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Call Updates

Las Vegas Sands - LVS - close: 40.22 chg: +0.62 stop: 38.25*new*

The good news here is that LVS' rebound continued despite the market's weakness on Friday. Furthermore LVS has managed to breakout (again) over the $40.00 mark and its 100-dma and exponential 200-dma. Unfortunately, we are running out of time. We plan to exit on Tuesday afternoon at the close to avoid LVS' earnings report on Wednesday. We are not suggesting new positions. We are raising the stop loss to $38.25.

Suggested Options:
Time has almost run out. We are not suggesting new positions.

Picked on July 21 at $ 40.31
Change since picked: - 0.09
Earnings Date 08/03/05 (confirmed)
Average Daily Volume = 934 thousand

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Pediatrix Med Group - PDX - cls: 78.42 chg: -0.16 stop: 76.10*new*

PDX continues to creep higher and the stock is near our $79.50-80.00 target range. Unfortunately, we are running out of time with this play too. Our plan is to exit near the closing bell on Tuesday to avoid PDX's earnings report on Wednesday. More conservative traders may want to exit now. We are not suggesting new positions. We are raising the stop loss to $76.10 or breakeven.

Suggested Options:
We only have a couple of days left in this play. We are not suggesting new positions.

Picked on July 11 at $ 76.10
Change since picked: + 2.32
Earnings Date 08/03/05 (unconfirmed)
Average Daily Volume = 158 thousand
 

Put Updates

AutoZone - AZO - close: 97.44 chg: -1.94 stop: 100.01

Good news! Resistance at the $100 level held and AZO has produced a failed rally that plays along with what looks like a big double-top pattern. We see this as another bearish entry point to buy puts. The market is nearing what is traditionally a seasonal weak period in the August-September time frame. Seasonal trends combined with the market's currently short-term overbought status certainly plays into the bears' hands. We do see potential support near $95.00 but we're going to adjust our target from the 50-dma (now at 93.75) to $93.00-92.50.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 100.00 AZO-UT OI= 633 current ask $4.50
BUY PUT SEP 95.00 AZO-US OI= 553 current ask $2.20
BUY PUT SEP 90.00 AZO-UR OI=2350 current ask $0.95

Picked on July 25 at $ 98.13
Change since picked: - 0.69
Earnings Date 09/20/05 (unconfirmed)
Average Daily Volume = 748 thousand

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Fannie Mae - FNM - close: 55.86 chg: -1.44 stop: 59.01*new*

And the race is on! FNM appears to have begun its next leg lower. The breakdown last week under the $57.50 level was followed up with an oversold bounce that quickly failed. Friday's decline of 2.5 percent pushed the stock under technical support at its 100-dma. Volume has been above average on the last two days of declines. This looks like another bearish entry point to buy puts. We are targeting the $51.50-50.00 range. We are lowering the stop loss to $59.01. More conservative traders may want to use $58.51.

Suggested Options:
The only options available appear to be January leaps. We're suggesting the January 06's.

BUY PUT JAN06 60.00 WFN-ML OI=12410 current ask $5.70
BUY PUT JAN06 55.00 WFN-MK OI=19958 current ask $3.10
BUY PUT JAN05 50.00 WFN-MJ OI=31766 current ask $1.65

Picked on July 27 at $ 56.49
Change since picked: - 0.63
Earnings Date 00/00/05 (unconfirmed)
Average Daily Volume = 3.3 million

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Infosys Tech. - INFY - cls: 71.18 chg: -0.75 stop: 74.05*new*

We remain bearish on INFY but the stock has certainly struggled with any downward momentum. Overall the scenario does tend to weigh more towards the bears. INFY recently failed at resistance in the $79 region (under round-number resistance at $80.00) and broke down after producing what looks like a double-top pattern. The catalyst for the breakdown was INFY's earnings report. Investors have grown more concerned over the company's ability to keep profit margins from sliding. The move has produced a sell signal on its P&F chart that points to a $59 target. Furthermore the NASDAQ looks very overbought and way over due for some profit taking. The fact that the NASDAQ is right under resistance at the 2200 level is another factor. Yet despite it all we suspect that INFY's lack of downward momentum may be due to strength in the Indian stock market. The main index has been up five days in a row and hitting new all-time highs each day. The Indian markets are also due for some profit taking and it may be soon. This past Friday saw the BSE Sensex Index struggle with the 7700 level all day long before turning lower Friday afternoon. At this time we would not suggest new bearish positions until INFY traded back under the 70.00 mark. We are lowering the stop loss to $74.05, just above technical resistance at the bottom of its recent gap down.

