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Call Updates

AmerisourceBergen - ABC - close: 67.05 change: +0.10 stop: 63.85

We have to admit that we were surprised by the relative strength in ABC on Friday. The stock held support in the $66.80-67.00 range and actually closed higher on the session. Considering the sell-off in the major indices on Thursday and Friday professional traders have mixed opinions about what happens on Monday. Do we get an oversold bounce or do the markets produce more follow through to the downside. We would continue to watch ABC for a dip toward the $66.00 level and only consider new bullish positions on a significant bounce. More conservative traders may want to exit here to avoid any losses now that the DJIA has broken support at the 10,400 level. Our target is the $69.50-70.00 range. 

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

Picked on June 13 at $ 65.57
Change since picked: + 1.48
Earnings Date 07/21/05 (unconfirmed)
Average Daily Volume = 1.3 million 

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Ashland Inc - ASH - close: 70.45 chg: -0.68 stop: 66.99

ASH has been rather resilient to the market sell-off this past week. The stock remains above round-number, psychological resistance at the $70.00 level and is trading near all-time highs. Readers can use the pull back on Friday toward the $70 level as a new bullish entry point. Or if you think the markets my dip further on Monday then watch ASH for a dip toward the $69.50-69.25 range and use that as an entry point. Keep in mind that we would prefer to see a bounce first before committing any capital if you're using a dip under $70.00. Our target is the $74.75-75.25 range but we do not plan on holding over ASH's July earnings report.

Suggested Options:
We are suggesting the July calls but we may end up holding the play past the July expiration so traders may want to consider the October strikes.

BUY CALL JUL 65.00 ASH-GM OI=2761 current ask $6.00
BUY CALL JUL 70.00 ASH-GN OI=3284 current ask $1.90
BUY CALL JUL 75.00 ASH-GO OI=2056 current ask $0.40

Picked on June 16 at $ 70.05
Change since picked: + 0.40
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume = 1.1 million 

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Chubb Corp - CB - close: 84.70 change: +1.05 stop: 82.49

CB displayed some impressive strength on Friday. The stock rebounded from its early low near $83.25 and hit a high of $85.37 before fading lower in the afternoon. We remain bullish on the stock and the bullish bias on the P&F chart has not changed. The P&F chart still points to a $109.00 target. We're still targeting a move into the $89.50-90.00 range. However, readers looking for a new entry point might want to wait a day or two. If the markets continue to decline next week then CB could pull back again and retest its simple 50-dma as technical support near $82.50. Or an alternative entry point would be to consider new longs on a move past Friday's highs near $85.40. We will not hold over CB's July earnings report.

Suggested Options:
We are suggesting the July calls but that only gives us about five weeks. More conservative traders may want to consider the October calls.

BUY CALL JUL 80.00 CB-GP OI=1209 current ask $5.50
BUY CALL JUL 85.00 CB-GQ OI=1157 current ask $1.60
BUY CALL JUL 90.00 CB-GR OI= 347 current ask $0.20

Picked on June 10 at $ 85.05 
Change since picked: - 0.35
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume = 1.2 million 

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Rockwell Collins - COL - close: 47.28 chg: -0.32 stop: 44.95

Believe it or not we're still not triggered in this play. COL dipped to an intraday low of $46.80, which isn't enough to hit our suggested entry point in the $46.75-46.50 range. However, readers may want to consider new bullish plays here anyway. The decline on Friday was enough for COL to test its 100-dma again and as we expected there were bulls waiting to buy the dip. Our choice now is to either go long here on the late afternoon bounce or considering the weakness in the broader market and the odds of some follow through to the downside next week we can keep our suggested entry point at $46.75. At the moment we're going to leave our suggested entry range unchanged. Readers should remember that if we are triggered we do not plan on hold over COL's July earnings report.

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

BUY CALL AUG 45.00 COL-HI OI= 0 current ask $3.20
BUY CALL AUG 50.00 COL-HJ OI= 58 current ask $0.55

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/26/05 (unconfirmed)
Average Daily Volume = 800 thousand 

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Cummins Inc - CMI - close: 72.30 change: -0.68 stop: 70.95

So far there are no surprises here. We've been suggesting that readers watch for a dip toward the $72-71 region and shares of CMI hit a low of $72.06 on Friday. We're not excited about the decline back below its simple 200-dma but the six-week bullish up trend is still intact for now. The P&F chart remains bullish as well and points to a $98 target. Considering the current market environment we would probably wait for CMI to bounce back above the $73.00 level or the 200-dma (73.30) or the $74.00 level before initiating new bullish positions. Which level you choose to consider new positions depends on your risk profile. Our target is the $77.50-80.00 range but we do not plan to hold over CMI's July earnings report.

Suggested Options:
We are not suggesting new option plays at this time. If CMI does rebound we would choose from the September strikes.

Picked on June 19 at $ 74.03
Change since picked: - 1.73
Earnings Date 07/21/05 (unconfirmed)
Average Daily Volume = 970 thousand 

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Fording Candn Coal - FDG - cls: 93.83 chg: +0.00 stop: 87.49 

Investors are focused on oil right now but alternative energy stocks have not been left behind. Coal producer FDG broke through multiple levels of resistance in the last week and the stock did not show any weakness during the market sell-off. Currently the Point & Figure chart points to an $118.00 target. We are targeting a move into the $97-100 range. Readers looking for a new entry point might want to watch for a dip back toward the $92 level. 

Suggested Options:
July strikes are available but they'll probably expire before the play does. August strikes are available but there is no open interest yet. Therefore we're suggesting the September strikes.

