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Call Updates

Amerada Hess - AHC - close: 127.98 chg: -0.51 stop: 121.49

The oil stocks turned lower today after crude oil prices spiked lower late this afternoon. Yet shares of AHC held up relatively well considering yesterday's strong gain and that fact that J.P.Morgan downgraded the entire oil sector from "overweight" to "neutral" this morning. This remains a more aggressive, higher-risk play, but we remain bullish as long as AHC trades over the $125 level. More nimble traders can wait and watch for signs of a bounce from the $125-126 region as a new entry point. Our eight week target is the $139.85-140.00 range.

Picked on November 16 at $128.49
Change since picked: - 0.51
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Intl. Bus. Mach. - IBM - cls: 86.89 chg: +0.35 stop: 82.95

Technology stocks were a real leadership group today and the GHA hardware sector added more than two percent. Shares of IBM continued to rally posting its third gain in a row. If you're looking for a new entry point you might want to wait for a dip back toward the $85.00-85.50 region but there's no guarantee it will occur. Our target is the $89.90-90.00 range by year-end. We are going to raise the stop loss to $82.95.

Picked on November 15 at $ 85.25
Change since picked: + 1.64
Earnings Date 01/16/06 (unconfirmed)
Average Daily Volume = 5.6 million

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Intel Corp. - INTC - close: 25.11 chg: +0.24 stop: 23.45

Semiconductor stocks also joined the technology rally today but the gains in Intel and the rest of the sector lagged behind the hardware, Internet, and networking stocks. Our year-end target is the $26.00-26.50 range.

Picked on November 06 at $ 23.99
Change since picked: + 1.12
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 51.6 million

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NovAtel Inc. - NGPS - close: 29.21 chg: +0.47 stop: 27.75

NGPS is starting to show a little bit of life today but the stock remains under resistance at the $30.00 mark. Our strategy involves a trigger to buy calls at $30.45 over last week's high. If triggered we'll target a move into the $35.00-36.00 range.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 292 thousand

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Rockwell Autom. - ROK - cls: 57.39 chg: +0.49 stop: 53.90

ROK posted another new seven-month high today. We see no changes from our previous updates. We are targeting a move into the $61-62 range.

Picked on November 03 at $ 55.90
Change since picked: + 1.49
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 804 thousand
 

Put Updates

None
 

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: 78.00 chg: +0.70 stop: n/a

ABC is creeping higher and looks poised to breakout over short-term resistance at the $78.00 level but it won't help our November strangle. However, it is good news for our December strangle. We are not suggesting new strangle positions at this time. The December strangle still has less than five weeks left with an estimated cost of $2.80 using the December $80 calls (ABC-LP) and the December $70 puts (ABC-XN). Our target for the December strangle is $5.00.

Picked on October 16 at $ 74.81
Change since picked: + 3.19
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Amer. Eagle Out. - AEOS - cls: 23.81 chg: +0.31 stop: n/a

AEOS trended higher today after announcing a new 4.5 million share buy back program today. The company said they had completed their previous 6 million share buy back. The stock remains under short-term resistance at the $24.00 level. We are no longer suggesting new strangle positions. The current strangle has an estimated cost of $2.35 with the January $27.50 calls (AQU-AY) and the January $22.50 puts (AQU-MX). We are targeting a rise to $4.70.

Picked on November 13 at $ 25.47
Change since picked: - 1.66
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 61.86 chg: +0.27 stop: n/a

It was a relatively quiet session for ANF. The stock dipped back toward the $60 region but bulls were there to buy the dip at $60.75. We see no changes from our previous updates. We are not suggesting new strangle positions at this time. The options in our strangle are the January $65 calls (ANF-AM) and the January $55 puts (ANF-MK). Our estimated cost was $5.15. We're looking for a rise to $8.50.

Picked on November 13 at $ 59.67
Change since picked: + 2.19
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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D.R.Horton - DHI - close: 34.96 chg: +1.89 stop: n/a

Homebuilder stocks saw a very strong surge today despite news that housing starts fell under analysts expectations today. Shares of DHI added 5.7% to out perform many of its peers. The gain today is a breakout over DHI's 50-dma and 200-dma. We are not suggesting new strangle positions at this time. Our strangle strategy involves the January $35 calls (DHI-AG) and the January $30 puts (DHI-MF). Our estimated cost was $3.15. We're aiming for a rise to $6.00.

Picked on November 13 at $ 32.56
Change since picked: + 2.40
Earnings Date 11/16/05 (confirmed)
Average Daily Volume = 3.2 million

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eBay Inc. - EBAY - close: 43.80 chg: +1.26 stop: n/a

The Internet sector turned in a strong day with the INX Internet index rising 2.3%. Shares of EBAY helped lead the move with its own 2.9% rally but it's too little too late for our November strangle - only a move over the $45 level can help now. Our estimated cost was about $1.05 for the November $35 puts (XBA-WG) and the November $45 calls (XBA-KI).

Picked on October 18 at $ 40.42
Change since picked: + 3.38
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 18.3 million

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Four Seasons - FS - close: 50.28 chg: -1.31 stop: n/a

A downgrade for FS helped push the stock lower, which lost 2.5% on above average volume. That's good news for the put side of our strangle play. We are not suggesting new strangles at this time. The options in our strangle were the January $60 calls (FS-AL) and the January $50 puts (FS-MJ). Our estimated cost was about $2.60. We're aiming for a rise to $5.00 or more.

