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Call Updates

Alcon - ACL - close: 145.67 change: +0.67 stop: 139.90

ACL reversed some early morning weakness and closed at new December highs above the $145.00 level. This could be used as another bullish entry point. We plan to ride ACL up to its early February earnings report. Our target is the $154-155 range.

Picked on December 11 at $144.60
Change since picked: + 1.07
Earnings Date 02/08/06 (unconfirmed)
Average Daily Volume = 524 thousand

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Apache - APA - close: 72.16 change: +1.03 stop: 65.95

Oil stocks turned in another strong day after COP confirmed its bid for BR. Crude oil was also higher intraday but pared its gains by the closing bell. The action in APA looks like a short-term top so readers can watch for a dip back toward the $71.00-70.00 range before it moves higher again. Such a dip could be used as a new bullish entry point. Our end of January target is the $76.00-77.00 range. The Point & Figure chart points to an $83 target.

Picked on December 08 at $ 70.98
Change since picked: + 1.18
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Constellation Energy - CEG - cls: 56.27 chg: +0.86 stop: 53.39

CEG is showing renewed strength with a rebound off the simple 200-dma and a new six-week closing high. The stock looks poised to breakout over its 100-dma at 56.64. Our target is a run into the $60-62 range. FYI: the UTY utility index rebounded off its 10-dma and 100-dma to close at a new eight-week high.

Picked on December 11 at $ 55.60
Change since picked: + 0.67
Earnings Date 01/27/06 (unconfirmed)
Average Daily Volume = 947 thousand

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Dominion Res. - D - close: 80.00 chg: +1.05 stop: 74.75

Shares of D are also showing lots of relative strength. A good day in the utilities and a new all-time high in natural gas have pushed D to the $80.00 level. Our target is the $84.50-85.00 range compared to the P&F chart, which points to a $92 target.

Picked on November 27 at $ 78.24
Change since picked: + 1.76
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 1.8 million

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FMC Corp. - FMC - close: 54.35 chg: +0.55 stop: 51.95

FMC is actually showing more strength than we expected. The stock bounced higher again but it still stuck under resistance at the 200-dma (54.72), the $55.00 level, and its 100-dma (55.26). Short-term technical oscillators like the RSI and stochastics are starting to look positive again. Depending on your trading style you can look for a new bullish entry point on a move over $54.50, which would be a minor breakout over its one-week consolidation; a move over the 200-dma, or a move over its 100-dma and the December high ($55.41). The Point & Figure chart points to a $62 target. We are targeting a run into the $59.85-60.00 range.

Picked on December 01 at $ 55.04
Change since picked: - 0.69
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 270 thousand

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Femsa Fomento - FMX - close: 68.18 chg: -0.55 stop: 67.75

FMX is still churning sideways inside its trading range. If we don't see a breakout higher by the end of the week we'll probably drop FMX as a candidate. Our strategy suggests going long calls if FMX trades at or above our trigger at $70.65. If we are triggered we'll target a run into the $74.75-75.00 range. The P&F chart points to an $81 target.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 308 thousand

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Hydril - HYDL - close: 69.70 change: -0.63 stop: 65.95

We don't see any change from our previous update. The play is open after yesterday's spike higher. A potential problem is the short-term tick lower in the technical oscillators, which would tend to suggest the stock is due for a consolidation lower. If that occurs we'd look for the $67.50-68.00 range to offer immediate support. More conservative traders may want to wait for another move over $71.00 or 71.50 before initiating positions. Our target is the $78.00-80.00 range before HYDL's January earnings report, which we do not want to hold over.

Picked on December 12 at $ 71.01
Change since picked: - 1.31
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 263 thousand

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Kerr Mcgee - KMG - close: 94.60 chg: +0.87 stop: 88.99 *new*

KMG benefited from another positive day for energy stocks. However, today's action looks like a short-term top. Watch for a dip back toward $93.25 or even the 10-dma at 91.40. A bounce from either level could be used as a new bullish entry point. We're going to raise our stop loss to $88.99. Our mid January target is the $98.50-100 range.

