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Call Updates

Chubb Corp - CB - close: 85.95 change: +0.11 stop: 83.49

Insurance stocks are holding up pretty well despite the start of hurricane season. Shares of CB continue to slowly drift higher. We remain bullish on the stock but worry about the lack of momentum. We're running out of time and do not want to hold over CB's July 26th earnings report. At this time we're not suggesting new bullish plays. We continue to target the $89.50-90.00 range. The P&F chart remains bullish and points to a $109 target.

Suggested Options:
We are not suggesting new bullish positions in CB at this time.

Picked on June 10 at $ 85.05
Change since picked: + 0.90
Earnings Date 07/26/05 (confirmed)
Average Daily Volume = 1.2 million

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Cummins Inc - CMI - close: 75.02 change: +0.52 stop: 72.99

CMI is presenting a mixed message if you're trying to read the technical indicators. Short-term oscillators like the RSI and stochastics are starting to edge higher again. The MACD recently produced a sell signal from overbought levels. We're willing to stay long calls on the stock given the recent bounce from technical support at its simple 200-dma. This might be considered a new bullish entry point but keep in mind two things. First, there is short-term resistance at the $76.00 level. Second, we're only targeting a move into the $77.50-80.00 range. If you think CMI can hit the upper end of that range before it reports earnings on July 22nd then maybe this is your entry point. We are going to leave our stop loss at $72.99, under the Thursday low and its 200-dma.

Suggested Options:
There are just twelve days left before CMI reports earnings. We are not suggesting new plays here.

Picked on June 19 at $ 74.03
Change since picked: + 0.99
Earnings Date 07/22/05 (confirmed)
Average Daily Volume = 970 thousand

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Coventry Hlth Care - CVH - cls: 73.94 chg: -0.92 stop: 69.49

So far so good. We are a little disappointed over CVH's relative weakness on Friday but overall the picture still looks positive. CVH broke through resistance in the 72.00-72.50 level to hit new all-time highs. On the P&F chart we see a buy signal that points to an $89 target. We would use Friday's dip as another entry point to buy calls. Keep in mind that we plan to exit before the company's early August earnings report. Our target is the $77.50-80.00 range.

Suggested Options:
We are suggesting the August calls.

BUY CALL AUG 70.00 CVH-HN OI=140 current ask $5.60
BUY CALL AUG 75.00 CVH-HO OI=794 current ask $2.40

Picked on July 05 at $ 72.75
Change since picked: + 1.17
Earnings Date 08/02/05 (unconfirmed)
Average Daily Volume = 1.0 million

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Fording Candn Coal - FDG - cls: 95.96 chg: +1.16 stop: 89.49

FDG almost made it. The stock came within three cents of hitting the bottom edge of our $97.00-100.00 target range. Actually multiple coal stocks were showing strength on Friday. This is a new relative (two-month) high for FDG. We remain bullish and if the market continues higher next week then FDG could hit our target sooner rather than later. More aggressive traders may want to think about letting the stock run as the P&F chart points to a $118.00 target. This close to our target we're not suggesting new bullish positions but nimble traders might want to watch for a dip back toward $95.00 as another entry point. We continue to suggest that conservative traders consider taking some money off the table here.

Suggested Options:
FDG almost hit our target on Friday. This close to our goal we're not suggesting new plays.

Picked on June 19 at $ 90.30
Change since picked: + 5.66
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume = 384 thousand

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Fortune Brands - FO - close: 93.23 chg: +1.63 stop: 88.99*new*

FO out performed the S&P 500 on Friday with a 1.77 percent gain pushing the stock to yet another new all-time high. We suggested that the rebound on Thursday looked like a new bullish entry point and Friday's follow through is a nice confirmation. Our target is the $95-96 range. Readers looking for a new entry might hope for a pull back toward the $92 level. We are going to raise our stop loss to $88.99. Remember, we plan to exit before its late July earnings report.

Suggested Options:
FO is less than two points from our target range. We're not suggesting new positions here.

