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Call Updates

Amer. Intl Group - AIG - cls: 60.51 chg: +0.16 stop: 58.99

AIG tried to rally today but the rally lost momentum near the top of its short-term trading range under $62.00. The stock did manage to close in the green, which is a sign of relative strength. The question now is how will Wall Street react to AIG's disclosure that its hurricane Katrina losses will come in around $1.1 billion. We did not see any action in shares of AIG in the after hours markets so we do not know what the bias is for tomorrow morning. Right now, with the broader indices looking so vulnerable to more selling, we would not suggest new bullish positions in AIG. More conservative traders may want to seriously consider upping their stops toward short-term support near $60.00 or exiting altogether.

Picked on September 11 at $ 61.23
Change since picked: - 0.72
Earnings Date 11/08/05 (unconfirmed)
Average Daily Volume = 7.2 million

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Apache - APA - close: 75.60 change: -1.00 stop: 69.49

We expected to see some profit taking in shares of APA following yesterday's big gains. The fact that APA rallied off its lows of the session is a sign of strength. In the news Prudential reiterated their "neutral" stance on APA while A.G.Edwards reiterated their "buy" rating. Headlines that OPEC would pump up to 2 million more barrels of oil per day starting October 1st initially prompted some selling in crude oil and the oil stocks. Of course pumping more oil isn't going to solve the problem for us. First of all they didn't say what kind of oil they would ship. We need light, sweet crude and what OPEC (namely Saudi Arabia, since they're the only ones with any excess capacity) has in abundance is the heavier, sour oil. Not all refineries can process the sour stuff. Furthermore, with some of our refineries offline due to hurricane Katrina, and potentially more refinery shutdowns if hurricane Rita hits the Texas coast, it won't matter how much oil we have if we can't refine it into fuel. If APA dips toward the $74 level we would use it as a new bullish entry point. Our short-term target is the $79-80 range.

Picked on September 18 at $ 73.42
Change since picked: + 2.18
Earnings Date 10/27/05 (unconfirmed)
Average Daily Volume = 2.6 million

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Cameco Corp - CCJ - close: 52.90 chg: -1.80 stop: 49.49

CCJ hit some heavy profit taking amid the market wide sell-off. Look for a bounce in the $51.00-51.50 range as a new bullish entry point. Our target is the $58-60 range.

Picked on September 18 at $ 53.30
Change since picked: - 0.40
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 862 thousand

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Altria Group - MO - close: 72.86 change: -0.12 stop: 69.90

MO is showing its defensive colors today with a 12-cent decline compared to the market-wide weakness. We would use a bounce in the $71.50-72.00 range as a new bullish entry point. Our target is the $78.00-79.00 range.

Picked on September 18 at $ 73.14
Change since picked: - 0.28
Earnings Date 10/19/05 (unconfirmed)
Average Daily Volume = 6.7 million

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Noble Energy - NBL - close: 45.42 chg: -0.23 stop: 42.49

We see no change from our previous update. Our target is the $49.00-50.00 range.

Picked on September 11 at $ 44.90 *post-split price
Change since picked: + 0.52
Earnings Date 11/02/05 (unconfirmed)
Average Daily Volume = 796 thousand

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Noble Corp - NE - close: 71.16 change: -1.22 stop: 67.85

NE pulled back during Tuesday's profit taking but traders where there to buy the bounce near the $70 level. We would use any bounce from here as a new bullish entry point. Our target is the $78-80 range.

Picked on August 31 at $ 71.30
Change since picked: - 0.14
Earnings Date 10/17/05 (unconfirmed)
Average Daily Volume = 1.8 million
 

Put Updates

Adobe Sys. - ADBE - close: 27.74 chg: -0.98 stop: n/a

Wow! The sell-off in the last two sessions has been pretty dramatic. Weakness in the technology sector has undermined any post-earnings rally in ADBE. Remember, we don't care what direction ADBE moves as long as it moves enough one way to make our play profitable. As long as you didn't sell the puts (which were pretty much worthless as of Friday) we can still profit from any serious decline. We have just under five weeks before the October strikes expire but hopefully it won't take that long. The longer ADBE does take to produce any sort of significant move the more we're going to lose due to time premium erosion. (Remember, this is a strangle play on ADBE's recent earnings report. We are not suggesting new entries.)

Picked on September 13 at $ 26.82
Change since picked: + 0.92
Earnings Date 09/15/05 (confirmed)
Average Daily Volume = 6.2 million

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Black & Decker - BDK - close: 80.62 chg: -1.69 stop: 85.05*new*

So far so good. BDK continues to sink and hit new four-month lows today. The selling did stop near round-number support at the $80.00 mark. At this point we would look for an oversold bounce, probably back toward the $82 level maybe higher. Readers can watch the oversold bounce to fail and use it as a new entry point. Our target is the $78-77 range. We are adjusting the stop loss to $85.05.

Picked on September 14 at $ 83.31
Change since picked: - 2.69
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume = 636 thousand

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Hovnanian - HOV - close: 51.19 chg: -1.68 stop: 56.01*new*

Wow! The homebuilders just got smacked today. The DJUSHB index lost 4.79% following negative reports from the housing starts and building permits this morning. Shares of HOV, already on the decline, lost another 3.17% on very big volume. We are lowering our stop loss to $56.01. Our target is the $50.25-50.00 range but traders may want to consider exiting early on any decline under $51.00.

Picked on September 18 at $ 54.75
Change since picked: - 3.38
Earnings Date 09/07/05 (confirmed)
Average Daily Volume = 1.2 million

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Hershey Co. - HSY - close: 57.08 change: -0.57 stop: 59.51

HSY has finally broken down through the bottom of its three-week trading range. This could be used as a new bearish entry point. Our target is the $54.00-53.50 range.

Picked on September 14 at $ 57.90
Change since picked: - 0.82
Earnings Date 10/20/05 (unconfirmed)
Average Daily Volume = 760 thousand

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MBIA Inc. - MBI - close: 57.66 chg: -0.62 stop: 59.01

It looks like Friday's rally in the financials appeared to be a rebalancing fluke. The banking indices have posted two strong declines this week. Looking more closely at MBI we see a clear failed rally under the $59.00 level and at its simple 200-dma. Readers can use today's action as a new bearish entry point. Our target is the $54.25 mark.

Picked on September 13 at $ 57.75
Change since picked: - 0.09
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 1.2 million
 

Dropped Calls

None
 

Dropped Puts

Fedex Corp - FDX - close: 77.00 chg: -0.93 stop: 82.01

Time's up. Remember, our play called for us to exit ahead of FDX's earnings report, which is due out tomorrow. The trend certainly looks bearish but there are too many unknown variables to make it worthwhile holding over the earnings report. If you chose to continue holding the play we'd probably tighten the stop loss to something closer to the $80 level. Wall Street expects FDX to report $1.18 per share.

Picked on August 23 at $ 82.99
Change since picked: - 5.99
Earnings Date 09/21/05 (confirmed)
Average Daily Volume = 2.0 million
 

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