Picked on November 08 at $ 55.37
Change since picked: - 5.09
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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General Dynamics - GD - cls: 118.10 chg: +1.74 stop: n/a

The market rally helped push GD higher and the stock has broken out over its simple 50-dma. This looks like the final death knell to our November strangle. The options in our strangle are the November $125 calls (GD-KE) and the November $115 puts (GD-WC). Our estimated cost was about $2.00.

Picked on October 09 at $119.59
Change since picked: - 1.49
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 713 thousand

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Harman Intl - HAR - cls: 99.63 chg: +1.14 stop: n/a

There is no change from our previous update on HAR. HAR continues to trade inside its $96-105 trading range and with only one day left before November options expire this looks like a bust. 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: - 1.19
Earnings Date 10/19/05 (confirmed)
Average Daily Volume = 739 thousand

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Hutchinson Tech. - HTCH - cls: 25.14 chg: +0.65 stop: n/a

If HTCH doesn't make a significant move in the next several days we may exit early. The stock has rallied back to where we started and is throwing off mixed signals with a bearish MACD and a bullish RSI indicator. We are not suggesting new strangles at this time. The options in our strangle were the January $30 calls (UTQ-AF) and the January $20 puts (UTQ-MD). Our estimated cost was $1.65. We have adjusted our initial target from $3.00 to breakeven at $1.65 since the post-earnings reaction was not as big as expected.

Picked on October 26 at $ 24.89
Change since picked: + 0.25
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 666 thousand

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Kos Pharma - KOSP - close: 61.00 chg: +0.11 stop: n/a

It's just about game over for our November strangle on KOSP. The options in our strangle were the November $65 calls (KQW-KM) and the November $55 puts (KQW-WK).

Picked on October 20 at $ 59.80
Change since picked: + 1.20
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 460 thousand

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Lear Corp - LEA - close: 28.08 chg: +0.28 stop: n/a

LEA managed a one-percent bounce following a big rally in General Motors (GM, +6.2%). The trend for both stocks remains bearish. 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: - 2.16
Earnings Date 10/26/05 (confirmed)
Average Daily Volume = 1.8 million

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Loews - LTR - close: 97.74 change: +1.37 close: n/a

LTR rallied higher with a new closing high today. The stock looks poised to make a run for the $100 level. The options in our strategy are the December $95 calls (LTR-LS) and the December $85 puts (LTR-XQ). Our estimated cost is about $3.05. We recently adjusted our target to be a rise to $5.00 or more in either side of the strangle or if shares of LTR hit $99.90 or more.

Picked on October 23 at $ 89.94
Change since picked: + 7.80
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 602 thousand

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Verifone Holdings - PAY - cls: 23.67 chg: +0.55 stop: n/a

PAY continued to dip this morning but traders bought the dip near $22.00 and its simple and exponential 200-dma's. If you like to trade stocks this looks like a bullish entry point. We are not suggesting new strangle positions at this time. We are targeting a rise to $4.50 for our January strangle.

Picked on October 12 at $ 19.98
Change since picked: + 3.69
Earnings Date 11/18/05 (unconfirmed)
Average Daily Volume = 259 thousand

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Protein Design Labs - PDLI - cls: 26.40 chg: +0.63 stop: n/a

Biotech stocks rallied with the rest of the market and PDLI pushed higher from its recent consolidation under the $26 level. We've been telling readers to expect a bounce toward $26.50-27.00. Remember, with a strangle, we don't care what direction the stock moves as long as the move is big enough to make the strangle profitable. We have a little more than four weeks before December options expire. 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: - 1.30
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million

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Spectrum Brands - SPC - close: 17.60 change: +0.85 stop: n/a

Market strength also fueled the oversold bounce in SPC. We are not suggesting new strangle positions. Our estimated cost for this strangle was $1.25. 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: - 2.84
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 576 thousand
 

Dropped Calls

Legg Mason - LM - cls: 120.58 change: +4.73 stop: 109.95

Target achieved. The broker-dealer stocks turned in another big session on Thursday as the XBD index added 2.29%. Shares of LM helped power the group higher with a big 4% gain and a new high over the $120 level. Our target was the $119-120 range.

Picked on November 02 at $111.69
Change since picked: + 8.89
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 904 thousand
 

Dropped Puts

None
 

Dropped Strangles

O'Reilly Auto. - ORLY - close: 30.67 chg: +1.07 stop: n/a

Wow! The market strength today revived the rally in shares of ORLY and the stock is back above the $30.00 mark. This is good news for the call side of our November strangle. The November $30 calls (OQR-KF) are now trading at $0.60bid/0.65ask. Our estimated cost was $0.75. We would exit immediately. More aggressive traders can hold out for more in hopes that the rally continues tomorrow. ORLY looks like it has short-term resistance at the $31.00 level so nimble traders might want to try and exit their calls as ORLY nears $31.00.

Picked on October 09 at $ 28.23
Change since picked: + 2.44
Earnings Date 10/25/05 (confirmed)
Average Daily Volume = 513 thousand
 

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