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Call Updates

Avalonbay - AVB - close: 70.52 change: -0.41 stop: 67.49

AVB pulled back with the major indices today. Given what looks like a rollover under resistance for the major averages traders should think twice about all of their bullish positions. Right now we would expect shares of AVB to pull back toward the $70-69 levels before finding support. Look for the dip and then signs of a bounce before considering new positions here.

Picked on April 24 at $ 70.05
Change since picked: + 0.47
Earnings Date 04/21/05 (confirmed)
Average Daily Volume = 345 thousand

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Golden West Fincl - GDW - close: 62.35 chg: +0.03 stop: 59.95

A late morning rally pushed GDW above resistance at the $62.50 level and hit our trigger/entry point at $62.55. The play is now open. Unfortunately it appears that the bounce is failing in the major averages. Readers can be patient. There is no rush to initiate new bullish positions in GDW. If the major averages pull back we would expect GDW to slip towards the $61 region. Traders can use a bounce from $61 as a new bullish entry point but be sure to look for signs of a bounce first.

Picked on April 26 at $ 62.55
Change since picked: - 0.20
Earnings Date 04/20/05 (confirmed)
Average Daily Volume = 1.3 million

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Nucor - NUE - close: 51.60 chg: -1.75 stop: 49.95

Uh-oh. The forecast is looking a bit gloomy here for shares of NUE. The stock has rolled over under the $55.00 level and its 100-dma and 21-dma. There is still a chance that NUE will bounce from the $50.00 level, bolstered by its 200-dma's, or even dip toward the April low near $48.34. More aggressive traders might want to consider buying a bounce. We are still sitting on the sideline waiting for NUE to trade at or above our trigger at $55.05.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/21/05 (confirmed)
Average Daily Volume = 3.3 million

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Patterson Cos. - PDCO - close: 50.45 chg: -0.70 stop: 49.75

Once again the bounce from support is in jeopardy. The market weakness today pulled PDCO back toward the $50.00 level and its technical support at the 50-dma. Over the weekend we reiterated our suggestion to wait for a move back over $51.50 before considering new bullish positions. We repeat it again today. In all honesty more conservative traders may want to just exit this play now to avoid further losses. The major averages look weak and PDCO is likely to become a target for profit taking especially if it cracks that 50-dma near $50.00. The MACD on PDCO's weekly chart has already or is about to produce a new sell signal. The momentum here is definitely stalling. Nimble traders could ready an alternative to buy puts on just such a breakdown.

Picked on April 18 at $ 50.75
Change since picked: - 0.30
Earnings Date 05/19/05 (unconfirmed)
Average Daily Volume = 789 million
 

Put Updates

CDW Corp - CDWC - close: 55.83 chg: -0.94 stop: 58.01

That's more like it. The weakness in the NASDAQ Composite and tech-related sectors helped pull CDWC lower. Of course another weak reading on consumer sentiment doesn't help CDWC either. This looks like a new bearish entry point but we're still suggesting that readers wait for a drop under $55.50.

Picked on April 24 at $ 55.68
Change since picked: + 0.15
Earnings Date 04/19/05 (confirmed)
Average Daily Volume = 920 thousand

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Lehman Brothers - LEH - close: 92.11 chg: -0.89 stop: 92.51

Heads up! The action in today's market could be the sort of failed rally-bearish entry point we're looking for. The XBD broker-dealer index failed to penetrate the 140 level, which looks like overhead resistance bolstered by its exponential 200-dma. Meanwhile shares of LEH failed to penetrate the $94 level and failed to close over its 40 and 50-dma's. Aggressive traders could use this as a bearish entry point in LEH. We are still suggesting that readers wait for LEH to trade at or below our entry point of $89.45 before buying puts.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: - 0.00
Earnings Date 03/15/05 (confirmed)
Average Daily Volume = 2.3 million
 

Dropped Calls

Eaton Corp - ETN - close: 59.33 chg: -0.97 stop: 58.25

It's time to abandon ship. We initially added ETN with the expectation that the stock would produce an oversold bounce into the $62-63 range. The bounce stalled near $61. Today's drop back under the $60.00 level and its 10-dma looks like our signal to exit. We would not be surprised to see ETN retest the $57 level (the April low).

Picked on April 18 at $ 58.51
Change since picked: + 0.82
Earnings Date 04/14/05 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Puts

KB Home - KBH - close: 113.36 change: +0.40 stop: 115.01

The new home sales figures came out this morning and the results were a surprise. Analysts were expecting a mild pull back but instead new home sales reached a new high. On Sunday we said that this report could create some volatility and we were right. The bad news is that the volatility sent KBH right through our stop loss. KBH spiked to $116.40 before quickly falling away. We're not convinced that KBH won't turn out to be a decent bearish candidate but we have to close the play anyway at $115.01. Keep an eye on the stock for a new relative low under $109.00.

Picked on April 20 at $108.98
Change since picked: + 4.38
Earnings Date 06/16/05 (unconfirmed)
Average Daily Volume = 1.5 million

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MGM Mirage - MGG - close: 70.60 change: +1.20 stop: 71.51

We have been stopped out. Wells Fargo reiterated their "buy" rating on MGG today and raised their price target from $62 to $86. This upgrade combined with a positive market this morning helped propel shares of MGG to a high of $72.15. Our stop loss was 71.51. Of course Murphy's law is alive and well and the stock began to fade into the afternoon as the major averages slipped lower. Today's action could be a failed rally bearish entry point for aggressive traders but we would not suggest it. On side note MGG's stock symbol will change to MGM next week.

Picked on April 20 at $ 67.10
Change since picked: + 3.50
Earnings Date 04/19/05 (confirmed)
Average Daily Volume = 1.1 million
 

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