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Call Updates

Intel Corp. - INTC - close: 24.80 chg: +0.25 stop: 22.75

INTC continued to climb on Wednesday marking its sixth gain in a row. The stock is nearing resistance at the $25.00 level and its simple 200-dma currently at 24.92. We do expect shares to pull back after testing overhead resistance. Traders looking for a new entry point can wait for the pull back. The $24.00 level or its simple 50-dma (24.16) should offer short-term support and a good spot to look for an entry point. Our year-end target is the $26.00-26.50 range.

Picked on November 06 at $ 23.99
Change since picked: + 0.81
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 51.6 million

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Legg Mason - LM - cls: 113.96 change: +2.33 stop: 106.95

The broker-dealer stocks continued to climb and LM hit a new three-month high with today's 2% gain. We see no changes from our previous updates. The $110 level should act as support. Our seven-week target is the $119-120 range.

Picked on November 02 at $111.69
Change since picked: + 2.27
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 904 thousand

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Rockwell Autom. - ROK - cls: 56.20 chg: +0.57 stop: 53.49

ROK tested previous resistance, now new support, at the $55.00 level again today. The stock dipped to the $55 region this morning but bulls were waiting to buy the dip. We remain bullish on the stock with shares over $55 and today's bounce does look like a new entry point. However, if you think the major indices are due for another pull back you might want to wait a day or two before initiating new positions in ROK. Our seven-week target is the $61.00-62.00 range.

Picked on November 03 at $ 55.90
Change since picked: + 0.30
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 804 thousand

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Sears Holding - SHLD - cls: 118.53 chg: -0.89 stop: 121.99

SHLD is under performing both the broader markets and the retail sector. Shares have broken under the $120 level today and the afternoon bounce failed to push back over the $120 mark. We're starting to think SHLD might just break down from this trading range instead of breakout. If we see a close under $115.00 we'll re-evaluate our strategy. Currently our suggested trigger to buy calls is at $128.51.

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: 62.99 change: +0.14 stop: 63.55

Honestly, we do not know what's going on with shares of BCR. The stock has been trading in a very narrow range for the last five days. If you know of some future event that investors might be waiting on that could affect shares of BCR please email us (support@optioninvestor.com). There could be some sort of upcoming FDA decision on a product for BCR but we can't find anything to suggest this. Volume has been significantly under the daily average. If we didn't know better it looks like trading has stalled as investors wait for the company's earnings report. Yet the company reported earnings back on Oct. 18th. This sort of consolidation makes us nervous. Normally we'd look for the prevailing (bearish) trend to resume. However more conservative traders might just want to bail out now and escape the suspense. We are not suggesting new plays and if we don't see a move soon we'll exit ourselves.

Picked on October 26 at $ 61.70
Change since picked: + 1.29
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 745 thousand

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Career Educ. - CECO - cls: 34.91 chg: -0.21 stop: 35.01

Rival APOL had a strong session today but it failed to rub off on shares of CECO. We remain bearish on CECO and the recent spike could just be a new failed rally under the simple 50 and 200-dma's. However, we are going to stick to our game plan and that is to wait for 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: 76.87 chg: -0.07 stop: n/a

We see no changes from our weekend update on ABC. There are less than 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: + 2.06
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Genentech - DNA - close: 93.38 chg: -0.52 stop: n/a

DNA continues to consolidate under resistance at the $94.00 level. 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: + 8.55
Earnings Date 10/10/05 (confirmed)
Average Daily Volume = 3.9 million

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eBay Inc. - EBAY - close: 42.08 chg: -0.22 stop: n/a

We are quickly running out of time before the November options expire. The game plan here is to try and recover capital. 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: + 1.66
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 18.3 million

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Four Seasons - FS - close: 56.67 chg: +1.30 stop: n/a

Wow! FS did not trade in our suggested entry window (55.50-54.50) very long but we did have an opportunity early this morning. The stock quickly shot higher and closed the session near its simple 50-dma. Tomorrow the company is expected to report earnings before the opening bell. Estimates are at 37 cents a share. We are not suggesting new strangle positions at this time. The options in our suggested strangle were the January $60 calls (FS-AL) and the January $50 puts (FS-MJ). Our estimated cost was around $2.60. We are targeting a rise to $5.00 or more.

Picked on November 08 at $ 55.37
Change since picked: + 1.30
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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General Dynamics - GD - cls: 117.20 chg: -0.06 stop: n/a

GD acts like it is trying to breakout to the upside from its recent trading range. Unfortunately for shareholders the stock has resistance at its 50-dma (117.46) and the $118 level. A move higher would also be bad news for us unless the move was significant. We're running out of time on the November options. We recently adjusted 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: - 2.39
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Harman Intl - HAR - cls: 102.44 chg: -0.61 stop: n/a

We see no changes from our previous updates on HAR. 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: + 1.65
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 739 thousand

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Hutchinson Tech. - HTCH - cls: 25.56 chg: +0.09 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: + 0.67
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 666 thousand

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Inamed Corp. - IMDC - close: 74.43 change: -0.94 stop: n/a

IMDC is still seeing profit taking from its early November rally. It looks like the stock will retest the 50-dma near 73.50 and potentially the $72 level. 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.

