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Call Updates

Alcon - ACL - close: 141.45 change: -4.22 stop: 139.90

Wow! ACL displayed some volatility today. The stock immediately spiked lower at the open this morning and continued to drift lower throughout the entire session. We could not find any news or catalyst to explain the $4.00 decline. A bounce from the $140 level could be used as a new bullish entry point but we would be hesitant to initiate new positions with this sort of unexplained decline. More conservative traders may want to consider tightening their stops or exiting early.

Picked on December 11 at $144.60
Change since picked: - 3.15
Earnings Date 02/08/06 (unconfirmed)
Average Daily Volume = 524 thousand

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Apache - APA - close: 73.34 change: +1.18 stop: 65.95

Oil stocks continued higher on Wednesday despite a minor pull back in crude oil prices today. APA added 1.6% after rebounding from the $71.60 level this morning. It may be worth noting that some market pundits are labeling APA a potential takeover target and that could keep a bullish bias in the stock, especially after this week's COP/BR merger announcement. Our end of January target for APA 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: + 2.36
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Dominion Res. - D - close: 80.91 chg: +0.91 stop: 74.75

D continues to rally and today's gain pushed it above round-number resistance at the $80.00 level. It didn't hurt that the M&A activity has spread to the utility sector with today's news that FPL is in talks to buy CEG. Our target for D 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: + 2.67
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 1.8 million

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FMC Corp. - FMC - close: 53.76 chg: -0.59 stop: 51.95

FMC continues to struggle under technical resistance at the 200-dma. This is having a negative impact on its technical picture. More conservative traders may want to exit early or tighten their stops. We would not suggest new positions until FMC traded over $55.00 and its 100-dma (55.26). 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: - 1.28
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 270 thousand

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Femsa Fomento - FMX - close: 69.36 chg: +1.18 stop: 67.75

FMX is showing some strength again and looks poised to try another breakout attempt at the $70 level. 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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Garmin ltd - GRMN - close: 63.49 change: -0.05 stop: 57.90

GRMN dipped to $62.40 before rebounding quickly this morning. We mentioned that more patient traders may want to wait for a dip toward $62. This morning may have been it. However, we suspect GRMN may give us another chance to buy a dip toward $62. As you know there aren't any guarantees and the stock could just keep climbing following Tuesday's bullish breakout. Our mid-January target is the $69.00-70.00 range. We do not want to hold over the January earnings report.

Picked on December 13 at $ 63.54
Change since picked: - 0.05
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Hydril - HYDL - close: 70.68 change: +0.98 stop: 65.95

HYDL is looking a lot stronger today with a 1.4% gain and another move over the $70 level. We would use this as a new bullish entry point but it's perfectly fine to wait for another move over the $71.00 or $71.50 levels 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: - 0.33
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 263 thousand

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Kerr Mcgee - KMG - close: 95.05 chg: +0.45 stop: 88.99

KMG continues to climb in a narrow rising channel. The oil stocks added another day of gains despite a pull back in crude prices. Watch for a dip back toward $93.25 or even the 10-dma at 91.68. A bounce from either level could be used as a new bullish entry point. Our mid January target is the $98.50-100 range.

Picked on December 02 at $ 90.26
Change since picked: + 4.79
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Kinder Morgan - KMI - close: 93.74 chg: -0.14 stop: 87.45

We are a little puzzled that KMI isn't performing better given the rally in natural gas this past week. The overall pattern for KMI remains bullish but shares are consolidating under resistance at the $95 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: + 0.99
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 749 thousand

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Polaris Ind. - PII - close: 50.58 change: +0.80 stop: 48.49

PII is bouncing today with a 1.6% gain. The stock is about to challenge resistance at the bottom of its gap down near $51.00. If it can breakout over $51 then there's a good chance it will fill the gap near $53.00-53.50. We're going to keep our target in the $54.00-55.00 range. We're not suggesting new positions.

Picked on November 21 at $ 48.47
Change since picked: + 2.11
Earnings Date 01/12/06 (unconfirmed)
Average Daily Volume = 467 thousand

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Rockwell Autom. - ROK - cls: 60.27 chg: +0.34 stop: 57.95 *new*

ROK is almost there. The stock hit a high of $60.67 today and our target is the $61.00-62.00 range. Today marks the first close over the $60 level since early March 2005. We are not suggesting new positions. More conservative traders may want to strongly consider exiting right here. We are raising our stop loss to $57.95.

