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Call Updates

Biosite Inc. - BSTE - close: 67.10 chg: +0.45 stop: 61.49

Hmm... given the magnitude of today's market rally we're disappointed that BSTE didn't participate more. The stock is already short-term overbought and today's action would suggest that the stock does need to consolidate a bit before turning higher again. 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: + 3.71
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume = 261 thousand

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Cardinal Health - CAH - close: 63.94 chg: +1.02 stop: 61.95

A strong day for healthcare (HMO.X +2.4%) and drugs (DRG.X +1.4%) helped push CAH to a new closing higher near $64.00. We are not suggesting new plays at this time and plan to exit ahead of next week's earnings report. Our short-term target is the $66-67 range.

Picked on September 25 at $ 61.95
Change since picked: + 1.99
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 2.0 million

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Pre Paid Legal - PPD - close: 41.11 chg: +0.45 stop: 39.75 *new*

Shares of PPD dipped to support near $40.00 and its 50-dma this morning but the stock rebounded higher once the market rally got underway. We are running out of time on this play. PPD is expected to report earnings on Monday, October 24th after the market's closing bell. We do not want to hold over the report. At the moment we're considering an exit on Friday afternoon at the close or on Monday afternoon at the close. We are going to raise the stop loss to $39.75 under today's low.

Picked on October 10 at $ 40.10
Change since picked: + 1.01
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 72 thousand

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SurModics - SRDX - close: 41.48 chg: +0.53 stop: 39.49

SRDX offered another bullish entry point this morning. Shares dipped back toward broken resistance now new support near $40.00 and its 100-dma. We see no changes from Tuesday's play description. Our target is the $44.50-45.00 range. We plan to exit ahead of SRDX's October 26th earnings report.

Picked on October 18 at $ 40.95
Change since picked: + 0.53
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 249 thousand

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Target Corp - TGT - close: 56.00 change: +2.78 stop: 51.49

It was a very big day for retailers. The RLX retail index surged higher with a 2.8% gain. Shares of TGT were leading the way with a big breakout (+5.2%) over resistance at its 50-dma and the $54.00 level. Volume came in about double the daily average! Our trigger to buy calls was at $54.01. Our mid-November (before earnings) target is the $59-60 range. Keep an eye on the RLX index. The RLX did breakout over its short-term trend of lower highs but is still under resistance near 440 and its simple and exponential 200-dma's.

Picked on October 19 at $ 54.01
Change since picked: + 1.99
Earnings Date 11/10/05 (unconfirmed)
Average Daily Volume = 3.8 million
 

Put Updates

Teleflex Inc. - TFX - close: 65.85 chg: +0.21 stop: 69.01

TFX dipped toward round-number support at the $65 level this morning. More importantly the afternoon rebound in shares of TFX significantly under performed the rest of the market. That's good news for the bears although we would still expect an oversold bounce from here toward the simple 10-dma near $67.50. Our target is the $62.50-62.00 range but we plan to exit ahead of next week's earnings report. We are not suggesting new positions.

Picked on October 13 at $ 66.49
Change since picked: - 0.64
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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AmerisourceBergen - ABC - cls: 76.16 chg: -0.01 stop: n/a

There is nothing new to report on for ABC. We are now in a wait-and-see mode. We are not suggesting new positions.

Picked on October 16 at $ 74.81
Change since picked: + 1.35
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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eBay Inc. - EBAY - close: 42.01 chg: +1.59 stop: n/a

Wednesday was a strong day for EBAY. The stock started off strong and continued to rise through most of the day as investors turned optimistic ahead of the company's earnings report. After the closing bell EBAY reported earnings of 18 cents a share, which missed estimates of 20 cents a share. The company blamed its recent Skype acquisition and issued a mixed view going forward. After hours saw EBAY trading lower near $39.00. We're going to make an adjustment to this play. Previously we suggested that readers needed to launch their positions before the earnings report. However, if EBAY opens up near $40.00 or trades back toward the $40 region (39.50-40.50) tomorrow readers might want to consider a new strangle with the same November $45 call and November $35 put options. We'd like to keep our total investment in the $1.00-1.15 range if possible. Our goal is to double our money so we'll plan on selling if either option trades in the $2.00-2.30 range.