Picked on December 02 at $ 90.26
Change since picked: + 4.34
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Kinder Morgan - KMI - close: 93.88 chg: +1.15 stop: 87.45

Natural gas provider KMI issued its 2006 forecast today and its guidance was above Wall Street's expectations. The company also suggested it might raise its cash dividend. The stock did not react as well as we might have expected, especially with natural gas futures soaring to a new all-time high over $15.00. Today's move could be used as a new bullish entry point but conservative traders may not want to initiate plays with KMI under resistance at the $95.00 level. The P&F chart for KMI points to a $104 target. Our target is the $98.50-100 range. We do not want to hold over the mid January earnings report.

Picked on December 02 at $ 92.75
Change since picked: + 1.13
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 749 thousand

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Polaris Ind. - PII - close: 49.78 change: -0.23 stop: 48.49

PII is still struggling to recover from last week's downgrade-induced gap down. Technicals for the stock have turned bearish. We are not suggesting new positions. More conservative traders may want to exit here or try to exit near $51.00, which is short-term resistance at the bottom of the gap down. We're going to keep our target in the $54.00-55.00 range.

Picked on November 21 at $ 48.47
Change since picked: + 1.31
Earnings Date 01/12/06 (unconfirmed)
Average Daily Volume = 467 thousand

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Rockwell Autom. - ROK - cls: 59.93 chg: -0.01 stop: 55.75

ROK is trying very hard to breakout over the $60.00 level but it just doesn't seem to have the momentum. Our target is the $61.00-62.00 range and today's high at $60.43 may be as close as we get. More conservative traders may want to seriously consider exiting right here. We are not suggesting new positions at this time. Our target is the $61-62 range. FYI: the P&F chart points to a $69 target.

Picked on November 03 at $ 55.90
Change since picked: + 4.03
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 804 thousand

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Sunoco Inc. - SUN - close: 83.18 chg: -0.27 stop: 76.45

SUN didn't make much progress today and traded sideways in a $1.50 range. A bounce from the 10-dma (82.28) or the $80.00-81.00 region could be used as a new bullish entry point. The P&F chart for SUN points to a $93 target. Our target is the $89.90-90.00 range.

Picked on December 02 at $ 81.75
Change since picked: + 1.43
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 2.8 million

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Total S.A. - TOT - close: 129.70 change: +1.25 stop: 126.49

News that ConocoPhillips (COP) confirmed its bid for Burlington Resources (BR) gave the oil/energy sector some early strength today. Shares of TOT gapped higher to open at $130.15 and traded to $130.60 before paring its gains. Our trigger to buy calls was at $130.25 so the play is now open. We would probably expect a dip back to $128.50-128.75 to fill this morning's gap before seeing TOT really take off. Aggressive traders can use the dip as a new entry point. More conservative types may want to wait for a move over today's high at $130.60. Our target is the $136.00-137.00 range. Our time frame is before the mid-February earnings report. The P&F chart for TOT points to a $152 target.

Picked on December 13 at $130.25
Change since picked: - 0.55
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 936 thousand

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Tractor Supply - TSCO - cls: 55.03 chg: +1.32 stop: 51.95

TSCO is on the rebound. The stock dipped toward the $53.50 twice today. The second bounce finally got some wind behind it and a surge of volume lent strength to the rally. If TSCO wasn't so close to our $57.00-58.00 target range we'd say this was a new bullish entry point.

Picked on November 30 at $ 52.75
Change since picked: + 2.28
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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Valero Energy - VLO - close: 109.00 chg: +0.55 stop: 99.49

VLO is another energy stock that surged higher through most of the session before pulling back in the last hour of trading. The rally seemed to stall under its November highs near $111.35. This looks like a short-term top and we'd expect a dip (probably toward $107) before VLO attempts to move higher again. The dip can be used as a new bullish entry point. Our target is the September highs at $117.00. Please note that VLO is due to split 2-for-1 on December 16th. That means your option positions will double in number while halving in value. Our post-split target will be $58.50. Our post-split stop loss will be $49.74. FYI: VLO is also a current strangle play in the strangle section.