Picked on November 03 at $ 55.90
Change since picked: + 4.37
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 804 thousand

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Ryland Group - RYL - close: 75.83 change: +1.87 stop: 69.90

RYL is off to a decent start. The stock added 2.5% and confirmed its breakout over short-term resistance at the $74 level. Its MACD indicator is nearing a new buy signal. The DJUSHB home construction index added 2.6% today and broke out over its 100-dma. The sector index is poised to challenge its November highs as are shares of RYL. The P&F chart for RYL suggests an $89 target. There is some resistance near $77 but we suspect the stock can trade into the $79.50-80.00 range (our target) before its earnings report in January.

Picked on December 13 at $ 73.96
Change since picked: + 1.87
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Questar Corp - STR - close: 84.19 chg: +3.34 stop: 77.45

STR is off to a strong start as a call candidate. The stock gapped open to $81.95 and continued to rally throughout the session. Volume came in very strong and that suggests more strength ahead. Our target is the October highs in the $89.00-90.00 range. FYI: STR is also a current strangle play on the newsletter's play list.

Picked on December 13 at $ 80.85
Change since picked: + 3.34
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 752 thousand

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Sunoco Inc. - SUN - close: 83.82 chg: +0.64 stop: 76.45

It was a relatively quiet day for shares of SUN. The stock traded mostly sideways. We don't see any changes from our previous updates. 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: + 2.07
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 2.8 million

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Total S.A. - TOT - close: 131.62 change: +1.92 stop: 126.49

TOT also enjoyed the strength in energy stocks today. The stock added 1.48% and closed at a new two-month high. 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: + 1.37
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 936 thousand

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Tractor Supply - TSCO - cls: 54.84 chg: -0.19 stop: 51.95

We don't see any change from our previous update on TSCO. We're not suggesting new positions at this time. Our target is the $57-58 range.

Picked on November 30 at $ 52.75
Change since picked: + 2.09
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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Valero Energy - VLO - close: 109.10 chg: +0.10 stop: 99.49

VLO continues to consolidate under the $111 level but the stock did rebound from its lows near $107.65. We mentioned that VLO might dip toward $107 and today might have been it. 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: + 2.54
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 9.8 million

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Zimmer Holdings - ZMH - close: 69.51 chg: +0.71 stop: 65.75

This morning after the opening bell ZMH issued a press release stating that the company has received an approval letter for its ceramic hip replacement system. The stock rebounded off its lows of the session and was climbing higher with volume rising sharply near the closing bell. Our target is the $74.00-75.00 range under its simple 200-dma.

Picked on December 11 at $ 68.62
Change since picked: + 0.89
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 2.6 million
 

Put Updates

Magna Int. - MGA - close: 69.06 chg: +1.05 stop: 70.31

Okay, it may be time for us to start looking for the exits. The rebound in MGA has been rather substantial. It is true that MGA is still trading under its multi-month trendline of resistance and is still trading under technical resistance at its 200-dma near $70.00. The fact that it's still under significant resistance is why we're going to keep the play open but today's move over the 50-dma is a major flag of concern. We are not suggesting new positions at this time but we will be looking for a failed rally under $70 as a potential entry point. Our target is the $63-62 range.

Picked on December 04 at $ 68.14
Change since picked: + 0.92
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 318 thousand

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Netflix - NFLX - close: 24.43 chg: +0.38 stop: 27.45 *new*

NFLX almost reached our target today. The stock dipped to $22.54 and our target is $22.50. Unfortunately, shares rebounded very sharply and the session produced a bullish hammer candlestick pattern. Today teaches a good lesson. We weren't the only ones looking to exit near $22.50 and others decided to exit ahead of the crowd near $22.55. Use that same strategy to your advantage. We are not suggesting new positions. Today's action looks like a short-term bullish reversal. Conservative traders may want to significantly tighten their stops. Odds are that NFLX could rebound to $25.50 or higher toward the 10-dma near $26.60. We are lowering our stop loss to $27.45 near the 50-dma. We're also going to adjust our target to $22.55.

Picked on December 09 at $ 25.99
Change since picked: - 1.56
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: 81.42 chg: -0.08 stop: n/a

We're running out of time for ABC. The stock traded in a 40-cent range today. December options expire this Friday. More conservative traders may want to exit right here to salvage some of their capital. 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 $3.50. Currently the December $80 calls (ABC-LP) are trading at $1.50bid/$1.65ask.

