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Call Updates

Building Mat. - BMHC - cls: 90.72 chg: +2.66 stop: 84.49 *new*

Monday was a strong session for BMHC. The stock added just over three percent to breakout over the $90 level again. We do not see much change from our previous updates. Our five-week target on the stock is the $98-99 range. We are going to raise the stop loss to $84.49. We hesitate to raise the stop much higher since BMHC has been a bit volatile lately.

Picked on November 02 at $ 87.55
Change since picked: + 3.17
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 536 thousand

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Peabody Energy - BTU - close: 79.98 chg: -1.38 stop: 76.99

Oil stocks took a hit today as investors reacted to news of dropping gasoline prices and warm weather in the northeast. BTU is not an oil stock but a coal stock but shares fell in sympathy with the rest of the energy sector. The intraday bounce from the $79 level on Monday could have been another bullish entry point as BTU effectively filled the minor gap higher from last week. However, we would wait for a move back over $80.50 to confirm upward direction before initiating new call positions. The next level of support, if BTU falls under the $79 mark, is the 50-dma near $77.65. Our seven-week target is the $89.50-90.00 range.

Picked on November 06 at $ 81.36
Change since picked: - 1.38
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 2.6 million

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Intel Corp. - INTC - close: 24.50 chg: +0.51 stop: 22.75

INTC displayed some relative strength today and was part of the tech sector's leadership with a 2.1% gain. Today's gain in INTC is also a bullish breakout over the $24 level and its simple 50-dma. If you are the patient type you might want to wait for a pull back before initiating new call positions in INTC. Broken resistance at $24 should now act as new support. A dip to $24 would be an attractive entry point. We do expect some resistance at the 200-dma overhead near the $25 level. Our year-end target is the $26.00-26.50 range.

Picked on November 06 at $ 23.99
Change since picked: + 0.51
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 51.6 million

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Legg Mason - LM - cls: 112.07 change: -1.50 stop: 106.95

Before the opening bell LM received a downgrade on valuation concerns. The stock gapped lower and dipped to its simple 10-dma near $107.80 before rebounding back above the top of its previous trading range (and what should be support) at the $110 level. We would use the bounce today as a new bullish entry point. Our seven-week target is the $119-120 range.

Picked on November 02 at $111.69
Change since picked: + 0.38
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 904 thousand

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Rockwell Autom. - ROK - cls: 56.36 chg: +0.62 stop: 53.49

ROK bounced again from its early dip toward the $55.00 level. Broken resistance at the $55 level should act as new support. We see no changes from our weekend update on the stock. If you'd rather not chase the stock here there will probably be another dip to the $55 level again. Our seven-week target is the $61.00-62.00 range.

Picked on November 03 at $ 55.90
Change since picked: + 0.46
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 804 thousand

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Sears Holding - SHLD - cls: 124.02 chg: +0.02 stop: 121.99

There is little change in the price of SHLD and no change from our weekend update on the stock. Our goal is to catch a breakout from its current trading range. Our trigger to buy calls is at $128.51. If triggered we'll target a move into the $139.50-140.00 range. We would consider this a higher-risk, aggressive play since the stock can be pretty volatile. We do not plan on holding past the December 7th earnings report.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 12/07/05 (unconfirmed)
Average Daily Volume = 3.2 million
 

Put Updates

Bard C.R.- BCR - close: 63.00 change: +0.03 stop: 63.55

The tug-of-war between the bulls and the bears is now in its third-day of a stalemate. The stock is coiling tightly in a sideways pattern that will eventually see a breakout. We'd like to think the prevailing bearish trend will come out the winner but there is no guarantee and we're not suggesting new positions. If BCR continues lower our target is the $58 level.