Picked on December 08 at $106.56
Change since picked: + 2.44
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 9.8 million

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Zimmer Holdings - ZMH - close: 68.80 chg: -0.45 stop: 65.75

ZMH tried to rally higher today but the gains just ran out of steam near $69.85. Hopefully it's just a coincidence that the stock turned lower after announcing a new management structure and organizational changes. Watch for the 10-dma near 67.55 to act as short-term support. Our target is the $74.00-75.00 range under its simple 200-dma.

Picked on December 11 at $ 68.62
Change since picked: + 0.18
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 2.6 million
 

Put Updates

Magna Int. - MGA - close: 68.01 chg: +0.34 stop: 70.31

Shares of GM lost today, down 3.25%, following yesterday's credit downgrade from S&P. The downgrade seemed to spark new fears over potential bankruptcy for the car maker. Yet this news in GM did nothing to stop the oversold bounce in shares of MGA. We would keep a close eye on MGA's overhead resistance at the simple 50-dma near $68.66. A failed rally under the 50-dma could be used as a new bearish entry point in MGA. Our target is the $63-62 range.

Picked on December 04 at $ 68.14
Change since picked: - 0.13
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 318 thousand

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Netflix - NFLX - close: 24.05 chg: -1.05 stop: 28.15

Good news. The afternoon bounce from yesterday failed to follow through today. The stock turned lower at the $25.00 level and its 100-dma. This relative weakness really increases the odds that NFLX will hit our target at $22.50. We are not suggesting new positions at this time. We do not want to hold over the mid January earnings report.

Picked on December 09 at $ 25.99
Change since picked: - 1.94
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 1.4 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: 81.50 chg: +0.07 stop: n/a

There was virtually no change in ABC on Tuesday. We don't see any change from our weekend update. We have three days left before December options expire. We are not suggesting new positions. Our estimated cost for our strangle is $2.80. For the last couple of months we have been targeting a rise to $5.00 for the strangle but traders may want to adjust their target to something lower. We're going to adjust our target to $4.25. Currently the December $80 calls (ABC-LP) are trading at $1.60bid/$1.75ask.

Picked on October 16 at $ 74.81
Change since picked: + 6.62
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Amer. Eagle Out. - AEOS - cls: 21.75 chg: +0.47 stop: n/a

Negative comments from electronics retailer Best Buy (BBY) had no affect on apparel retailer AEOS. Shares of AEOS continued to bounce and added 2.2%. The stock is now challenging short-term overhead resistance near $22.00. We're not suggesting new plays. 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. FYI: currently the January $22.50 puts are trading at $1.55bid/$1.65ask.

Picked on November 13 at $ 25.47
Change since picked: - 3.72
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 62.72 chg: +0.02 stop: n/a

ANF reversed early weakness this morning but after recovering from the morning downdraft the stock spent the rest of the session trading sideways. We have about six weeks to go before January options expire. 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. Right now our target may be out of reach. It really depends on how ANF performs during any Santa Claus rally should one appear.

Picked on November 13 at $ 59.67
Change since picked: + 3.05
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 45.03 chg: +0.21 stop: n/a

The sideways consolidation is continuing to narrow. That could be good news. Imagine the stock price like a spring. The more tightly the market winds it the bigger the move when it finally breaks out. We're suggesting that readers consider launching new strangles in the $44.50-45.50 entry window. We're suggesting the January $50 call and the January $40 put. Our estimated cost is $3.25. We're aiming for a rise to $5.50. Remember we have about six weeks left before January options expire.

Picked on December 04 at $ 45.43
Change since picked: - 0.40
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Chicago Merc. Exchg. - CME - cls: 369.25 chg: +1.85 stop: n/a

We don't see any changes from our previous update. We are not suggesting new strangle positions at this time. Our current play involves the January $400 calls (CMJ-AK) and the January $350 puts (CMJ-MA). Our estimated cost was $26.70. We're aiming for a rise to $40.00 in the strangle before January options expire.

Picked on November 20 at $375.90
Change since picked: - 6.65
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 36.81 chg: +0.72 stop: n/a

DHI looks bullish. The stock added another 1.99% to breakout through the top of what looks like a bull flag pattern. This actually looks like a tempting entry point to buy January or February calls. We are not suggesting new strangles in DHI at this time. Our current play 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. FYI: the DHI-AG calls are currently trading at $2.85bid/$3.00ask.

