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Call Updates

Amerada Hess - AHC - close: 89.08 chg: -0.33 stop: 86.25

Readers may want to take a step back and give AHC a wait and see approach before moving in. The stock traded higher this morning and hit the $91.00 level before succumbing to weakness in crude oil prices. Crude oil traded lower after the Wednesday inventory numbers came in above expectations. More importantly crude oil prices have now broken down below their 200-dma. This could put a serious crimp on any rebound in shares of AHC. If AHC trades under the $88.00 level we would seriously consider exiting this play early.

Picked on May 17 at $ 89.41
Change since picked: - 0.33
Earnings Date 07/27/05 (unconfirmed)
Average Daily Volume = 1.6 million 

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Caterpillar - CAT - close: 93.52 chg: +1.56 stop: 89.00

Another triple-digit gain for the Dow Industrials helped lead a broad-market rally higher and CAT followed. Shares of CAT broke through its 100-dma and traded at our entry point of $92.35 to open the play. This confirms the breakout from its inverse H&S pattern that points to a $100 target. Our target is the $99.25-100.00 range. Don't be surprise to see a little profit taking after the three-day rally. Readers could use a dip back toward $92.00 as a new entry point if they missed today's breakout.

Picked on May 18 at $ 92.35
Change since picked: + 1.17
Earnings Date 04/20/05 (confirmed)
Average Daily Volume = 2.8 million 

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Federated Dept Stores - FD - cls: 67.94 chg: +1.34 stop: 62.49

FD has closed at another new high boosted by the market's rally. Readers may want to wait for a potential dip back toward the $65 or $66 levels before initiating new bullish positions. Our short-term target is the $70.00 level. 

Picked on May 17 at $ 66.60
Change since picked: + 1.34
Earnings Date 05/11/05 (confirmed)
Average Daily Volume = 2.9 million 

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Hovnanian - HOV - close: 56.45 chg: +2.27 stop: 52.49 *new*

Housing stocks soared on Wednesday out performing all other sectors save the airlines. The DJUSHB home construction index added 4.5 percent. Shares of HOV followed with a 4.18 percent gain to breakout over the $54.50-55.00 level. Our target is the $59-60 range. We are raising our stop loss to $52.49. 

Picked on May 06 at $ 54.26
Change since picked: + 2.19
Earnings Date 05/31/05 (confirmed)
Average Daily Volume = 1.2 million 

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Invitrogen - IVGN - close: 78.60 change: +0.61 stop: 74.85 *new*

Thus far there has been no post-ASCO conference sell-off in the biotech sector and that bodes well for the group and IVGN. The stock traded to $79.30 during today's market rally. Our short-term target is the $80.00 level and more conservative traders may want to exit early. We are raising our stop loss to $74.85.

Picked on May 03 at $ 75.51
Change since picked: + 3.09
Earnings Date 04/28/05 (confirmed)
Average Daily Volume = 888 thousand 

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Eli Lilly - LLY - close: 60.36 change: +0.80 stop: 57.99 *new*

This morning before the open an analyst firm upgraded LLY to a "buy" with a $65 target. This pushed LLY to gap up at the open. The stock added 1.3 percent on above average volume. The move over $60.00 looks like a new bullish entry point to us. Yet some traders may want to wait and see LLY fill the gap from this morning near $59.60. Our target is the $65 level. We are raising our stop loss to $57.99.

Picked on May 04 at $ 60.15
Change since picked: + 0.21
Earnings Date 04/18/05 (confirmed)
Average Daily Volume = 4.7 million 

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Reynolds American - RAI - cls: 82.61 chg: +1.07 stop: 77.95

RAI outpaced the rally in the S&P 500 index on Wednesday. The move helped confirm the recent breakout over resistance near $81.25 and volume was above average. Our target is the $85-86 range. 

Picked on May 16 at $ 81.31
Change since picked: + 1.30
Earnings Date 04/27/05 (confirmed)
Average Daily Volume = 866 thousand

Put Updates

L-3 Comm. - LLL - close: 68.59 chg: +0.99 stop: 69.55 

Now that the stock market is breaking out to the upside this is not a safe environment for bearish plays. Readers may want to seriously consider exiting their bearish positions to minimize losses. With that in mind we're encouraged that LLL's rally today stalled under the $69.00 level, which we expected to act as resistance. The stock traded in a narrow 35-cent range for the latter half of the session. We are not suggesting new bearish positions at this time.

Picked on May 10 at $ 68.01
Change since picked: + 0.58
Earnings Date 04/26/05 (confirmed)
Average Daily Volume = 855 thousand 

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MGIC Invest. - MTG - close: 60.07 change: +0.52 stop: 61.11

It's time to go to red-alert for MTG. The market's bullish breakout has made this a dangerous environment for bearish positions. More conservative traders may want to exit MTG early to avoid further losses. We're keeping the play open for now. Today's rally stalled under the simple 50-dma and the top of its descending channel. Yet the close over the $60 level makes this a precarious position for the bears. We are not suggesting new positions at this time.

Picked on May 15 at $ 58.91
Change since picked: + 1.16
Earnings Date 04/14/05 (confirmed)
Average Daily Volume = 742 thousand 

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Precision Castparts - PCP - cls: 75.16 chg: +1.31 stop: 75.05

No change from our previous update on 05/15/05. We are waiting for PCP to breakdown below support near $72.00 and hit our entry point at $71.95. 

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: - 0.00
Earnings Date 05/03/05 (confirmed)
Average Daily Volume = 492 thousand 

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Parker Hannifin - PH - close: 60.48 change: +1.04 stop: 62.01

The market's rally has fueled an oversold bounce in shares of PH. The stock managed to close over its 40-dma and the $60.00 level. Fortunately, the rally failed under resistance near $62.00. Considering the current bullish market environment we are not suggesting new bearish positions and conservative traders may want to exit here to avoid further losses.

Picked on April 28 at $ 59.08
Change since picked: + 1.40
Earnings Date 04/18/05 (confirmed)
Average Daily Volume = 1.2 million 

Dropped Calls

Research In Motion - RIMM - cls: 75.49 chg: +3.04 stop: 66.85

Target achieved. RIMM surged today out performing all the major indices and adding 4.19 percent. The stock also broke out over its simple 200-dma on volume about 40 percent above the average. Our target was the $76.00-77.00 range and RIMM hit $76.25 late this afternoon. It would be tempting to keep the play open considering the breakout in the NASDAQ and RIMM's move over the 200-dma but each individual trader will have to make that decision on their own. 

Picked on May 10 at $ 70.51
Change since picked: + 4.98
Earnings Date 04/05/05 (confirmed)
Average Daily Volume = 10.6 million 

Dropped Puts

Marriot - MAR - close: 64.45 chg: +1.93 stop: 63.37 

We have been cautious on MAR for the last few days and today's market rally was the last straw. MAR rebounded with a three-percent gain on above average volume today. The big move was also fueled by news that room rates rose again and summer rates for the industry are expected to hit record highs. We have been stopped out at $63.37.

Picked on April 28 at $ 63.37
Change since picked: + 1.08
Earnings Date 04/21/05 (confirmed)
Average Daily Volume = 1.2 million 

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