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Call Updates

Intel Corp. - INTC - close: 25.24 chg: +0.44 stop: 23.45*new*

The gains just keep in coming for INTC. Before the opening bell management at Intel announced the company was raising its cash dividend by 25 percent to 10 cents per share. As if that wasn't enough the company also announced they had raised their stock buy back program from $7.8 billion to $25 billion. The stock gapped higher to open at $25.21, dipped back to $24.92 (almost filling the gap) and then rebounding higher. The low today was almost a perfect bounce from its simple 200-dma. Volume came in well above its daily average. The move over resistance at $25.00 and its 200-dma is technically very bullish but shares still look short-term overbought. If you're looking for a new entry point watch for a potential dip back to the $24.50 region. We are raising our stop loss to $23.45. Our year-end target is the $26.00-26.50 range.

Picked on November 06 at $ 23.99
Change since picked: + 1.25
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 51.6 million

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Legg Mason - LM - cls: 116.00 change: +2.04 stop: 108.75 *new*

Broker-dealer stocks continue to show leadership and the XBD index hit a new all-time high today. Shares of LM added 1.79% and closed over potential round-number resistance at the $115 level. Our target is the $119-120 range but it is tempting to take some profits off the table right here. We are going to raise the stop loss to $108.75.

Picked on November 02 at $111.69
Change since picked: + 4.31
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 904 thousand

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Rockwell Autom. - ROK - cls: 56.20 chg: +0.00 stop: 53.49

The action in ROK was disappointing. Shares dipped toward the $55 level again and traders bought the dip again but in spite of the market's rally ROK could not push higher. The stock closed unchanged. 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: 118.28 chg: -0.25 stop: 121.99

Retail stocks were one of the best performing sectors today but SHLD lagged behind its peers and the rest of the market. The relative weakness today is just another clue that SHLD may breakdown instead of breakout. If we see a close under $115.00 we'll re-evaluate our strategy and consider buying puts. 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

Career Educ. - CECO - cls: 35.96 chg: +1.05 stop: 35.01

Education stocks took advantage of the market's rally today. APOL posted a strong session and CECO added three percent. Shares of CECO are now testing overhead resistance at the $36.00 mark and its simple 50-dma and 200-dma, which have converged near the $36 level. Fortunately, we are still sitting on the sidelines. Our plan was to buy puts if CECO broke down under support at the $33.00 level. Our trigger to open positions is the $32.95 mark. If CECO does trade over the $36.00 level tomorrow we'll drop the play unopened.

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: 76.95 chg: +0.08 stop: n/a

This sideways trading in shares of ABC is the worst thing that can happen for our November strangle (and it's not that great for the December strangle either). Players with the November strangle need to be thinking about trying to recover part of their capital. We're going to lower our target on the November position to $1.25. Our estimated cost was $2.10. 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: + 2.14
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Genentech - DNA - close: 94.88 chg: +1.50 stop: n/a

Biotech giant DNA has broken out from its five-day trading range and through resistance at the $94.00 level. 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. Our estimated cost was around $2.40. Currently the Dec $95 calls are trading at $3.60bid/$3.70ask.

Picked on October 20 at $ 84.83
Change since picked: +10.05
Earnings Date 10/10/05 (confirmed)
Average Daily Volume = 3.9 million

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eBay Inc. - EBAY - close: 43.31 chg: +1.23 stop: n/a

Good news! It looks like EBAY may have finally broke away from the gravitational pull of the $42.00 level. Now we have six trading days before the November options expire. Our adjusted target is at $1.05, which is breakeven, but some traders may want to aim for an exit in the $0.65-0.75 range. 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: + 2.89
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 18.3 million

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Four Seasons - FS - close: 51.41 chg: -5.26 stop: n/a

Ouch! FS reported earnings this morning and the news was not positive. The company missed estimates by 15 cents and revenues came in significantly under estimates too. The stock responded by falling more than 9.2% on big volume. 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: - 3.96
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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General Dynamics - GD - cls: 117.50 chg: +0.30 stop: n/a