Picked on October 18 at $ 40.42
Change since picked: + 1.59
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 18.3 million

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E*trade Financial - ET - close: 17.05 chg: +0.55 stop: n/a

Shares of ET joined the rest of the market and surged higher in the last 90 minutes of trading. The close put ET back above technical resistance at its 10 and 50-dma's. After the closing bell ET reported earnings of 28 cents a share, which was one-cent above analysts' estimates. Profits rose 35% for the quarter and revenues soared to a record $422.8 million. After hours the stock was trading slightly higher above the $17.00 level. We are not suggesting new plays. 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: + 0.77
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 3.4 million

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General Dynamics - GD - cls: 121.06 chg: +1.14 stop: n/a

Shares of GD produced a lot of volatility today. The company reported earnings this morning and beat Wall Street's estimates by eight cents. The company then followed up by raising its earnings guidance. Traders seemed confused. Shares of GD gapped higher and traded to $121.68 before quickly falling to its lows of the day and outside its recent trading range to $117.78. Then just as quickly GD began to rebound. The real question now is that once Wall Street has digested the earnings news what direction will the push the stock price? We are no longer suggesting new strangle positions in the stock. 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: + 1.47
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Google Inc. - GOOG - close: 308.70 chg: +5.42 stop: n/a

Tomorrow is the big day for GOOG. The company is expected to report earnings after the closing bell. Analysts are looking for earnings of $1.36 a share. Meanwhile in the news GOOG is being sued by a publishing group over its plans to digitize a significant number of books. Plus, the company is still fighting over its Gmail name in the United Kingdom. Right now we are not suggesting new strangle positions but if GOOG were to dip back toward the $300 level tomorrow before the close traders might want to consider launching a strangle. Please see the October 16th update for details.

Picked on October 16 at $296.14
Change since picked: +12.56
Earnings Date 10/20/05 (confirmed)
Average Daily Volume = 8.1 million

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Harman Intl - HAR - cls: 103.10 chg: +2.30 stop: n/a

HAR almost gapped open too high and came close to aborting our play before it began. Yet after its bullish open at $101.40 the stock dipped to $98.80 before the market's afternoon rally. After the closing bell the company reported earnings that were 12 cents above Wall Street's estimates. Plus, management raised its 2006 earnings guidance. The stock was trading in the $108-109 range in the after hours session. We are aiming for a 50% profit on the play so we plan to exit if either option rises to $6.00 or more! Our suggested strangle is with the November $110 calls and the November $90 puts.

Picked on October 18 at $100.80
Change since picked: + 2.30
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 739 thousand

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Legg Mason - LM - cls: 104.67 chg: +3.07 stop: n/a

Broker-dealer stocks turned in a very strong day. The XBD index added more than three percent and shares of LM paced the move with its own three-percent gain. LM was also upgraded to a "neutral" today by Banc of America. We are not suggesting new positions at this time. If LM were to trade back toward the $100 level traders might consider a new strangle.

Picked on October 12 at $102.59
Change since picked: + 2.08
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 966 thousand

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O'Reilly Auto. - ORLY - close: 26.87 chg: +0.76 stop: n/a

The action in ORLY looked bullish today. The stock rallied from short-term support near $26 and pushed against resistance near $27 and its simple and exponential 200-dma's. The net effect was a bullish engulfing candlestick pattern. We are not suggesting new positions at this time.

Picked on October 09 at $ 28.23
Change since picked: - 1.36
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = million

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Verifone Holdings - PAY - cls: 20.71 chg: +0.52 stop: n/a

The rally today has pushed PAY outside our window to consider launching new strangle positions. If shares pull back again to the $20.00 level then readers can consider new plays. (see our weekend play for more details).

Picked on October 12 at $ 19.98
Change since picked: + 0.73
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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