180.00 IWN-QP OI=1366 current ask $ 6.90
BUY PUT MAY 175.00 IWN-QO OI= 281 current ask $ 4.00

Picked on April 14 at $178.04
Change since picked: - 2.91
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 324 thousand

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Starbucks - SBUX - close: 47.34 chg: +0.47 stop: 51.75

Uh-oh! Bears should be on the alert. SBUX's sudden show of strength on Friday when the rest of the market was falling is not a good sign. Granted shares didn't add much but the relative strength is a concern if you're holding puts. Of course the reason SBUX was positive was an upgrade from Bear Stearns to an "out perform" rating. This short-term pop could easily wear off. We initially added SBUX on its technical breakdown below the $50.00 level, the February lows and its 200-dma's. The P&F chart confirmed the breakdown with a sell signal pointing to a $38 target. Now the decline seems to have lost its momentum and SBUX is trading sideways in a range between 46.50 and 48.50. If the market bounces next week, and we do expect an oversold bounce eventually, look for SBUX to rally back toward the $50.00 level, which should be overhead resistance. More patient traders can wait for SBUX to trade toward $50.00 and then buy puts on a failed rally there. Our target remains the $45.00-44.00 range.

Suggested Options:
We are suggesting the May puts

BUY PUT MAY 50.00 SQX-QJ OI=4788 current ask $3.50
BUY PUT MAY 47.50 SQX-QT OI=3404 current ask $1.90
BUY PUT MAY 45.00 SQZ-QI OI=1475 current ask $0.98

Picked on April 10 at $ 48.62
Change since picked: - 1.28
Earnings Date 04/27/05 (confirmed)
Average Daily Volume = 4.3 million
 

Dropped Calls

Research In Motion - RIMM - cls: 69.70 chg: -1.63 stop: 72.49

It was an ugly, ugly day for tech stocks and RIMM was no exception. Shares lost another 2.2 percent to breakdown below the round-number, psychological $70.00 mark and its exponential 200-dma. This looks more like a bearish entry point than anything else. Since RIMM never traded at or above our entry point to go long at $78.25 we are closing the play unopened.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/05/05 (confirmed)
Average Daily Volume = 10.1 million

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Whole Foods - WFMI - close: 98.04 chg: -1.11 stop: 98.99

Bulls didn't have much of a chance on Friday with the market's third day into a sell-off. Yet shares of WFMI tried to bounce Friday before failing at the $100 level. Unfortunately it was too little too late and we have been stopped out at $98.99. We will be keeping an eye on WFMI for a possible rebound if shares hit $95.00 or their 200-dma.

Picked on April 06 at $104.16
Change since picked: - 5.72
Earnings Date 05/03/05 (unconfirmed)
Average Daily Volume = 956 thousand
 

Dropped Puts

Wynn Resorts - WYNN - cls: 59.82 chg: -2.34 stop: 68.05

Target achieved. The sell-off in WYNN on Friday with its 3.7 percent decline on very big volume was due to two factors. First and foremost was the broader market sell-off. Second was rumors that the company would be forced to delay the opening of its new casino set to launch on April 28th. The drop in WYNN was more than enough to hit our exit/profit target at $60.50 and we are closing the play. Bears still holding positions should be careful. WYNN is oversold and managed to bounce from its exponential 200-dma near $58.00 on Friday.

Picked on April 03 at $ 66.04
Change since picked: - 6.22
Earnings Date 04/29/05 (unconfirmed)
Average Daily Volume = 1.1 million
 

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