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Call Updates

Apache - APA - close: 71.22 change: -2.12 stop: 67.99 *new*

Thursday proved to be a rough session for energy stocks, especially oil stocks. Crude oil slipped more than 80 cents to close at $59.99 a barrel while natural gas futures turned in a very volatile day but closed significantly lower this afternoon. The OIX oil index lost 1.4% and shares of APA lost 2.8%. APA looks ready to test the 10-dma near 70.40 and probably the $70.00 level, which should be round-number support. Readers can watch for a bounce from $70.00 as a new bullish entry point. We would not suggest new positions here. We are going to raise our stop loss to $67.99. More conservative traders may want to tighten their stops even further.

Picked on December 08 at $ 70.98
Change since picked: + 0.24
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Dominion Res. - D - close: 81.09 chg: +0.18 stop: 74.75

Utility stocks out performed the rest of the energy sector and shares of D managed to bounce from their intraday low near $80.29. We would not suggest new positions at this time. 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: + 2.85
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 1.8 million

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FMC Corp. - FMC - close: 53.23 chg: -0.53 stop: 51.95

Traders have a decision to make with FMC. Either choose to exit here, protect your capital, and look for a new entry point later. Or speculate on a bounce from the $52.75 region or maybe a dip all the way toward late November support near $52.00, which is underpinned by the 50-dma. The P&F chart may be bullish but short-term technicals are bearish. We do expect the stock to dip lower. We are not suggesting new positions at this time.

Picked on December 01 at $ 55.04
Change since picked: - 1.81
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 270 thousand

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Femsa Fomento - FMX - close: 69.45 chg: +0.09 stop: 67.75

FMX is still creeping higher but remains under the $70.00 mark. 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: 62.20 change: -1.29 stop: 57.90

There should be no surprises here. We mentioned that GRMN would probably give us another dip toward the $62 level. A bounce from here could be used as a new bullish entry point. The problem lies with the markets. If the major indices turn lower tomorrow then GRMN may dip toward the $60.00 level and its 50-dma. 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: - 1.34
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Hydril - HYDL - close: 69.63 change: -1.05 stop: 65.95

HYDL was unable to escape the profit taking in the oil sector today. We don't see any changes from our previous update on the stock. More conservative traders may want to wait for another move over $71.00 or $71.50 before considering call 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: - 1.38
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 263 thousand

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Kerr Mcgee - KMG - close: 94.41 chg: -0.64 stop: 88.99

Shares of KMG managed to resist most of the profit taking in the oil sector today. The stock continues to climb inside its narrow, rising channel. 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. In the news today KMG announced plans to cut its budget by $600 million in 2006 and shift its focus to less risky ventures in the Rocky Mountains.

Picked on December 02 at $ 90.26
Change since picked: + 4.15
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Kinder Morgan - KMI - close: 94.09 chg: +0.35 stop: 87.45

A very volatile day for natural gas futures did not translate into a volatile day for KMI. The stock continues to consolidate 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: + 1.34
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 749 thousand

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Polaris Ind. - PII - close: 50.19 change: -0.39 stop: 48.49

We do not see any change from our previous update on PII. The very late afternoon bounce looks encouraging since volume was rising on the rally attempt. 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: + 1.72
Earnings Date 01/12/06 (unconfirmed)
Average Daily Volume = 467 thousand

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Rockwell Autom. - ROK - cls: 59.94 chg: -0.33 stop: 57.95

We see no change from our previous update on ROK. We are not suggesting new positions. More conservative traders may want to strongly consider exiting right here. Our target is the $61.00-62.00 range.

Picked on November 03 at $ 55.90
Change since picked: + 4.04
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 804 thousand

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Ryland Group - RYL - close: 75.12 change: -0.71 stop: 69.90

RYL spiked higher this morning but could not breakout past its November highs. The stock spent the rest of the session drifting lower with traders doing some profit taking and the stock coming to rest near the $75.00 strike price ahead of December options expiration tomorrow. We would not be surprised to see a dip back toward the $74 level. A bounce from $74 could be used as a new bullish entry point. Our target is the $79.50-80.00 range.

Picked on December 13 at $ 73.96
Change since picked: + 1.16
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Questar Corp - STR - close: 83.89 chg: -0.30 stop: 77.45

We see STR's 30-cent decline as relative strength. A volatile and eventually negative session for natural gas prices did not affect shares of STR. A bounce from $81 could be used as a new bullish entry point. 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: + 3.04
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: 129.19 change: -2.43 stop: 126.49

TOT did not escape the energy sector profit taking. The stock lost 1.8%. However, it may be worth noting that TOT tested support near $128.50 three times today. A move back over $130 could be used as a new bullish entry point. 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: - 1.06
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 936 thousand

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Tractor Supply - TSCO - cls: 54.73 chg: -0.11 stop: 51.95

TSCO traded in a very narrow range for most of the session. 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: + 1.97
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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Valero Energy - VLO - close: 106.88 chg: -2.82 stop: 99.49

VLO experienced some profit taking today after a strong performance in December thus far. A pull back in crude oil prices, combined with an analyst initiating coverage with a "neutral" rating, in addition to news that VLO has decided against a joint venture with Encana all may have influenced today's selling pressure. We see the late afternoon bounce from the 10-dma and the $105 level as a potential entry point for new long positions. However, we wait to see some follow through on this afternoon's bounce before initiating new call positions. 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: + 0.32
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 9.8 million

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Zimmer Holdings - ZMH - close: 69.99 chg: +0.48 stop: 65.75

ZMH displayed some strength today after announcing a $1 billion stock buy back program. The stock spiked toward the $71 level but could not hold its gains. The afternoon weakness suggests a dip back toward the 10-dma (68.25) is likely tomorrow. Our target is the $74.00-75.00 range under its simple 200-dma.

