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Call Updates

SurModics - SRDX - close: 43.37 chg: +1.14 stop: 39.99

Another day, another gain for SRDX. The stock just marked its fifth straight gain in a row. The stock is looking overbought here and we're planning to exit on Tuesday afternoon at the close to avoid holding over the Wednesday afternoon earnings report. More conservative traders may want to tighten their stops to breakeven. Our target for SRDX is the $44.50-45.00 range.

Picked on October 18 at $ 40.95
Change since picked: + 2.42
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 249 thousand

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Target Corp - TGT - close: 55.22 change: +0.58 stop: 52.49

Retail stocks enjoyed the markets widespread rally on Monday but TGT's participation seemed half-hearted. Shares of TGT spent most of the day churning sideways. Tomorrow might be different. After the bell tonight the company announced that its October same-store sales would probably fall in the upper half of its 3%-5% projections. Today's bounce might be a new entry point but we would not be surprised to see shares retest the $54.00 level and its 50-dma as support again.

Picked on October 19 at $ 54.01
Change since picked: + 1.21
Earnings Date 11/10/05 (unconfirmed)
Average Daily Volume = 3.8 million
 

Put Updates

Broadcom - BRCM - close: 43.25 chg: +0.80 stop: 45.01

Traders need to stay nimble here. Our use of a trigger may have backfired. We did not want to suggest shorts after Friday's big day because normally a bearish engulfing candlestick pattern needs to produce some confirmation. We suggested a trigger at $41.95 as a way to try and catch any bearish follow through to Friday's sell signal. Unfortunately, the market's rally today has put us on the defensive. Shares of BRCM dipped to last Wednesday's low this morning before bouncing and the stock bounced pretty strongly. We would not suggest new plays at this time and if the SOX semiconductor index trades over the 450 level we'd probably suggest exiting BRCM early to avoid further losses.

Picked on October 24 at $ 41.95
Change since picked: + 1.30
Earnings Date 10/20/05 (confirmed)
Average Daily Volume = 7.3 million
 

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: 75.80 chg: +0.74 stop: n/a

ABC continues to trade near the pivotal $75.00 level but we would not suggest new strangle positions at this time, unless shares pull back again closer to the $75 mark (within 25 cents). Investors looking to initiate strangle positions will want to do so before the company's earnings report in early November. The options involved in our previously suggested strangle is the November $80 call and the November $70 put.

Picked on October 16 at $ 74.81
Change since picked: + 0.99
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Administaff - ASF - close: 40.34 change: +0.94 stop: n/a

The market rally on Monday is lending more strength to ASF's bullish trend. The stock broke out above the $40.00 level with a strong 2.3% gain. ASF remains near the $40.00 level and we would still consider launching new strangle positions with the stock within the $41-39 range (although we'd prefer the 40.50-39.50 range). The options we are suggesting for the strangle are the November $45 call and the November $35 put. Try and keep your investment under $1.80. Our plan is to exit if either option hits $2.75 or more.

Picked on October 23 at $ 39.40
Change since picked: + 0.94
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 433 thousand

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Genentech - DNA - close: 86.95 chg: +1.91 stop: n/a

Biotech stocks rallied very strongly today and DNA joined them with a 2.2% gain. Today's move has pushed the stock above its simple 100-dma and more importantly outside our entry window to initiate new strangle positions. We are no longer suggesting new plays and have moved into a wait-and-see mode. If DNA does move back toward the $85 mark before its earnings report traders can try and open new positions. The options in our suggested strangle are the December $95 call and the December $75 put. We plan to exit if either options rises to $4.50-5.00 or more.

Picked on October 20 at $ 84.83
Change since picked: + 2.12
Earnings Date 10/10/05 (confirmed)
Average Daily Volume = 3.9 million

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eBay Inc. - EBAY - close: 39.42 chg: +0.13 stop: n/a

EBAY slipped lower this morning but managed a bounce near its 100-dma and 200-dma near $38.25. The market's strength helped push EBAY back over the $39.00 level late in the day. We are not suggesting new strangle positions but if EBAY traders much nearer to the $40.00 mark readers might want to consider it. The options in our suggested strangle are the November $45 call and the November $35 put. If either option rises to $2.00 or more we'll exit.

Picked on October 18 at $ 40.42
Change since picked: - 1.00
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 18.3 million

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General Dynamics - GD - cls: 118.58 chg: +2.04 stop: n/a

GD turned in a pretty nice bounce today pushing the stock back into its previous trading range. We are not suggesting new plays at this time. Our strangle involves the November $125 call and the November $115 put. We plan to sell if either option rises to $4.00 or more.

Picked on October 09 at $119.59
Change since picked: - 1.01
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Harman Intl - HAR - cls: 104.95 chg: +2.91 stop: n/a

Shares of HAR are bouncing again and look poised to re-challenge resistance near $110.00. We are not suggesting new strangle positions. Our strangle involves the November $110 call and the November $90 put. We plan to exit if either option rises to $6.00 or more.

Picked on October 18 at $100.80
Change since picked: + 4.15
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 739 thousand

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ITT Industries - ITT - close: 112.85 chg: +2.35 stop: n/a

Monday's market rally helped push ITT to a new relative high from its recent consolidation around the $110 level. We are no longer suggesting new strangle positions for this play. Our current strategy involves the November $115 call and the November $105 put. We'll plan to exit if either option rises to into the $4.50-5.00 range.