BUY CALL SEP 85.00 FDG-IQ OI= 331 current ask $11.20
BUY CALL SEP 90.00 FDG-IR OI= 557 current ask $ 7.80
BUY CALL SEP 95.00 FDG-IS OI=2311 current ask $ 5.40
BUY CALL SEP100.00 FDG-IT OI= 409 current ask $ 3.10

Picked on June 19 at $ 90.30
Change since picked: + 3.63
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume = 384 thousand 

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Netease.com - NTES - close: 58.45 chg: -0.98 stop: 55.95 

After hitting new 18-month highs on Wednesday and Thursday morning shares of NTES have pulled back toward short-term support at the simple 10-dma. Readers may want to consider new bullish positions on a bounce from here as the two-day pull back did not see much volume. Our target remains the $62.00-63.00 range. More conservative traders may want to raise their stop loss toward the $57.00 level. We're leaving our stop at $55.95 for now. Remember, we do not plan on holding over NTES' July earnings report.

Suggested Options:
We hesitate to suggest new call plays with the broader indices sinking but if NTES bounces from here we'd consider the August calls.

Picked on June 13 at $ 57.29
Change since picked: + 1.16
Earnings Date 07/26/05 (unconfirmed)
Average Daily Volume = 752 thousand 

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SLM Corp - SLM - close: 50.88 change: +0.22 stop: 48.95

SLM is showing relative strength with a fresh gain on Friday. Bulls were there to buy the dip at $50.40 on Friday morning. We remain positive on the stock and would consider new positions here. However, if you think the market will continue to decline next week you might want to wait and see if SLM does indeed hit the $50.00 level and use that as a bullish entry point. The P&F chart currently points to an $89 target. We are targeting a move into the $54.50-55.00 range. We do not plan on holding over SLM's July earnings report.

Suggested Options:
We are going to suggest the new August strikes even though they have very little open interest yet. 

BUY CALL AUG 45.00 SLM-HI OI= 50 current ask $6.40
BUY CALL AUG 50.00 SLM-HJ OI=204 current ask $2.30
BUY CALL AUG 55.00 SLM-HK OI=119 current ask $0.40

Picked on June 20 at $ 50.92
Change since picked: - 0.04
Earnings Date 07/14/05 (unconfirmed)
Average Daily Volume = 1.8 million 

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Wellpoint Inc - WLP - close: 68.19 chg: -0.55 stop: 65.90 

As we expected WLP dipped back toward the $68.00 level, which is very short-term support. Overall the health insurance stocks weathered the market sell-off pretty well. Readers can probably use this dip as a new bullish entry point. However, if the market continues to decline you might want to wait and see if WLP dips back toward the $66.00 level or its 50-dma before turning higher again. Currently the P&F chart remains bullish with an $87 target. We do not plan on holding over the July earnings report.

Suggested Options:
July options don't have a lot of time left. We're suggesting the August strikes.

BUY CALL AUG 65.00 WLP-HM OI= 2 current ask $7.30
BUY CALL AUG 70.00 WLP-HN OI=320 current ask $4.80

Picked on June 05 at $ 68.40
Change since picked: - 0.21 
Earnings Date 07/27/05 (unconfirmed)
Average Daily Volume = 3.5 million 

Put Updates

Quality Systems - QSII - cls: 44.89 chg: -1.08 stop: 48.01 *new*

The market sell-off on Friday helped pull QSII under round-number, psychological support at the $45.00 level. This is good news for shorts and we noticed that volume came in above average. Traders looking for new bearish positions might want to use Friday's drop as a new entry point. We are going to lower our stop loss to $48.01, above the simple 10-dma and the simple 100-dma. Our target is the $41-40 range near the exponential 200-dma.

Suggested Options:
We are going to suggest the July or August puts but keep in mind there is about three weeks to expiration for the Julys. 

BUY PUT JUL 50.00 QCR-SJ OI=217 current ask $5.80
BUY PUT JUL 45.00 QCR-SI OI=169 current ask $2.10

BUY PUT AUG 45.00 QCR-TI OI= 8 current ask $3.80
BUY PUT AUG 40.00 QCR-TH OI= 10 current ask $1.85

Picked on June 15 at $ 47.75
Change since picked: - 2.88
Earnings Date 06/13/05 (confirmed)
Average Daily Volume = 330 thousand 

Dropped Calls

Eagle Materials - EXP - close: 89.57 chg: -1.34 stop: 89.49 

The market sell-off was too much for EXP and the stock broke down under the $90.00 level. We were stopped out at $89.49 late Friday afternoon. Currently the daily technical oscillators look pretty negative but we would keep an eye on EXP for a bounce from the $88-87 range. 

Picked on June 09 at $ 90.45
Change since picked: - 0.88
Earnings Date 08/03/05 (unconfirmed)
Average Daily Volume = 134 thousand 

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Intl Bus. Mach. - IBM - cls: 74.01 chg: -1.40 stop: 74.99

IBM did not respond well to the market sell-off on Thursday-Friday. The stock broke down below the $75.00 level and looks poised to breakdown under its mid-June support at the $74.00 level. We're going to close the play unopened since IBM never traded at or above our entry point at $78.25. 

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/14/05 (unconfirmed)
Average Daily Volume = 7.4 million 

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St Joe Co - JOE - close: 79.30 change: -1.13 stop: 79.45

JOE was unable to escape the profit taking on Friday. The stock lost 1.4 percent on volume well above the average. We've been stopped out at $79.45. The breakdown under the $80.00 level might herald the beginning of a deeper consolidation. We suspect that JOE is still a bullish candidate but we'll watch for a dip toward the $75-76 level first. 

Picked on June 20 at $ 82.56
Change since picked: - 3.26
Earnings Date 07/20/05 (unconfirmed)
Average Daily Volume = 507 thousand

Dropped Puts

None

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