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Call Updates

Cardinal Health - CAH - close: 62.92 chg: +0.67 stop: 59.85

A bounce in some of the healthcare and biotech stocks helped push CAH higher on Thursday. This might be a new entry point but we hesitate to suggest new positions. The major averages are still weak and only the NASDAQ, spurred by semiconductors, produced an oversold bounce. We would probably wait for a new move over $63.50 or even $64 before considering new longs in CAH.

Picked on September 25 at $ 61.95
Change since picked: + 0.97
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 2.0 million

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Pre Paid Legal - PPD - close: 39.65 chg: +0.63 stop: 37.85

PPD did produce a bounce from the $39 level and its 200-dma. More aggressive traders may want to use this as a new bullish entry point. Conservative types can wait for a move over its simple 50-dma (40.22) before initiating new positions.

Picked on October 10 at $ 40.10
Change since picked: - 0.45
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 72 thousand
 

Put Updates

Biotech HOLDRs - BBH - close: 184.28 chg: +2.64 stop: 185.25

Biotech stocks rebounded sharply today making yesterday's breakdown in the BTK biotech index look like a bear-trap pattern. Helping push the group higher was AMGN, the largest component in the BTK, which added 1.4% as it bounced from its 10-dma in spite of news that Johnson & Johnson was suing AMGN. We are going to keep BBH on the play list as a potential bearish candidate. Our trigger to buy puts is at $179.75. If triggered we'll target a decline into the $172.50-170.00 range near its exponential 200-dma (currently at 171).

Picked on October xx at $xxx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 622 thousand

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Ryland Group - RYL - close: 63.45 chg: +0.38 stop: 66.75

Homebuilders got a reprieve today and the group witnessed a minor bounce. The trend in RYL remains bearish but shares might retest the $65.50-66.00 region as overhead resistance again before continuing lower. We would not suggest new positions at this time. Our target is the $60.50-60.00 range.

Picked on October 05 at $ 65.70
Change since picked: - 2.19
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 1.0 million

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Teleflex Inc. - TFX - close: 65.94 chg: -1.36 stop: 69.01

TFX has hit our trigger at $66.49 opening the play. The stock continued lower following yesterday's breakdown. Shares lost just over two percent today on very strong volume, which suggests more weakness ahead. Don't be surprised to see an initial bounce from the 100-dma and/or the $65 level. The $67.00 region should now act as overhead resistance. Our target is the 62.50-62.00 range. We plan to exit before the close on Wednesday, October 26th. The company announced it will report earnings that afternoon after the closing bell.

Picked on October 13 at $ 66.49
Change since picked: - 0.55
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 174 thousand

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.)

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General Dynamics - GD - cls: 119.14 chg: -0.30 stop: n/a

As long as GD continues to hover between $119 and $121 we would still consider new strangle positions here. Once the stock moves out of this range we would not suggest new plays. Our strategy suggests buying the November 125 call and the November 115 put. We do plan on holding over the October 19th earnings report.

Picked on October 09 at $119.59
Change since picked: - 0.40
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Legg Mason - LM - cls: 102.55 chg: -0.04 stop: n/a

Shares of LM traded in a narrow range today offering traders a great chance to initiate positions for this strangle play. We are suggesting traders buy the November $110 call and the November $90 put. We do plan to hold over the October earnings report.

Picked on October 12 at $102.59
Change since picked: - 0.04
Earnings Date 10/20/05 (unconfirmed)
Average Daily Volume = 966 thousand

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3M Co. - MMM - close: 70.07 chg: -0.31 stop: n/a

MMM traded in a $1.17 range today giving readers a chance to initiate positions for our strangle strategy. We are suggesting traders buy the November $75 call and the November $65 put. It is interesting to note that today's intraday low was under support at the $70.00 level. This produced a new triple-bottom breakdown sell signal on its P&F chart. MMM may be tipping its hand and hinting at a new leg down. We will hold over the October earnings report.

Picked on October 12 at $ 70.38
Change since picked: - 0.31
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 3.0 million

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O'Reilly Auto. - ORLY - close: 26.30 chg: -0.02 stop: n/a

We have nothing new to report on for ORLY. The Wednesday gap down out of its consolidation pattern ended our window to open new strangle positions. We are not suggesting new plays. Don't be surprised to see ORLY rally higher to test resistance near the 200-dma or back toward the $27.40 level to fill the gap. 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: - 1.93
Earnings Date 10/26/05 (unconfirmed)
Average Daily Volume = million

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Verifone Holdings - PAY - cls: 19.70 chg: -0.28 stop: n/a

PAY did display some volatility today with an intraday dip to the $18.80 level but the stock managed to rebound back toward its trading range. Today's weakness may be hinting that the next leg is bearish. As long as PAY trades in the $19.25-20.75 range we would consider new positions. Once the stock breaks out of this range we would not suggest new strangle positions. We are somewhat encouraged to see that the spread between the bid and ask has narrowed today. We are suggesting two alternative entry points. If you like the November strikes then consider buying the November $22.50 call and the November $17.50 put. We are suggesting the January strikes and the January $22.50 call and the January $17.50 put.

Picked on October 12 at $ 19.98
Change since picked: - 0.28
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand
 

Dropped Calls

None
 

Dropped Puts

None
 

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