Picked on November 13 at $ 32.56
Change since picked: + 4.25
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 48.48 chg: -0.85 stop: n/a

FS continues to show relative weakness and the recent failed rally at the $50 level is good news. 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. FYI: the FS-MJ puts are trading at $2.60bid/$2.75ask.

Picked on November 08 at $ 55.37
Change since picked: - 6.89
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 28.61 chg: +0.23 stop: n/a

LEA is still trying to bounce in spite of renewed fears for GM. 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). Our estimated cost was $1.60. We are targeting a rise to $3.20 or more.

Picked on November 06 at $ 30.24
Change since picked: - 1.63
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Loews - LTR - close: 96.38 change: +0.08 close: n/a

We only have three days left before December options expire. Our Dec. $95 calls are in the money but we need to see LTR make a run for the $100 level if we're going to be profitable. More conservative traders may want to exit early to protect/salvage their capital. We're not suggesting new plays. 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 plan to exit if our strangle rises to $5.00 or if shares of LTR hit 99.90. Currently the LTR-LS calls are trading at $1.65bid/$1.85ask. The high today was $2.40.

Picked on October 23 at $ 89.94
Change since picked: + 6.44
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 602 thousand

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Verifone Holdings - PAY - cls: 23.70 chg: +0.08 stop: n/a

We don't see any change from our weekend update on PAY. We're not suggesting new positions. Our current strangle involves the January $22.50 calls (PAY-AX) and the January $17.50 puts (PAY-MW). Our estimated cost was $2.60 and we're aiming for a rise to $4.50 or more. Currently the PAY-AX calls are trading at $1.95bid/$2.35ask.

Picked on October 12 at $ 19.98
Change since picked: + 3.72
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Protein Design Labs - PDLI - cls: 28.35 chg: +0.45 stop: n/a

We do not see any change from our weekend update. We have four days left before December options expire. The options in our strangle are the December $30 calls (PQI-LF) and the December $25 puts (PQI-XE). Our estimated cost was at $1.80. We have adjusted our target to breakeven at $1.80.

Picked on October 30 at $ 27.70
Change since picked: + 0.65
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million

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Spectrum Brands - SPC - close: 18.73 change: -0.07 stop: n/a

We don't see any change from our weekend update on SPC. We have three days left before December options expire. More conservative traders may want to plan an exit near breakeven assuming SPC provides another move lower. We're going to follow our own suggestion and adjust our target to $1.25. We are not suggesting new strangle positions at this time. 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).

Picked on November 08 at $ 20.63
Change since picked: - 1.90
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 576 thousand

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Questar Corp. - STR - close: 80.85 chg: +1.38 stop: n/a

Natural gas futures spiked and closed at new all-time highs today. This helped fuel a bullish breakout in STR over resistance at the $80.00 mark. There are about six weeks left before January options expire. We are no longer suggesting strangle positions in the stock. Our strangle involves the January $80 calls (STR-AP) and the January $70 puts (STR-MN). Our estimated cost was $5.10 and we're aiming for a rise to $9.50 or more.

Picked on November 20 at $ 76.25
Change since picked: + 4.60
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 51.69 chg: -0.06 stop: n/a

We don't see any change from our previous updates. We are not suggesting new strangle positions. The options in our strangle are the January $55 calls (TXI-AK) and the January $45 puts (TXI-MI). Our estimated cost is $2.70. We're looking for a rise to $5.00 or more.

Picked on November 27 at $ 49.57
Change since picked: + 2.12
Earnings Date 12/15/05 (unconfirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 109.00 chg: +0.55 stop: n/a

VLO hit a new four-week high but stalled under its October peak. We are not suggesting new strangle plays. Our current play involves the January $110 calls (VLO-AB) and the January $90 puts (VLO-MR). Our estimated cost was $5.85 and we're aiming for a rise to $9.50. VLO is due to split 2-for-1 on December 16th so our post-split target will be a rise to $4.75.

Picked on November 21 at $101.00
Change since picked: + 8.00
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

None
 

Dropped Puts

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Dropped Strangles

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