GD is still trying to breakout higher from its November trading range. That's bad news for us as we only have six trading days left before November options expire. We recently adjusted our target for the strangle from $4.00 to breakeven at $2.00. Now we're thinking it may be a good idea aim for a move into the $1.25-1.50 range just to rescue some capital. 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: - 2.09
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Harman Intl - HAR - cls: 104.19 chg: +1.75 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: + 3.40
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 739 thousand

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Hutchinson Tech. - HTCH - cls: 25.83 chg: +0.27 stop: n/a

HTCH did manage a decent bounce from the $25.00 level today but 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 and if HTCH doesn't breakout from this consolidation shortly we may exit early!

Picked on October 26 at $ 24.89
Change since picked: + 0.94
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 666 thousand

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Inamed Corp. - IMDC - close: 75.27 change: +0.88 stop: n/a

IMDC bounced back after two days of profit taking. 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: + 4.62
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 533 thousand

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Kos Pharma - KOSP - close: 58.59 chg: +1.62 stop: n/a

There are no surprises here. We expected the bounce from the 200-dma to continue today. Watch for the $60 level to act as round number resistance. There are only six trading days 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: - 1.21
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 460 thousand

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Lear Corp - LEA - close: 27.78 chg: -0.78 stop: n/a

Another down day for GM helped push LEA to another loss. LEA lost 2.7% on rising volume and its MACD just produced a new sell signal. We are no longer suggesting new strangle positions. 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: - 2.46
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 1.8 million

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Lowes Cos. - LOW - close: 61.00 chg: +0.67 stop: n/a

LOW is currently outside our suggested entry window of $60.50-59.50 but if you didn't take advantage of the entry point today odds are we may see LOW dip back toward the $60 level before its earnings report on November 14th. The options in our suggested strangle were the December $65 calls (LOW-LM) and the December $55 puts (LOW-XK). We are aiming for a rise to $2.40 or higher on the strangle.

Picked on November 09 at $ 60.33
Change since picked: + 0.67
Earnings Date 11/14/05 (confirmed)
Average Daily Volume = 4.3 million

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Loews - LTR - close: 96.41 change: +0.94 close: n/a

LTR continued to display relative strength and closed at a new all-time high today. 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: + 6.47
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 602 thousand

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Microsoft - MSFT - close: 27.09 change: +0.13 stop: n/a

MSFT experienced a little bit of profit taking this morning but bulls were quick to buy the dip. 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: + 2.06
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 64 million

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O'Reilly Auto. - ORLY - close: 30.76 chg: +0.24 stop: n/a

ORLY is still looking strong with another rebound from the $30 region. 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 $0.75bid/$1.00ask.

Picked on October 09 at $ 28.23
Change since picked: + 2.55
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 513 thousand

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Verifone Holdings - PAY - cls: 24.40 chg: +0.05 stop: n/a

We see no changes from our previous updates on PAY. 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: + 4.42
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand

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Protein Design Labs - PDLI - cls: 25.70 chg: +0.09 stop: n/a

PDLI broke down under its simple 100-dma intraday but the market rally helped it push all the way back and into the green. We would not be surprised to see PDLI bounce back toward the $26.75-27.00 range before continuing lower again. 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: - 2.00
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million

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Spectrum Brands - SPC - close: 18.00 change: -2.28 stop: n/a

SPC reported earnings this morning and while the recent quarter was inline with estimates the company warned going forward. The stock reacted by gapping down and closing for an 11% loss on big volume. Its MACD has now produced a new sell signal. 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: - 2.63
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 576 thousand
 

Dropped Calls

None
 

Dropped Puts

Bard C.R.- BCR - close: 64.02 change: +1.03 stop: 63.55

The waiting is over. Today's market rally gave BCR a nudge higher and the stock broke out from its narrow trading range. We were stopped out at $63.55.

Picked on October 26 at $ 61.70
Change since picked: + 2.32
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 745 thousand
 

Dropped Strangles

None
 

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