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Call Updates

Amerada Hess - AHC - close: 91.15 chg: +1.09 stop: 86.25

A rebound in crude oil prices and positive broker comments and an upgrade for oil giant Exxon Mobil (XOM) helped fuel a rally in the oil sector. The OSX oil services index added 1.35 percent while AHC paced the sector's gains. While crude oil does look very oversold from its recent highs near $60 a barrel (looking at the July contract) it remains a tempting prospect to buy a bounce. We remain cautious on shares of AHC. There has been a lot of talk about market professionals suggesting investors rotate out of energy stocks and into technology stocks. We're not suggesting new plays in AHC at this time and we are modifying our target to be $93.50-94.00 to adjust for AHC's descending channel pattern. 

Picked on May 17 at $ 89.41
Change since picked: + 1.74
Earnings Date 07/27/05 (unconfirmed)
Average Daily Volume = 1.6 million 

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Amer. Intl Group - AIG - close: 53.45 chg: -0.31 stop: 52.49

There is nothing new to report on for AIG although there was another story about employees of AIG being subject to a criminal probe by authorities. We remain on the sidelines waiting for AIG to breakout over resistance at the $55.00 level (and thus surpassing its 50-dma). It's very possible that AIG will not breakout and the MACD indicator could be suggesting that AIG is preparing to turn lower. Our trigger to buy calls is at $55.05. 

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/09/05 (confirmed)
Average Daily Volume = 15.5 million 

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Caterpillar - CAT - close: 94.04 chg: +0.41 stop: 89.00

We see no change from our previous update on 05/22/05. We still suggest watching for a dip as the market looks short-term overbought.

Picked on May 18 at $ 92.35
Change since picked: + 1.69
Earnings Date 04/20/05 (confirmed)
Average Daily Volume = 2.8 million 

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Career Education - CECO - close: 35.14 chg: +0.44 stop: 32.45

Ding! We have been triggered in CECO. The stock actually gapped higher this morning to $35.24, which is above our trigger to go long at $35.05 so we are adjusting our entry. The move follows some positive broker comments after digesting CECO's recent shareholder meeting. While we like the bullish breakout over resistance at $35.00 and its 200-dma we would suggest that traders be patient and look for a probable dip back toward the $34.00-34.50 region and buy a bounce there (or even a dip to the $33.50 level if the market declines too quickly). 

Picked on May 23 at $ 35.24
Change since picked: - 0.10
Earnings Date 05/02/05 (confirmed)
Average Daily Volume = 2.5 million 

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Federated Dept Stores - FD - cls: 69.48 chg: +0.62 stop: 64.45 

Almost there! FD added another 0.9 percent on Monday and is quickly approaching our target in the $69.95-70.00 range. In the weekend update we suggested that more conservative traders consider an earlier exit in the $69.50-70.00 range and FD hit $69.50 this afternoon. While we are holding out for a target closer to the $70 level a quick glance at the RLX retail index suggests that exiting early may be a good idea. The market is short-term overbought and due for a dip. We are not suggesting new bullish plays in FD. 

Picked on May 17 at $ 66.60
Change since picked: + 2.88
Earnings Date 05/11/05 (confirmed)
Average Daily Volume = 2.9 million 

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Eli Lilly - LLY - close: 58.72 change: -0.18 stop: 57.99 

LLY's relative weakness today is discouraging and we're starting to think we may need to exit early here. There was an early rally Monday morning but shares failed near $59.50. The company issued a press release today with positive news regarding a clinical trial of its Cialis drug for ED patients. We are not suggesting new plays at this time and if we don't see signs of strength soon we'll exit, maybe as early as tomorrow. We'd rather rotate out of LLY and into something that is moving.

Picked on May 04 at $ 60.15
Change since picked: - 1.43
Earnings Date 04/18/05 (confirmed)
Average Daily Volume = 4.7 million 

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Reynolds American - RAI - cls: 82.87 chg: +0.20 stop: 77.95

No change from our previous update on 05/22/05. We're still suggesting that readers look for a dip before considering new bullish positions.

Picked on May 16 at $ 81.31
Change since picked: + 1.56
Earnings Date 04/27/05 (confirmed)
Average Daily Volume = 866 thousand 

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United Technologies - UTX - cls: 107.64 chg: +2.49 stop: 102.45

Wow! We expected UTX to be strong but we didn't expect to be triggered so soon. Over the weekend we added UTX with a suggested trigger point to buy calls at $106.25. This would put UTX above resistance at the $106 level. Shares soared on Monday for a 2.3 percent gain to close at a new all-time high. Today's breakout helped produce a new triple-top breakout buy signal on its P&F chart, which now points to a $131 target. Our target is the $114.00-115.00 range. Readers can choose to chase the breakout or a better strategy might be to wait for a dip back toward the $106 level, which should now act as short-term support.

Picked on May 23 at $106.25
Change since picked: + 1.39
Earnings Date 04/20/05 (confirmed)
Average Daily Volume = 2.0 million 

Put Updates

Precision Castparts - PCP - cls: 75.73 chg: +1.08 stop: 75.05

No change from our previous update. We are still waiting for PCP to breakdown under support 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

Dropped Calls

Hovnanian - HOV - close: 58.53 chg: +1.71 stop: 52.49 

The drop in bond yields today helped push mortgage rates lower yet again and traders bought the housing sector. This pushed HOV to an intraday high of $59.32. That's enough to hit our target in the $59.00-60.00 range. The $60 level looks like round-number resistance where shares failed back in early March. Traders who haven't exited yet can probably expect some profit taking in HOV, especially if the major averages take a dip.

Picked on May 06 at $ 54.26
Change since picked: + 4.27
Earnings Date 05/31/05 (confirmed)
Average Daily Volume = 1.2 million 

Dropped Puts

MGIC Invest. - MTG - close: 61.07 change: +1.02 stop: 61.11

As we feared over the weekend the market's strength finally helped push MTG through resistance near its 50-dma, the $61 level and the top of its descending channel. We've been stopped out at $61.11. 

Picked on May 15 at $ 58.91
Change since picked: + 2.16
Earnings Date 04/14/05 (confirmed)
Average Daily Volume = 742 thousand 

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Parker Hannifin - PH - close: 61.60 change: +0.93 stop: 62.01

Hmm... we cannot find any news or catalyst to explain it but shares of PH surged higher after the open this morning to push through technical resistance at its 50-dma and price resistance near $62.00. The move also temporarily pushed PH above its six-month trendline of resistance. We have been stopped out at $62.01. The fact that PH failed to close over the $62.00 level may suggest this is just another test of resistance or that the stock is building a slightly ascending channel or trading range. 

Picked on April 28 at $ 59.08
Change since picked: + 2.52
Earnings Date 04/18/05 (confirmed)
Average Daily Volume = 1.2 million 

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