Picked on October 26 at $ 61.70
Change since picked: + 1.30
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 745 thousand

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Career Educ. - CECO - cls: 34.79 chg: +0.99 stop: 35.01

CECO turned in a pretty strong bounce today adding almost three percent. The rally did stall under the bottom of last week's gap down. It's common for the upper or lower edge of a gap down or window to act as support or resistance. We are still on the sidelines. Our strategy is to catch a breakdown under support at the $33.00 level. Our trigger to buy puts is at $32.95. If triggered our target is the $30-29 range.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/02/05 (confirmed)
Average Daily Volume = 1.3 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: 76.59 chg: +0.09 stop: n/a

We see no changes from our weekend update on ABC. There are only two weeks left before November options expire. That means more conservative traders may want to adjust their target on the November strangle from $3.50 to $2.10(breakeven). The options in the November strangle were the November $80 calls (ABC-KP) and the November $70 puts (ABC-WN). We also suggested a December strangle and the options for the December strangle are the December $80 calls (ABC-LP) and the December $70 puts (ABC-XN). We are leaving our target at $5.00 for the December position. We are not suggesting new plays.

Picked on October 16 at $ 74.81
Change since picked: + 1.78
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Genentech - DNA - close: 93.11 chg: -0.84 stop: n/a

DNA spent the day consolidating some of its recent gains. We see no changes from our weekend update. We still have seven weeks left before the December options expire. Our target was for a rise to $4.50-5.00 in the strangle and the December $95 calls (DWN-LS) look like they'll be the winning side.

Picked on October 20 at $ 84.83
Change since picked: + 8.28
Earnings Date 10/10/05 (confirmed)
Average Daily Volume = 3.9 million

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eBay Inc. - EBAY - close: 41.87 chg: +0.29 stop: n/a

EBAY is still trying to breakout over resistance at the $42 level. If it is going to breakout we hope it happens soon. Over the weekend we adjusted our target to breakeven at $1.05. The options in our strangle were the November $45 calls (XBA-KI) and the November $35 puts (XBA-WG).

Picked on October 18 at $ 40.42
Change since picked: + 1.45
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 18.3 million

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General Dynamics - GD - cls: 116.50 chg: +0.12 stop: n/a

There is little change in shares of GD today and no change from our weekend update on the play. We need to see GD pick a direction and move pretty soon. There are only two weeks left before November options expire. Therefore we are adjusting our target for the strangle from $4.00 to breakeven at $2.00. The options in our strangle were the November $115 puts (GD-WC) and the November $125 calls (GD-KE).

Picked on October 09 at $119.59
Change since picked: - 3.09
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Harman Intl - HAR - cls: 104.55 chg: +3.73 stop: n/a

Yeah! HAR is finally showing some signs of life again. If we have any hope for this strangle play HAR needs to make a real effort to breakout over resistance at the $110 mark. Over the weekend we adjusted our target to $2.75, which is actually a loss compared to our cost of $3.80 but we're trying to recover some of our capital. The options in our strangle were the November $110 calls (HAR-KB) and the November $90 puts (HAR-WR).

Picked on October 18 at $100.80
Change since picked: + 3.76
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 739 thousand

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Hutchinson Tech. - HTCH - cls: 25.22 chg: -0.28 stop: n/a

We see no change from our weekend update on HTCH. The options in our strangle are the January $30 calls (UTQ-AF) and the January $20 puts (UTQ-MD). Our target is for a rise to $3.00. We are not suggesting new strangles at this time.

Picked on October 26 at $ 24.89
Change since picked: + 0.33
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 666 thousand

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Inamed Corp. - IMDC - close: 76.77 change: +1.90 stop: n/a

Shares of IMDC rallied strongly today added 2.5% making it one of today's best performers. The very strong volume (more than 3 times the norm) is a bullish sign. We are not suggesting new plays at this time. The options in our strangle are the December $75 calls (UZI-LO) and the December $65 puts (UZI-XM)). Our target is for a rise to $5.00 or more. It looks like the calls may be the winning side relatively soon.

Picked on October 30 at $ 70.63
Change since picked: + 6.14
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 533 thousand

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Kos Pharma - KOSP - close: 57.86 chg: -1.48 stop: n/a

KOSP tried to bounce this morning but the rally failed under the $60 level, which apparently is acting as round-number resistance. We are not suggesting new plays. There are only two weeks left before November options expire and conservative traders may want to seriously consider adjusting their targets lower. Our target is for a rise to $5.00 or more. Our hypothetical cost in the play is about $2.90. The options are the November $65 call (KQW-KM) and the November $55 put (KQW-WK).