Picked on July 03 at $ 90.51
Change since picked: + 2.72
Earnings Date 07/22/05 (unconfirmed)
Average Daily Volume = 648 thousand

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Intuit - INTU - close: 48.06 chg: +1.55 stop: 43.90

Whoa! The NASDAQ soared on Friday with a 1.79 percent gain. Software stocks also turned in a strong session with the GSO software index adding 1.4 percent. Yet INTU out did them both with a 3.3 percent rally on Friday. We also noticed that volume continues to rise with Friday's gain fueled by volume more than double the average. We don't see any big changes from our Thursday play description so we're going to reprint it below. However, the stock is looking a little short-term overbought. We'd probably wait for a dip before chasing it here if you missed the entry on Friday morning. We're only targeting a move toward the $49.50-50.00 range.

Thursday's update: After a month of churning sideways it looks like INTU is ready for the next leg higher. Shares have been climbing since the late April lows but it's been somewhat of a slow, patience testing ride higher. Today's move and yesterday's rebound were both fed by above average volume suggesting the next significant move higher could have begun. We also like the Point & Figure chart which shows INTU in a bullish triangle breakout pattern that points to a $70.00 target. Looking at the weekly chart you can also see what looks like an inverse or bullish head-and-shoulders pattern with a slanting neckline. We are willing to buy calls at current levels and target a move toward the $50.00 region before the company's next earnings report.

Suggested Options:
We are suggesting the August calls. It is worth noting that the option prices have risen significantly with Friday's gain. We're suggesting that readers wait for a dip before considering new positions.

BUY CALL AUG 42.50 IQU-HV OI= 151 current ask $6.00
BUY CALL AUG 45.00 IQU-HI OI= 539 current ask $3.80
BUY CALL AUG 47.50 IQU-HW OI=1264 current ask $2.00

Picked on July 07 at $ 46.51
Change since picked: + 1.55
Earnings Date 08/17/05 (unconfirmed)
Average Daily Volume = 1.7 million

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Noble Energy - NBL - close: 79.40 chg: -0.37 stop: 73.99

Many energy stocks, like NBL, paused on Friday as crude oil tumbled back under the $60.00 a barrel mark. Fortunately though the profit taking in NBL was pretty minor and we see on the intraday chart that the stock was already beginning to bounce on Friday afternoon. We would use Friday's dip as a new bullish entry point. The MACD is in a new buy signal. The P&F chart is bullish and points to a $109 target. We are targeting a move into the $84-85 range before the company's early August earnings report.

Suggested Options:
We are suggesting the August calls. At this time we don't see any strikes above $80.00.

BUY CALL AUG 75.00 NBL-HO OI= 566 current ask $5.80
BUY CALL AUG 80.00 NBL-HP OI=1517 current ask $2.70

Picked on July 05 at $ 78.15
Change since picked: + 1.25
Earnings Date 08/03/05 (unconfirmed)
Average Daily Volume = 1.0 million

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Quanex - NX - close: 55.48 change: +0.43 stop: 52.45

After three months of consolidating between $46 and $55 shares of NX finally broke out through the top of its trading range. We suggested a trigger at $55.10 to catch the breakout through resistance at the $55.00 level. NX hit our trigger last Thursday opening the play. The move higher also produced a new quadruple-top breakout buy signal on its Point & Figure chart that now points to a $68 target. We remain bullish and would suggest new positions at current levels. Our target is the $59.50-60.00 range and we plan to exit before NX's late August earnings report.

Suggested Options:
We are suggesting the August calls although Novembers are also available.

BUY CALL AUG 50.00 NX-HJ OI= 10 current ask $6.60
BUY CALL AUG 55.00 NX-HK OI=110 current ask $3.30
BUY CALL AUG 60.00 NX-HL OI= 23 current ask $1.25

Picked on July 07 at $ 55.10
Change since picked: + 0.38
Earnings Date 08/25/05 (unconfirmed)
Average Daily Volume = 337 thousand

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Rio Tinto - RTP - close: 125.89 chg: +0.24 stop: 121.49

We have little new to report on for RTP. The stock continues to show some volatility but we remain bullish with shares above its rising trendline of support (see chart). The current challenge for the bulls is the simple 100-dma, which is acting as resistance. The P&F chart is bullish and points to a $154 target but shows resistance near the $130.00 level. We are targeting a move into the $129.50-130.00 range but plan to exit before the early August earnings report.