Picked on October 30 at $ 70.63
Change since picked: + 3.74
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 533 thousand

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Kos Pharma - KOSP - close: 56.97 chg: -0.47 stop: n/a

KOSP continued to decline and dipped to technical support at the 200-dma near 55.60 before rebounding. We are not surprised that shares bounced from this level of technical support. The question is where will the bounce fail? The $60.00 level should act as overhead resistance. 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: - 2.83
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 460 thousand

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Lear Corp - LEA - close: 28.56 chg: -1.28 stop: n/a

Carmakers suffered a bearish day on Wednesday and shares of LEA lost more than 4.2% on strong volume. Today's move pushed LEA outside our suggested entry window so we're no longer suggesting new strangles. The options in our strangle are the January $35 calls (LEA-AG) and the January $25 puts (LEA-ME). We are targeting a rise to $3.20 or more.

Picked on November 06 at $ 30.24
Change since picked: - 1.68
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 1.8 million

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Loews - LTR - close: 95.47 change: -0.04 close: n/a

LTR hit a new high today but after the bombing news hit the wires this afternoon shares of LTR pared their gains. 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: + 5.53
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 602 thousand

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Microsoft - MSFT - close: 26.96 change: -0.09 stop: n/a

MSFT was way overdue for some profit taking and we're surprised that the stock didn't pull back more deeply today. Look for shares to retrace some of their steps before resuming its bullish trend. 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.

Picked on October 25 at $ 25.03
Change since picked: + 1.93
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 64 million

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O'Reilly Auto. - ORLY - close: 30.50 chg: +0.14 stop: n/a

ORLY pulled back to $29.82 this morning but traders bought the dip again. 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. The call side of our November strangle is the November $30 call (OQR-KF). Currently these calls are trading at $0.65bid/$0.85ask.

Picked on October 09 at $ 28.23
Change since picked: + 2.31
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 513 thousand

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Verifone Holdings - PAY - cls: 24.35 chg: -0.46 stop: n/a

There are no surprises here. We've been telling readers that PAY was overbought and due for some consolidation. The $23.00 level might act as short-term support or the 10-dma near $23.70. We see no changes from our previous updates. The January $22.50 calls (PAY-AX) appear to be the winning side of our January strangle but our target is for a rise to $4.50.

Picked on October 12 at $ 19.98
Change since picked: + 4.37
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand

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Protein Design Labs - PDLI - cls: 25.61 chg: -0.13 stop: n/a

PDLI is inching closer to a breakdown under technical support at its simple 100-dma. 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: - 2.09
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million

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Spectrum Brands - SPC - close: 20.28 change: -0.35 stop: n/a

Tomorrow could be a big day for SPC. The company is expected to report earnings before the opening bell. Wall Street is looking for earnings of $0.13 a share. We are no longer suggesting new strangle positions. The options in our suggested strangle are the December $22.50 calls (SPC-LX) and the December $17.50 puts (SPC-XW). We are aiming for a rise to $2.50 or more.

Picked on November 08 at $ 20.63
Change since picked: - 0.35
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 576 thousand
 

Dropped Calls

Peabody Energy - BTU - close: 77.70 chg: -3.28 stop: 76.99

It's time to go! BTU displayed relative weakness today with a breakdown under the $80.00 level and its simple 50-dma (78.07). Technicals have turned sour and its MACD indicator is nearing a new sell signal. We are going to exit now before BTU hits our stop loss.

Picked on November 06 at $ 81.36
Change since picked: - 3.66
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 2.6 million
 

Dropped Puts

None
 

Dropped Strangles

Legg Mason - LM - cls: 113.96 chg: +2.33 stop: n/a

Target achieved! It took a lot longer than we expected but our strangle finally hit our target price of $5.00. LM's two-percent gain today helped push the November $110 calls (LM-KB) to a high today of $5.55. A move to $5.00 represents a 108% rise in value from when we launched the play back in October.

Picked on October 12 at $102.59
Change since picked: +11.37
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 966 thousand

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Oshkosh Truck - OSK - close: 43.00 chg: -0.00 stop: n/a

On a day that automakers turned lower shares of OSK failed to move at all. Therein lies the problem. Lack of movement is the deathknell for a strangle so we're going to try and exit early to salvage our capital. More aggressive players might want to think about keeping the play open. We launched the play in late October with an estimated cost of $1.75. If we could exit now the options should sell for around $1.10. The options in our suggested strangle are the December $45 call (OSK-LI) and the December $40 put (OSK-XH).

Picked on October 30 at $ 42.82
Change since picked: + 0.18
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 405 million
 

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