Picked on December 11 at $ 68.62
Change since picked: + 1.37
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 2.6 million
 

Put Updates

Magna Int. - MGA - close: 68.94 chg: -0.12 stop: 70.31

We do not see any change from yesterday's update on MGA. We believe that traders should remain on yellow alert considering yesterday's breakout over the 50-dma. 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: + 0.80
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 318 thousand

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Netflix - NFLX - close: 25.94 chg: +1.51 stop: 27.45

This should not be a surprise. Yesterday we told readers to expect a rebound and expect the rebound to be sharp since NFLX is so heavily shorted. It didn't help matters (for the bears) that one analyst firm came out today and suggested the sell-off was a new buying opportunity. We are looking for the $26.50-27.00 range to offer overhead resistance. We are not suggesting new positions. Our target is $22.55.

Picked on December 09 at $ 25.99
Change since picked: - 0.05
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: 81.25 chg: -0.17 stop: n/a

Time is almost up! The stock traded in a 43-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 breakeven at $2.80. If the calls don't reach our new target we still have to exit before the close on Friday for whatever market value is. Currently the December $80 calls (ABC-LP) are trading at $1.25bid/$1.35ask.

Picked on October 16 at $ 74.81
Change since picked: + 6.37
Earnings Date 11/03/05 (confirmed)
Average Daily Volume = 900 thousand

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Amer. Eagle Out. - AEOS - cls: 21.49 chg: -0.25 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 $1.60bid/$1.75ask.

Picked on November 13 at $ 25.47
Change since picked: - 3.98
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 63.84 chg: -0.08 stop: n/a

We do not see any change from our previous updates on ANF. 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: + 4.17
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 45.45 chg: -0.09 stop: n/a

We don't see any change from yesterday's update. 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: + 0.02
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Chicago Merc. Exchg. - CME - cls: 368.12 chg: -1.23 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: - 7.78
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 37.54 chg: -0.40 stop: n/a

DHI hit some profit taking today after what has so far been a very bullish week. 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 $3.30bid/$3.60ask.

Picked on November 13 at $ 32.56
Change since picked: + 4.98
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 48.55 chg: +0.15 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 $2.30bid/$2.65ask.

Picked on November 08 at $ 55.37
Change since picked: - 6.82
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 28.37 chg: -0.16 stop: n/a

We don't see any change from yesterday's update on LEA. 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: - 1.87
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Loews - LTR - close: 96.90 change: +0.00 close: n/a

Tomorrow is our last day. 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. Please note the new target - we plan to exit if our strangle rises to $3.90 or if shares of LTR hit 99.90. If LTR does not hit our target we still have to exit before Friday's close for whatever the current bid is. Currently the LTR-LS calls are trading at $1.75bid/$2.05ask. The high today was $2.40.

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: 24.65 chg: +0.43 stop: n/a

PAY made another rally attempt at the $25.00 resistance level. Shares closed with a 1.77% gain on above average volume. 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 $2.40bid/$3.20ask.

Picked on October 12 at $ 19.98
Change since picked: + 4.67
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Protein Design Labs - PDLI - cls: 29.02 chg: +1.10 stop: n/a

Tomorrow is our last day for the PDLI strangle. Right now the stock's bias appears bullish. Yet unless the stock can trade significantly above the $30 level tomorrow we'll be closing it at a loss.

Picked on October 30 at $ 27.70
Change since picked: + 1.32
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 1.8 million

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Spectrum Brands - SPC - close: 20.06 change: -0.57 stop: n/a

Yesterday's unexpected gap up was the worst thing that could happen to us for this strangle play. Tomorrow's our last day for December options. Unless there is another big move tomorrow we'll be closing this play with a loss.

Picked on November 08 at $ 20.63
Change since picked: - 0.57
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 576 thousand

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Questar Corp. - STR - close: 83.89 chg: -0.30 stop: n/a

STR managed to hold on to most of its recent gains despite selling in the natural gas commodity. There are less than 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 $5.30bid/$5.70ask.

Picked on November 20 at $ 76.25
Change since picked: + 7.64
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 51.90 chg: -0.30 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: + 2.33
Earnings Date 12/15/05 (unconfirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 106.88 chg: -2.82 stop: n/a

VLO experienced some profit taking after a very strong December performance so far. The intraday bounce from the 10-dma near $105 is a positive sign. 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 in the strangle's value.

Picked on November 21 at $101.00
Change since picked: + 5.88
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

Alcon - ACL - close: 139.75 change: -1.70 stop: 139.90

Yesterday's unexplained sell-off in ACL produced some follow through selling on Thursday. The stock dipped to $139.10 intraday and the oversold bounce midday failed to hold and ACL closed under the $140.00 level. Our stop loss was at $139.90 so we've been stopped out. Keep an eye on the simple 50-dma near 137.00. A bounce from there could be a new entry point or a breakdown below it could be a new bearish entry point.

Picked on December 11 at $144.60
Change since picked: - 4.85
Earnings Date 02/08/06 (unconfirmed)
Average Daily Volume = 524 thousand
 

Dropped Puts

None
 

Dropped Strangles

None
 

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