Suggested Options:
We are not suggesting new plays at this time but if an opportunity presents itself we like the September puts.

Picked on July 20 at $ 69.92
Change since picked: + 1.26
Earnings Date 07/12/05 (confirmed)
Average Daily Volume = 922 thousand

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Lehman Brothers - LEH - cls: 105.13 chg: -1.79 stop: 108.01

After a week we are right back where we started but this time we're probably in better shape. The major indices are starting to show some weakness under resistance. The bulk of earnings season has passed so there could be a drought of good news to keep the markets higher. Looking at the XBD broker-dealer index we see the sector has broken down under its simple 10-dma, which has been technical support for the past couple of months. The XBD is also showing a MACD sell signal. LEH is also showing a recently minted MACD sell signal. This remains a very speculative, high-risk play but Friday's decline is certainly a positive development. Our plan is to buy the August $100 puts and gamble that LEH will trade near the $100 level before the August $100 puts expire. These are currently trading near $0.35 a contract. If we're right then these options could see some serious appreciation. If we're wrong it will be a complete loss. We are willing to buy puts at current levels but more conservative traders who choose to speculate here might want to wait for a drop under $105.00 first.

Suggested Options:
We are speculating with the August $100 puts.

BUY PUT AUG 100.00 LES-TT OI=3081 current ask $0.35

Picked on July 21 at $105.13
Change since picked: + 0.00
Earnings Date 06/14/05 (confirmed)
Average Daily Volume = 2.7 million

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3M Co. - MMM - close: 75.00 change: +0.30 stop: 76.77*new*

Hmm.. Friday's strength in MMM comes as a surprise. The DJIA lost 0.6% and we would have expected MMM to follow suit. Instead shares unexpected gapped higher and managed to maintain most of its gains for the session. We remain bearish but traders may want to wait for another decline under $74.40 before initiating positions. We are lowering our stop loss to $76.77 just over the July 15th high. Our target is the $70-68 range compared to the P&F chart, which points to a $63 target.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 75.00 MMM-UO OI=870 current ask $1.95
BUY PUT SEP 70.00 MMM-UN OI=554 current ask $0.45

Picked on July 19 at $ 74.29
Change since picked: + 0.71
Earnings Date 07/18/05 (confirmed)
Average Daily Volume = 3.4 million

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Panera Bread - PNRA - close: 58.25 chg: -0.05 stop: 60.01

PNRA is a new bearish candidate from the Thursday night newsletter. We see no changes from our previous update so we're reprinting below. Our trigger to buy puts is $57.49. The play description begins here:

Wednesday PNRA pre-announced its revenues for the second quarter and told Wall Street they expected earnings in the 32-33 cent range. Analysts were already looking for 33 cents a share so investors naturally sold the stock on this news. PNRA broke down under support near $60.00 and technical support at its 100-dma (where PNRA had bounced twice in April and May). We honestly expected an oversold bounce back toward the $60 level today but that failed to materialize. The lack of participation in today's market rally could spell bad news for bulls. Now that PNRA has let the earnings cat out of the bag the technical breakdown looks like a new entry point to buy puts. We are going to suggest buying puts with a trigger at $57.49. Our target will be the $52.50-51.00 range or the simple 200-dma (currently near $51.00), whichever PNRA hits first. Traders with more patience might continue to wait for a bounce back toward the $60.00 level and use a failed rally there as a new entry point. We are still going to exit this play ahead of its August 9th earnings report but more aggressive traders may want to consider holding over the report since PNRA has already pre-released some of its numbers. The odds of a surprise are a lot smaller now.

Suggested Options:
This is a very short-term play so we're only suggesting the August puts.

BUY PUT AUG 60 UPA-TL OI=1774 current ask $2.90
BUY PUT AUG 55 UPA-TK OI=3220 current ask $0.90

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/09/05 (confirmed)
Average Daily Volume = 601 thousand
 

Dropped Calls

None
 

Dropped Puts

Best Buy Co - BBY - close: 76.60 chg: -1.87 stop: 76.61

We are choosing to exit this play early and unopened. It's true that the recent failed rally under the $80.00 level looks like a tempting bearish reversal but the upcoming 3-for-2 stock split will change the amount of momentum (both up and down) in this stock. We're going to take a step back and re-evaluate BBY late next week.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/14/05 (confirmed)
Average Daily Volume = 3.3 million
 

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