Burlington North/Santa Fe - BNI - cls: 57.47 chg: +0.04 stop: 55.99
We highly suggest traders keep one eye on the exit door. Our strategy outlined over the weekend said that if BNI doesn't produce any bullish follow through on Monday or Tuesday this week we're going to bail out early. Today's 4-cent gain on a day most of the market closed higher is not what we call follow through. If BNI doesn't turn in a strong performance tomorrow we'll close the play early! Our short-term target is the $59.95-60.00 range.
Picked on October 00 at $ 00.00
Biosite Inc. - BSTE - close: 67.21 chg: +2.29 stop: 61.49*new*
Target achieved! BSTE continues to out perform and the stock surged again today with a 3.5% gain on above average volume. The rally stalled at $67.50, which is the May 2005 high. The $67.50 mark was also out first target. According to our play description we are suggesting that traders sell half their position here at $67.50 (which will probably be short-term resistance). Our secondary target is the $69.50-70.00 range. We are raising the stop loss to $61.49. We are not suggesting new plays at this time.
Picked on October 13 at $ 63.39
Cardinal Health - CAH - close: 63.25 chg: -0.23 stop: 61.95*new*
Lack of follow through on Friday's gain is not a good sign for CAH. We would be very cautious about initiating new bullish positions here. Putting action behind our caution we're raising the stop loss to $61.95 (breakeven). We are targeting a move into the $66-67 range before the company's earnings report on October 26th.
Picked on September 25 at $ 61.95
Pre Paid Legal - PPD - close: 40.44 chg: -0.09 stop: 37.85
PPD's lack of follow through on Friday's breakout is disappointing but the intraday rebound from the $40.00 level could be used as a new bullish entry point. Our target is the $44.00-45.00 range. We do plan to exit ahead of the October 24th earnings report but at this time that date is unconfirmed.
Picked on October 10 at $ 40.10
Target Corp - TGT - close: 53.26 change: -0.23 stop: 51.49
Retail stocks produced an anemic rally today as investors continue to worry over inflation. Shares of TGT did not breakout over technical resistance at its 50-dma and thus the stock has not hit our trigger to go long (buy calls) at $54.01. Don't forget that TGT has an analyst conference on October 18th! Meanwhile in the news TGT did announce that October same-store sales appear to be inline with its +3-5% forecasts.
Picked on October xx at $ xx.xx <-- see TRIGGER
Teleflex Inc. - TFX - close: 66.84 chg: +0.48 stop: 69.01
There are no surprises here. We've been warning readers to watch for an oversold bounce. A failed rally under $68.00 could be used as a new bearish entry point. We see no changes from our weekend update.
Picked on October 13 at $ 66.49
(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.)
AmerisourceBergen - ABC - cls: 75.52 chg: +0.71 stop: n/a
So far so good. It's not too late to consider new strangle positions on ABC. The stock is at a pivotal level hovering around the $75 mark. We are suggesting the November $80 call and the November $70 put. Once ABC trades above $76 or under $74 we would not suggest new positions. We do plan on holding over the November 3rd earnings report, which should produce more volatility.
Picked on October 16 at $ 74.81
E*trade Financial - ET - close: 16.35 chg: +0.07 stop: n/a
Shares of ET produced some volatility this morning as traders reacted to a positive earnings report from rival Schwab (SCH) that came out before the opening bell. However, the rally failed at the $17.00 level and shares of ET closed back under its 10 and 50-dma's. We would continue to suggest new strangle positions here with the November $17.00 call and the November $15.00 put. You'll want to have your positions set before ET reports earnings this Wednesday.
Picked on October 16 at $ 16.28
General Dynamics - GD - cls: 120.22 chg: +0.14 stop: n/a
It's not too late to consider launching strangle positions in GD. The stock continues to trade sideways on either side of the $120.00 mark. Once shares move past the $121 level we'll stop suggesting new entries (or under $118.75). We're suggesting the November $125 call and the November $115 put.
Picked on October 09 at $119.59
Google Inc. - GOOG - close: 305.00 chg: +8.86 stop: n/a
GOOG is doing what it does best and that's create volatility. Some positive analyst comments about the company's earnings estimates helped inspire the oversold rebound from its simple 100-dma. At the $305 mark GOOG is near the top of our suggested range to consider initiating strangle positions. Our weekend play description outlined two alternatives - a strangle using November strikes and a strangle using December strikes. Please see our weekend play description for more details.
Picked on October 16 at $296.14
Legg Mason - LM - cls: 103.08 chg: -1.70 stop: n/a
The pull back in shares of LM today is another opportunity to consider initiating new strangle positions on the stock. If you choose to open a strangle here be sure to do so before LM reports earnings on October 24th (still unconfirmed). However, we would truly prefer to see LM pull back to the $100 region ($101-99) if you're thinking about launching a new strangle position but that would require the stock to breakdown under its simple 100-dma. Please see our weekend update for more details.
Picked on October 12 at $102.59
3M Co. - MMM - close: 72.47 chg: +1.75 stop: n/a
Looks like someone is placing some bullish bets on MMM ahead of tomorrow's earnings report. Today's big gain has ended our window to initiate new strangle positions. It's time to sit back and watch. MMM is due to report earnings tomorrow before the opening bell. Wall Street is looking for $1.08 a share. Remember, we are planning to exit if either option in our strangle trades into the $1.60-2.00 range. More aggressive traders may want to hold out for more.
Picked on October 12 at $ 70.38
O'Reilly Auto. - ORLY - close: 26.64 chg: +0.26 stop: n/a
We have nothing new to report on for ORLY. At this point we're in a "wait-and-see" mode. We're not suggesting new strangle positions since the stock has fallen out of its neutral consolidation pattern. We're expecting to see more movement following the October 25th earnings report.
Picked on October 09 at $ 28.23
Verifone Holdings - PAY - cls: 19.98 chg: +0.22 stop: n/a
Today offered traders another entry point to launch new strangle positions on PAY. The stock is coiling sideways near the $20.00 mark. We're suggesting the January $22.50 call and the January $17.50 put. More aggressive traders might want to consider the November strikes (see our weekend play for more details).
Picked on October 12 at $ 19.98