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Call Updates

Biosite Inc. - BSTE - close: 67.69 chg: +0.59 stop: 61.49

The relative strength in shares of BSTE today was pretty impressive. The stock ignored the market-wide weakness to hit another new multi-year high. Considering the overall market's bearish posture we would strongly consider exiting early right here for a profit. Our secondary target is the $69.50-70.00 range.

Picked on October 13 at $ 63.39
Change since picked: + 4.30
Earnings Date 10/25/05 (unconfirmed)
Average Daily Volume = 261 thousand

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Cardinal Health - CAH - close: 64.17 chg: +0.23 stop: 61.95

CAH also displayed some relative strength today. Shares hit a new all-time high at $64.79 before paring its gains this afternoon. We are not suggesting new positions. Our short-term target is the $66-67 range.

Picked on September 25 at $ 61.95
Change since picked: + 2.22
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 2.0 million

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Pre Paid Legal - PPD - close: 40.47 chg: -0.64 stop: 39.75

PPD was not able to escape the market-wide sell-off today and fell back toward round-number support near $40.00 and technical support at its 10-dma and 50-dma. We are not suggesting new plays because time is running out. Readers need to decide on whether to exit tomorrow afternoon before the closing bell or on Monday afternoon to avoid the company's earnings report expected on Monday after the close.

Picked on October 10 at $ 40.10
Change since picked: + 0.37
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 72 thousand

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SurModics - SRDX - close: 41.49 chg: +0.01 stop: 39.49

SRDX managed a decent rebound from its afternoon lows and closed in the green. However, if the major averages continue to sell-off tomorrow we'd probably look for SRDX to experience more profit taking too. We plan to exit ahead of SRDX's October 26th earnings report.

Picked on October 18 at $ 40.95
Change since picked: + 0.54
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 249 thousand

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Target Corp - TGT - close: 55.76 change: -0.24 stop: 51.49

TGT's rally from yesterday continued into the first 90 minutes of trading today. Unfortunately, TGT was unable to hold its gains and volume on today's pull back was higher than yesterday's breakout. This looks like a short-term top. We would expect TGT to pull back toward the $55.00 level and maybe all the way back to $54.00. We would not suggest new positions at this time. Wait for the dip and then watch for the bounce to begin.

Picked on October 19 at $ 54.01
Change since picked: + 1.75
Earnings Date 11/10/05 (unconfirmed)
Average Daily Volume = 3.8 million
 

Put Updates

Teleflex Inc. - TFX - close: 64.97 chg: -0.88 stop: 69.01

TFX has closed at a new two-month low and under round-number support at the $65.00 mark and under technical support at its simple 100-dma. If the market produces any bearish follow through on today's sell-off we would expect TFX to participate and trade toward the top of its July gap near $63.50. We are not suggesting new positions.

Picked on October 13 at $ 66.49
Change since picked: - 1.52
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: 75.36 chg: -0.80 stop: n/a

The market weakness today has pulled ABC back toward support near $75.00 and its simple 50-dma. This could be used as another entry point to launch new strangle positions.

Picked on October 16 at $ 74.81
Change since picked: + 0.55
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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eBay Inc. - EBAY - close: 39.15 chg: -2.86 stop: n/a

After last night's earnings report EBAY issued some lackluster guidance going forward. This pushed the stock lower in after hours trading and we expected shares to trade lower today. Well trade lower they did. The stock opened at $40.68 and quickly traded under the $40 level. Yet it's interesting to note that the low was near its 100-dma and its 200-dma and the stock remains inside its $39.00-42.00 trading range. We are not suggesting new plays at this time (although nimble traders may have been able to open them near the $40 level today). Our goal is to double our money so we'll plan on selling if either option trades in the $2.00-2.30 range. We are now in a wait and see mode.

Picked on October 18 at $ 40.42
Change since picked: - 1.29
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 18.3 million

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E*trade Financial - ET - close: 17.30 chg: +0.25 stop: n/a

Yesterday's rally continued today for ET. The stock gapped open higher and hit a new high over the $17.75 level before pulling back. We are not suggesting new plays at this time but a dip back toward $16.50 might offer a new entry point to consider a strangle position. Currently we're in 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: + 1.02
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 3.4 million

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General Dynamics - GD - cls: 117.98 chg: -3.08 stop: n/a

The action in GD today looks pretty bearish but in reality the stock remains inside or at least close to its four-week trading range. It will take a move under $117.50 or over $122.27 to break the current trading range. We are not suggesting new positions at this time but a bounce back to the $120.00 mark could be used as a new entry point for a strangle. 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: - 1.61
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Google Inc. - GOOG - close: 303.20 chg: -5.50 stop: n/a

The market-wide weakness started to undermine some of the investor confidence in GOOG and shares fell back toward the $303 level before the close and its earnings report. That would have been the last chance to consider a new strangle position. After the close GOOG blew away the estimates. Net revenues topped the $1 billion mark for the first time ever. Meanwhile net income rose more than 600% over the same quarter last year. The positive earnings news has launched shares of GOOG to new highs. The stock is trading in the $333-334 levels in after hours markets. The big pop tomorrow, should GOOG hold these after hours gains, will push the put options in our strangle toward zero but our call options should explode higher. Keep an eye on the November $320 calls and the December $330 calls (we suggested two alternatives - a November 320c/280p strangle and a December 330c/270p strangle). The goal was to sell/exit if either side of our strangle traded into the $18.00-20.00 range.

Picked on October 16 at $296.14
Change since picked: + 7.06
Earnings Date 10/20/05 (confirmed)
Average Daily Volume = 8.1 million

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Harman Intl - HAR - cls: 105.25 chg: +2.15 stop: n/a

Reaction to HAR's earnings report last night helped push shares of HAR to $109.65 this morning. Unfortunately, the stock couldn't hold its gains and fell back to fill this morning's gap. Shares look poised to continue higher tomorrow. Post-earnings we are not suggesting new strangle positions. We're in a wait-and-see mode. Our plan is to exit if either option in the strangle trades to $6.00 or more.

Picked on October 18 at $100.80
Change since picked: + 4.45
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 739 thousand

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Legg Mason - LM - cls: 103.54 chg: -1.13 stop: n/a

We see no changes from our previous update on LM. 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: + 0.95
Earnings Date 10/24/05 (unconfirmed)
Average Daily Volume = 966 thousand

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O'Reilly Auto. - ORLY - close: 26.65 chg: -0.22 stop: n/a

ORLY displayed some strength this morning and broke through resistance near $27.00 and its simple and exponential 200-dma's. Yet the rally failed under old support (now resistance) near $27.35. Today's move should effectively fill the gap from October 12th and could pave the way for the next move lower. We are not suggesting new positions at this time.

Picked on October 09 at $ 28.23
Change since picked: - 1.58
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = million

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Verifone Holdings - PAY - cls: 21.02 chg: +0.31 stop: n/a

PAY is showing some relative strength today and looks poised to continue higher tomorrow. We are not suggesting new strangle positions.

Picked on October 12 at $ 19.98
Change since picked: + 1.04
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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