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Call Updates

Biosite Inc. - BSTE - close: 66.65 chg: -0.56 stop: 61.49

Shares of BSTE tagged a new five-year high today but couldn't hold it. Yesterday we suggested the stock is due for some profit taking and we hold the same view today. Watch for a dip into the $64-65 range. Our secondary target is the $69.50-70.00 range.

Picked on October 13 at $ 63.39
Change since picked: 3.26
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume = 261 thousand


Cardinal Health - CAH - close: 62.92 chg: -0.33 stop: 61.95

Healthcare and drug stocks were a little weak today and CAH was no exception. The stock continues to churn sideways. Considering the amount of time we have left in this play before CAH's earnings report we're not suggesting new positions.

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


Pre Paid Legal - PPD - close: 40.66 chg: 0.22 stop: 37.85

PPD bucked the bearish trend in the markets today with a minor gain. The stock seemed to find support at the $40.60 level all day long.

Picked on October 10 at $ 40.10
Change since picked: 0.56
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 72 thousand


Target Corp - TGT - close: 53.22 change: -0.04 stop: 51.49

TGT tried to rally this morning and did make it over its simple 50-dma but it couldn't breakout over the $54.00 level. We remain on the sidelines untriggered. Considering the failed rally in the major averages today we would be very hesitant to initiate new bullish positions in TGT. Currently our trigger to buy calls is at $54.01.

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 11/10/05 (unconfirmed)
Average Daily Volume = 3.8 million

Put Updates

Teleflex Inc. - TFX - close: 65.64 chg: -1.20 stop: 69.01

TFX could not escape the market weakness today and fell almost 1.8% on the session. The stock looks poised to test round-number support at the $65 mark and technical support at the 100-dma. Our target is the $62.50-62.00 range but we plan to exit ahead of next week's earnings report.

Picked on October 13 at $ 66.49
Change since picked: - 0.85
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.)


AmerisourceBergen - ABC - cls: 76.17 chg: 0.65 stop: n/a

ABC has continued to rebound and the move over $76 has closed our window to initiate strangle positions. We're not in a wait-and-see mode.

Picked on October 16 at $ 74.81
Change since picked: 1.36
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand


E*trade Financial - ET - close: 16.50 chg: 0.15 stop: n/a

Tomorrow should produce some volatility for ET and probably set the new direction in the stock price. The company is due to report earnings after the closing bell tomorrow. Wall Street is looking for ET to turn in earnings of $0.27 a share. We are no longer suggesting new strangle positions as the strategy moves into a wait-and-see mode. We plan to exit if either option trades in the $1.60-2.00 range. Our time frame is before the November expiration.

Picked on October 16 at $ 16.28
Change since picked: 0.22
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 3.4 million


General Dynamics - GD - cls: 119.92 chg: -0.30 stop: n/a

The excitement should begin tomorrow. GD is expected to report earnings before the opening bell tomorrow morning. Analysts are looking for profits of $1.76 a share. The stock has essentially been treading water for the last four weeks so we are expecting a reaction in the stock price. Remember, our goal was to double our money. If either option in our strangle trades at $4.00 or more we'll exit.

Picked on October 09 at $119.59
Change since picked: 0.33
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand


Google Inc. - GOOG - close: 303.28 chg: -1.72 stop: n/a

GOOG seems to be struggling to build on yesterday's bullish move. The stock is moving back toward the $300 level, which might offer another entry point to initiate strangle positions. Don't forget we are suggesting that investors launch positions before GOOG reports earnings on Thursday. In the news today GOOG was upgraded to a "buy" with a $360 price target. After hours it looks like GOOG is ticking higher after a positive earnings report from YHOO.

Picked on October 16 at $296.14
Change since picked: 7.14
Earnings Date 10/20/05 (confirmed)
Average Daily Volume = 8.1 million


Legg Mason - LM - cls: 101.60 chg: -1.48 stop: n/a

The decline in LM could be good news for us. The stock did breakdown under its simple 100-dma and it did under perform its peers in the broker-dealer sector. However, the pull back toward the $100.00 level makes for a better entry point for our strangle positions. We're suggesting the November $110 calls and the November $90 puts.

Picked on October 12 at $102.59
Change since picked: - 0.99
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 966 thousand


O'Reilly Auto. - ORLY - close: 26.11 chg: -0.53 stop: n/a

We see no change from our previous updates on ORLY. Today's two-percent decline has the stock poised to breakdown under the $26 level. We're expecting to see more volatility following the October 25th earnings report. We are not suggesting new plays.

Picked on October 09 at $ 28.23
Change since picked: - 2.12
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = million


Verifone Holdings - PAY - cls: 20.19 chg: 0.21 stop: n/a

PAY continues to vacillate on either side of the $20.00 level. We would continue to suggest new strangle positions as long as shares trade within the $19.50-20.50 region. 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
Change since picked: 0.21
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand

Dropped Calls

Burlington North/Santa Fe - BNI - cls: 56.19 chg: -1.28 stop: 55.99

There could be trouble ahead for BNI. The stock was immediately weak on Tuesday and dipped under the $56.00 level this afternoon to hit our stop loss at $55.99. We were cautious when we listed the play and we were cautious yesterday with the lack of bullish follow through. If BNI breaks down under the simple 50-dma it would suggest a deeper consolidation in progress and we'd keep an eye on the simple 200-dma.

Picked on October 16 at $ 57.43
Change since picked: - 1.24
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume = 2.0 million

Dropped Puts


Dropped Strangles

3M Co. - MMM - close: 74.71 chg: 2.24 stop: n/a

Target achieved. MMM's earnings report produced the needed volatility to push the calls into our target range. The company reported earnings before the bell this morning. Depending on whom you want to believe MMM beat analysts' estimates by 2 or 4 cents a share. This pushed the stock to gap higher and shares hit a high of $75.39 intraday. The intraday strength pushed the November $75.00 call (MMM-KO) to an intraday high of $1.85. Our target was to sell if either option traded into the $1.60-2.00 range. We're closing the play. More aggressive traders may want to think about holding open a small position since today's breakout could represent a change in direction for the stock. However, the company's guidance going forward was pretty humdrum. The major stock averages produced a failed rally today and they look poised to turn lower tomorrow so that raises the chances of some profit taking in MMM tomorrow.

Picked on October 12 at $ 70.38
Change since picked: 4.33
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 3.0 million

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