Suggested Options:
We are not suggesting new plays at this time but if RTP bounces from the $123-124 range again then traders might want to use the August strikes.

Picked on June 27 at $123.33
Change since picked: + 2.56
Earnings Date 08/03/05 (unconfirmed)
Average Daily Volume = 160 thousand

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Sunoco Inc - SUN - close: 120.30 chg: -0.59 stop: 114.99 *new*

Some of the oil stocks hit some profit taking on Friday after crude oil fell under $60.00 a barrel. The profit taking in SUN was pretty minor and the stock continues to look poised for new highs. The big news this past week was the Thursday night (late afternoon) announcement that SUN will split its stock 2-for-1 on August 1st. We remain bullish but readers have a choice. One could hope for a dip back toward the $117.00 region near its simple 10-dma? Or go long here with the stock above round-number support/resistance at the $120 level. Our target is the $124.50-125.00 range. We are raising our stop loss to $114.99. Don't forget that we plan to exit before SUN's July 21st earnings report. This is an unconfirmed date. Some sources say SUN will report on July 18th. Other say August 3rd.

Suggested Options:
We are suggesting the August calls.

BUY CALL AUG 115.00 SUN-HC OI=523 current ask $8.60
BUY CALL AUG 120.00 SUN-HD OI=525 current ask $5.60
BUY CALL AUG 125.00 SUN-HE OI=434 current ask $3.40

Picked on July 03 at $117.87
Change since picked: + 2.43
Earnings Date 07/21/05 (unconfirmed)
Average Daily Volume = 1.3 million

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Wellpoint Inc - WLP - close: 70.75 chg: +0.84 stop: 67.49

Health insurer WLP continues to slowly drift higher. It's the slowly part that worries us the most as options lose time premium as they near expiration. We are not suggesting new positions and continue to target the $74.00-75.00 range. However, we are planning on exiting before WLP's July 27th earnings report.

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

Picked on June 05 at $ 68.40
Change since picked: + 2.35
Earnings Date 07/27/05 (unconfirmed)
Average Daily Volume = 3.5 million
 

Put Updates

Ambac Fincl. - ABK - close: 69.05 chg: -0.25 stop: 71.01*new*

We have good news to report. Up until Friday the stock has been swinging up and down based on the churn in the major indices. Yet on Friday the stock failed to participate in the market's rally and that's good news for the bears. It sounds like investors are taking a cautious approach here. ABK has nearly $4 billion in exposure to the London subway system but the company put our a statement saying they didn't expect to payout any claims relating to the Thursday bombings. We continue to target the $65.50-65.00 range. We are lowering our stop loss to $71.01. More conservative traders should seriously consider the risks of opening new plays here since we plan to exit before the company's July 20th earnings report.

Suggested Options:
We are suggesting the August puts.

BUY PUT AUG 70.00 ABK-TO OI= 421 current ask $2.70
BUY PUT AUG 65.00 ABK-TM OI= 604 current ask $0.90

Picked on June 26 at $ 69.62
Change since picked: - 0.57
Earnings Date 07/20/05 (unconfirmed)
Average Daily Volume = 992 thousand
 

Dropped Calls

None
 

Dropped Puts

KLA-Tencor - KLAC - close: 46.30 chg: +0.94 stop: 45.76

No surprises here. We've been warning readers for two days that KLAC and the SOX were showing too much strength and that odds of being stopped out were growing. Friday's rally was lead by the tech sector with the NASDAQ adding 1.7 percent. The SOX pushed even harder and added 2.5 percent. This helped fuel a two percent gain in KLAC and the stock quickly hit our stop loss at $45.76 closing the play.

Picked on June 29 at $ 43.88
Change since picked: + 2.42
Earnings Date 07/28/05 (unconfirmed)
Average Daily Volume = 5.4 million
 

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