Picked on October 16 at $ 74.81
Change since picked: + 6.54
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Amer. Eagle Out. - AEOS - cls: 21.74 chg: -0.01 stop: n/a

We don't see any change from our previous updates on AEOS. 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 $1.50bid/$1.65ask.

Picked on November 13 at $ 25.47
Change since picked: - 3.73
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 63.92 chg: +1.20 stop: n/a

ANF is still trying to rebound and if the Santa Claus rally shows up we'd expect shares to breakout over the $65 level. 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.

Picked on November 13 at $ 59.67
Change since picked: + 4.25
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 45.54 chg: +0.51 stop: n/a

If you have not opened a position yet in BCSI you might want to wait until next week to see if February strikes will become available. We would certainly prefer Februarys over January strikes. 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: + 0.11
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Chicago Merc. Exchg. - CME - cls: 369.35 chg: +0.10 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: - 6.55
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 37.94 chg: +1.13 stop: n/a

All aboard! It looks like the DHI train has left the station. Yesterday was a breakout from a bull flag pattern. Today's 3% gain appears to really confirm the move. 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 $3.70bid/$3.90ask.

Picked on November 13 at $ 32.56
Change since picked: + 5.38
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 48.40 chg: -0.08 stop: n/a

We don't see any change from our previous update on FS. The stock continues to show relative weakness. 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 $2.55bid/$2.75ask.

Picked on November 08 at $ 55.37
Change since picked: - 6.97
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 28.53 chg: -0.08 stop: n/a

LEA is currently struggling under the 50-dma and the $29.00 level. If we don't see more follow through to the downside over the next few days it may be prudent to try and exit early. 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: - 1.71
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Loews - LTR - close: 96.90 change: +0.52 close: n/a

Time is almost up. More conservative traders may want to exit right now and try to salvage some of their capital. The December options expire after Friday's close. 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. 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 $1.90bid/$2.15ask. The high today was $2.15.

Picked on October 23 at $ 89.94
Change since picked: + 6.96
Earnings Date 10/27/05 (confirmed)
Average Daily Volume = 602 thousand

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Verifone Holdings - PAY - cls: 24.22 chg: +0.52 stop: n/a

PAY is starting to look more bullish and today's 2% gain didn't hurt. 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 $2.05bid/$2.85ask.

Picked on October 12 at $ 19.98
Change since picked: + 4.24
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Protein Design Labs - PDLI - cls: 27.92 chg: -0.43 stop: n/a

We do not see any change from our weekend update. We have two 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: + 0.22
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million

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Spectrum Brands - SPC - close: 20.63 change: +1.90 stop: n/a

Now our strangle is in real trouble. Shares of SPC gapped higher at the open and closed with a 10% gain on big volume after a Bear Stearns analyst upgraded the stock to an "out perform". The analyst thought the company's valuation looks compelling and its long-term growth strategies realistic. Today's move is a significant breakout over multiple levels of resistance. It also puts SPC right back where we started this play. Unless shares move drastically (+/- 20%) either direction in the next two days we're have to mark this one a loser. 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: - 0.00
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 576 thousand

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Questar Corp. - STR - close: 84.19 chg: +3.34 stop: n/a

STR posted a very strong gain today adding more than 4% after yesterday's breakout over the $80.00 level. Volume came in well above its daily average on today's gain, which is a bullish development. 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. FYI: the STR-AP calls are trading at $5.50bid/$5.80ask.

Picked on November 20 at $ 76.25
Change since picked: + 7.94
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 52.20 chg: +0.51 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: + 2.63
Earnings Date 12/15/05 (unconfirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 109.10 chg: +0.10 stop: n/a

We don't see any change from our previous updates on VLO. 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: + 8.10
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

Constellation Energy - CEG - cls: 61.10 chg: +4.83 stop: 53.39

Target achieved. News out this morning that FPL Group (FPL) is in advanced talks to buy Constellation Energy (CEG) for more than $11 billion sent shares of CEG soaring. The stock gapped open at $60.15 and traded to $61.60 at its high. Our target was the $60-62 range.

Picked on December 11 at $ 55.60
Change since picked: + 5.50
Earnings Date 01/27/06 (unconfirmed)
Average Daily Volume = 947 thousand
 

Dropped Puts

None
 

Dropped Strangles

None
 

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