Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Cardinal Health - CAH - close: 62.25 chg: -0.21 stop: 59.85

There is not much change in CAH. The stock continues to churn sideways above the $62 level like it has for the last couple of sessions. We are not suggesting new bullish positions in this bearish market environment. More conservative traders may want to think about exiting early if CAH trades under $62 or $61.

Picked on September 25 at $ 61.95
Change since picked: + 0.30
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 2.0 million

---

Pre Paid Legal - PPD - close: 39.02 chg: -0.49 stop: 37.85

Danger! We've been telling readers to look for a probable dip back toward the $39.00 level. PPD gave us that dip today. The problem is the lack of any attempt at a bounce. The move today also produced a small, bearish-engulfing candlestick, which is normally bearish. Keep an eye on the 200-dma near 38.88. We would not suggest new positions at the moment considering the bearish market environment. Wait for a new relative high over the 50-dma now at 40.38.

Picked on October 10 at $ 40.10
Change since picked: - 1.08
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 72 thousand
 

Put Updates

Ryland Group - RYL - close: 63.07 chg: -0.27 stop: 66.75

Wednesday marked another day of declines for the homebuilders. The DJUSHB index lost 1.49%. Shares of RYL spent most of the session churning sideways but its trend remains bearish. Our target is the $60.50-60.00 range.

Picked on October 05 at $ 65.70
Change since picked: - 2.57
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 1.0 million
 

Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

---

General Dynamics - GD - cls: 119.44 chg: +0.03 stop: n/a

We continue to see no change from our weekend update. GD is a strangle play. We're trying to capitalize on any post-earnings reaction. The company is expected to report on October 19th and we will hold over the report. We are suggesting readers buy the November 125 call and the November 115 put.

Picked on October 09 at $119.59
Change since picked: - 0.15
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

---

O'Reilly Auto. - ORLY - close: 26.32 chg: -1.13 stop: n/a

ORLY was downgraded to a "neutral" rating by CSFB and the stock reacted by gapping lower at the open. Today's drop below technical support at its simple and exponential 200-dma's also produced a new MACD sell signal. Today's 4% decline is also a breakout from its neutral consolidation pattern, although our bias has been bearish and it's why we list ORLY with the puts. Readers should also note that now ORLY has broken out from its consolidation pattern we are no longer suggesting new entry points for this strangle play (where traders buy both an OTM call and an OTM put). ORLY is due to report earnings on October 26th. We will hold over the report.

Picked on October 09 at $ 28.23
Change since picked: - 1.91
Earnings Date 10/26/05 (unconfirmed)
Average Daily Volume = million
 

Dropped Calls

BP Prudhoe Bay - BPT - close: 71.30 chg: -1.11 stop: 72.49

Looks like we should have stuck with the trigger over $80.00. Oil's rally on Tuesday failed to see any follow through on Wednesday. The energy sector experienced another strong day of profit taking as the OIX index lost almost two percent and the OSX services index lost about 1.6%. Shares of BPT followed with a 1.5% decline and a drop back toward support at the bottom of its trading range near $70.00. We've been stopped out at $72.49.

Picked on October 11 at $ 75.05
Change since picked: - 3.75
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 175 thousand

---

Bear Stearns - BSC - close: 101.46 chg: -1.89 stop: 102.49

Amazing! BSC just posted its eight straight day of losses. This looks like a new record for the stock. Helping push BSC to a new four-week low was a sharp 2.3% sell-off in the XBD broker-dealer index. Today's decline in the XBD broke through technical support at its 50-dma. Meanwhile shares of BSC fell through its own 50-dma and traded under its simple 200-dma on an intraday basis. Odds of an oversold bounce have grown very high especially with the stock testing its 200-dma but we have been stopped out at $102.49.

Picked on October 02 at $109.75
Change since picked: - 8.29
Earnings Date 09/15/05 (confirmed)
Average Daily Volume = 1.2 million

---

Cameco Corp - CCJ - close: 51.25 chg: -1.27 stop: 49.49

We're choosing to exit early in CCJ. The stock dipped to $50.20 and managed a meager bounce from the $50 level and its rising simple 50-dma. CCJ might manage to hold support at the $50.00 level but we're choosing to exit early to minimize the damage. Some of the technical indicators are suggesting further declines in the stock.

Picked on September 18 at $ 53.30
Change since picked: - 2.05
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 862 thousand

---

Cigna - CI - close: 108.86 change: -3.56 stop: 111.49

The action in Cigna looks very bearish! Yesterday the stock broke down below support at its simple 50-dma but it still had price support near $112. Today the stock continued to decline and this time fell through additional support at the $110 level and its simple 100-dma. Today's decline was fueled by very strong volume suggesting even more weakness ahead. Plus, today's loss also reversed its P&F chart into a new sell signal. We have been stopped out at $111.49.

Picked on September 29 at $116.51
Change since picked: - 7.65
Earnings Date 11/02/05 (unconfirmed)
Average Daily Volume = 991 thousand

---

Altria Group - MO - close: 70.92 change: -1.14 stop: 69.90

Another failed rally at the $73 level, a new closing low for the month, and a bearish engulfing candlestick all sound like a good reason to exit early in MO. The stock "should" still have support at the 50-dma near 70.65 and again at the $70.00 level but we're not counting on it in this market.

Picked on September 18 at $ 73.14
Change since picked: - 2.22
Earnings Date 10/19/05 (unconfirmed)
Average Daily Volume = 6.7 million
 

Dropped Puts

Black & Decker - BDK - close: 77.11 chg: -1.11 stop: 82.01

Target achieved. Another day of market declines was good news for the bears. Shares of BDK sank below short-term support at the $78 level and hit 76.03. Our target was the $78.00-77.00 range.

Picked on September 14 at $ 83.31
Change since picked: - 6.20
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume = 636 thousand

---

Wynn Resorts - WYNN - close: 42.77 chg: -0.98 stop: 45.11

It's just not our day for stop losses is it? Shares of WYNN rallied intraday to $45.25 before promptly turning tailing and losing 2.2% on the session to perform a perfect failed rally. Today's action looks like a new bearish entry point. The problem is that we have been stopped out at $45.11.

Picked on October 06 at $ 42.18
Change since picked: + 0.59
Earnings Date 10/31/05 (unconfirmed)
Average Daily Volume = 1.3 million
 

Play Update Archives