Picked on October 20 at $109.96
Change since picked: + 2.89
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 532 thousand

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Kos Pharma - KOSP - close: 60.31 chg: +1.28 stop: n/a

KOSP rebounded back above the $60.00 mark and spent the second half of the day churning sideways in a narrow range between 60.10 and 60.43. This consolidation offered readers another entry point to launch new strangle positions. Once KOSP trades outside the $60.50-59.50 range we would not suggest new positions. The options we like for a strangle are the November $65 call and the November $55 put. We'll plan to exit if either option rises to $5.00 or more.

Picked on October 20 at $ 59.80
Change since picked: + 0.51
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 460 thousand

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Legg Mason - LM - cls: 109.70 chg: +4.10 stop: n/a

LM produced a big move higher today. The stock surged 3.88% to out perform its peers in the broker-dealer sector. The stock's big move almost pushed the November $110 call side of our strangle to our target of $5.00. Currently the November $110 call is trading at $4.60bid/$4.70ask. Of course that could easily change tomorrow. LM is due to report earnings before the opening bell. Wall Street is looking for profits of $0.97 a share. If LM fails to deliver the stock could plummet. If LM does deliver there could be a morning spike higher, which could be our opportunity to exit on the call side. Be ready!

Picked on October 12 at $102.59
Change since picked: + 7.11
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 966 thousand

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Loews - LTR - close: 91.93 change: +1.99 close: n/a

Wow! Shares of LTR almost gapped outside our suggested entry window to launch a strangle position. Shares opened at $90.50 and later traded back down to $90.45 before pushing higher into the afternoon. We would not suggest new plays at this time although readers can keep an eye on the stock for a pull back entry point close to $90.00 before the company's earnings report due out this Thursday. The options in our strategy are the December $95 calls and the December $85 puts. We'll plan to exit if either option rises to $5.00 or more.

Picked on October 23 at $ 89.94
Change since picked: + 1.99
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 602 thousand

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O'Reilly Auto. - ORLY - close: 26.91 chg: +0.11 stop: n/a

Tomorrow is the big day. ORLY is expected to report earnings after the closing bell tomorrow. Wall Street estimates are at 37 cents a share. We're not suggesting new strangle positions but the sideways action does make for a tempting entry point. Traders can still try and launch a strangle before the close tomorrow but we'd only consider it if shares traded closer to $27.50 (within 20 cents). The options in our strangle are the November $30 calls and the November $25 puts although now December strikes are available and traders might want to think about playing Decembers instead. We'll plan to sell if either option rises to $1.75 or more.

Picked on October 09 at $ 28.23
Change since picked: - 1.32
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 513 thousand

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Verifone Holdings - PAY - cls: 22.20 chg: +0.99 stop: n/a

PAY is starting to see more momentum. The stock is up five days in a row and today's gain was more than 4.6% on strong volume. The stock is challenging resistance near $22.50. We're not suggesting new strangle plays at this time. The options in our suggested January strangle are the January $17.50 puts and the January $22.50 calls. We plan to sell if either of these hits $4.50 or more. We also suggested an alternative, more aggressive, November strangle with the November $17.50 puts and the November $22.50 calls. We would sell if either of these hits $2.00 or more.

Picked on October 12 at $ 19.98
Change since picked: + 2.22
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand

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P.F.Chang's - PFCB - close: 50.93 chg: -0.01 stop: n/a

Wow! PFCB could not breakout over the $52.00 level despite the roaring rally across the rest of the market. Looks like no one is interested in placing any more bets before the company's earnings report on October 26th. We are not suggesting new plays unless PFCB trades back into the 50.40-49.60 range. Our suggested strangle is with the November $45 puts and the November $55 calls. We'll sell if either option rises to $2.50 or more.

Picked on October 20 at $ 49.99
Change since picked: + 0.94
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 912 thousand
 

Dropped Calls

Cardinal Health - CAH - close: 64.97 chg: +0.91 stop: 61.95

The big rally in the markets helped lift CAH to a new one-year high. The stock looks poised to breakout over the $65.00 level and its MACD has produced a new buy signal. Our update on Sunday suggested that we exit on Monday if the stock produces any strength. We're going to follow that suggestion and close the play. More aggressive traders might want to keep the play open for another day and exit on Tuesday afternoon before the close. CAH is due to report earnings on Wednesday morning.

Picked on September 25 at $ 61.95
Change since picked: + 3.02
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 2.0 million
 

Dropped Puts

Teleflex Inc. - TFX - close: 66.45 chg: +0.96 stop: 68.01

The bounce today in shares of TFX had a lot of volume behind it. That's normally not a good sign if you're bearish. We're suggesting that readers exit early. The stock will probably bounce higher if the major indices continue to rally and earnings for TFX are expected on Wednesday.

Picked on October 13 at $ 66.49
Change since picked: - 0.04
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 174 thousand
 

Dropped Strangles

E*trade Financial - ET - close: 18.49 chg: +0.61 stop: n/a

Target achieved. The broker-dealers turned in a very big day. The XBD index added just over three percent and shares of ET out performed its peers with a 3.4% rally on strong volume pushing the stock to a new all-time high. The November $17.00 call in our strangle hit our target in the $1.60-2.00 range. The $17 call is currently trading at $1.60bid/$1.70ask. This marks a 60% rise in value from our investment, plus we still have November $15 put that we would let expire since it is virtually worthless (and should ET suddenly crash before it expires we'll cash in on the put too but not likely).

Picked on October 16 at $ 16.28
Change since picked: + 2.21
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 3.4 million
 

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