Picked on October 20 at $ 59.80
Change since picked: - 1.94
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 460 thousand

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Lear Corp - LEA - close: 30.20 chg: -0.04 stop: n/a

Perfect! LEA continued to trade in a very tight range near the $30.00 level on Monday. This provided a great opportunity to launch new strangle positions. We're suggesting an entry window of $30.50-29.50. The options in our strangle are the January $35 calls (LEA-AG) and the January $25 puts (LEA-ME). Try and keep your costs under $1.75. We are targeting a rise to $3.20 or more.

Picked on November 06 at $ 30.24
Change since picked: + 0.04
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 1.8 million

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Legg Mason - LM - cls: 112.07 chg: -1.50 stop: n/a

LM was downgraded this morning before the opening bell. Shares reacted sharply and dipped to $107.82 before rebounding back above the $110 level. We see no changes from our Weekend update. The call side of our strangle is currently the winning side. Watch the November $110 calls (LM-KB). Our target is for a rise to $5.00 or more.

Picked on October 12 at $102.59
Change since picked: + 9.48
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 966 thousand

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Loews - LTR - close: 94.61 change: +0.08 close: n/a

LTR continues to consolidate sideways above the $94 level so we see no change from our weekend update. We're not suggesting new strangle positions in LTR. The options in our strategy are the December $95 calls (LTR-LS) and the December $85 puts (LTR-XQ). We'll plan to exit if either option rises to $5.00 or more.

Picked on October 23 at $ 89.94
Change since picked: + 4.67
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 602 thousand

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Microsoft - MSFT - close: 27.01 change: +0.35 stop: n/a

The rally in MSFT continues. The stock added 1.3% as investors responded positively to news that the company was the lead contender to buy a stake in rival AOL from TimeWarner. The stock does look short-term overbought and due for a pull back. We are not suggesting new strangle positions. Our strangle is based on the December $27.50 call (MSQ-LY) and the December $22.50 put (MSQ-XX). We are aiming for a rise to $0.80-0.90 for either side of the strangle. FYI: the December $27.50 call has already more than doubled in value.

Picked on October 25 at $ 25.03
Change since picked: + 1.98
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 64 million

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O'Reilly Auto. - ORLY - close: 30.68 chg: +0.78 stop: n/a

Good news! ORLY has broken out over resistance at the $30.00 mark. Shares added 2.6% and hit new two-month highs. The target on our strangle play was for a rise to $1.20 but recently we've been suggesting that more conservative traders consider exiting around breakeven in the $0.75 region. Well today's rally in the stock price has pushed the November $30 calls (OQR-KF) significantly higher. The high today for the calls was $0.80 and they are currently trading at $0.85bid/$105ask.

Picked on October 09 at $ 28.23
Change since picked: + 2.49
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 513 thousand

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Oshkosh Truck - OSK - close: 43.29 chg: +0.01 stop: n/a

OSK remains range bound in its $41.50-44.00 trading range. If we do not see a breakout one way or the other in the next couple of days we're going to abandon this play early! We are not suggesting new strangles. The options in our suggested strangle are the December $45 call (OSK-LI) and the December $40 put (OSK-XH). We're targeting a rise to $3.00 or more.

Picked on October 30 at $ 42.82
Change since picked: + 0.47
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 405 million

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Verifone Holdings - PAY - cls: 24.99 chg: +0.67 stop: n/a

Wow! PAY continues to rally and shares added another 2.75% today. The stock is very short-term overbought and due for a dip. Friday's move pushed the November strangle to our target and now the November $22.50 calls are well past our target. The January $22.50 calls are climbing as well. Our target for the January strikes is the $4.50 mark. Our hypothetical cost for the January strike was around $2.60. Currently the January $22.50 calls are trading at $3.20bid/$3.80ask.

Picked on October 12 at $ 19.98
Change since picked: + 5.01
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand

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Protein Design Labs - PDLI - cls: 25.89 chg: -0.10 stop: n/a

PDLI continues to look weak but the stock needs to breakdown under its simple 100-dma near 25.45. We are no longer suggesting new strangle positions. The options in our hypothetical strangle are the December $30 calls (PQI-LF) and the December $25 puts (PQI-XE). We'll plan to sell if either side rises to $3.25.

Picked on October 30 at $ 27.70
Change since picked: - 1.77
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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