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Call Updates

Apache - APA - close: 69.17 change: -0.33 stop: 67.99

Crude oil continued to slide on Monday and the oil sector did not escape the market-wide weakness. Shares of APA lost another 0.47% and its technical indicators continue to worsen. APA is testing support at its trendline of higher lows and the 100-dma. If the stock doesn't bounce from the $69 (or $68) level tomorrow then odds are good that we'll be stopped out. Consider the late day turn lower on Monday APA looks vulnerable to more selling. We are not suggesting new positions and more conservative traders may want to exit early to avoid further losses.

Picked on December 08 at $ 70.98
Change since picked: - 1.81
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Dominion Res. - D - close: 80.50 chg: -0.37 stop: 74.75

Shares of D were not able to avoid the market's weakness either. The stock dipped to $80.31 and looks poised to test the $80.00 mark tomorrow. The lack of reaction to the S&P credit downgrade today is probably bullish. We would not suggest new bullish positions in D right here. Watch for a dip and a bounce from the $80.00 level before considering new bullish positions. If the market averages turn lower then we'd look for D to test its 10-dma (near $79). 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: + 2.26
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Femsa Fomento - FMX - close: 69.58 chg: -0.10 stop: 67.75

The Mexican stock market had a rough day losing more than 180 points for a 1% loss on Monday. Therefore the early morning, intraday spike to $71.11 in shares of FMX is a mystery. We cannot find any news or catalyst to account for the failed rally, which is exactly what this looks like - a failed rally and a short-term top. We have been triggered at $70.65 but we are not suggesting new bullish positions. Honestly, conservative traders, if you were triggered, you may want to just exit early right here to avoid further losses. The afternoon sell-off was picking up speed into the closing bell and this suggests more weakness tomorrow. We repeat we are not suggesting new bullish positions in FMX at this time.

chart:

Picked on December 19 at $ 70.65
Change since picked: - 1.07
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 308 thousand

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Garmin ltd - GRMN - close: 61.35 change: +0.31 stop: 57.90

GRMN managed a bounce from its simple 10-dma this morning but the stock was already fading lower late this afternoon. If the major averages turn lower again tomorrow then we'd look for GRMN to hit the $60 level and/or its simple 50-dma. We would not even consider new bullish positions until we see a bounce from $60. Our mid-January target is the $69.00-70.00 range. We do not want to hold over the January earnings report. More conservative traders may want to tighten their stop losses.

Picked on December 13 at $ 63.54
Change since picked: - 2.19
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Kerr Mcgee - KMG - close: 91.62 chg: -0.90 stop: 88.99

KMG also suffered another round of profit taking like most of the oil sector. Today's decline confirms the drop under the 10-dma and the stock looks poised to test round-number support at the $90 level. We would not suggest new positions at this time. Our mid January target is the $98.50-100 range.

Picked on December 02 at $ 90.26
Change since picked: + 1.36
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Kinder Morgan - KMI - close: 92.44 chg: -1.53 stop: 91.90

Oil may have closed lower but natural gas futures were able to turn around from earlier weakness and closer higher on the session. Unfortunately, this strength in the natural gas futures failed to translate into strength for KMI. The stock was weak pretty much from the start and sank throughout the rest of the session. The stock is testing technical support at its 21-dma and 100-dma. Shares also have additional support near $92.00 at the bottom of its two-week trading range. We are not suggesting new positions here.

Picked on December 02 at $ 92.75
Change since picked: - 0.31
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 749 thousand

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Polaris Ind. - PII - close: 48.94 change: -0.95 stop: 48.49

PII fell toward last weeks low and actually hit a new relative low but managed to bounce, twice, from the $48.70 region. We are not suggesting new positions and more conservative traders may just want to exit early.

Picked on November 21 at $ 48.47
Change since picked: + 0.47
Earnings Date 01/12/06 (unconfirmed)
Average Daily Volume = 467 thousand

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Ryland Group - RYL - close: 73.03 change: -2.11 stop: 71.85 *new*

Homebuilders were leaders to the downside on Monday with the DJUSHB home construction index losing more than 2.1%. Shares of RYL out performed to the downside as well losing 2.8% but on very low volume. The stock is pulling back toward its rising trendline of support (higher lows). We're going to raise our stop so that if RYL breaks down below this support we'll be taken out. We are not suggesting new positions at this time. Our new stop loss will be $71.85. Tomorrow brings more housing data with the new building permits and housing starts.

Picked on December 13 at $ 73.96
Change since picked: - 0.93
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Questar Corp - STR - close: 81.30 chg: -0.62 stop: 77.45

As expected STR turner lower on Monday but the stock actually held up better than we expected. Shares did not dip to the $80 level (yet) and the 10-dma can still act as support. Only on a bounce from the $80 level would we consider new bullish positions. Our target is the October highs in the $89.00-90.00 range. The P&F chart points to a $105 target. FYI: STR is also a current strangle play on the newsletter's play list.

Picked on December 13 at $ 80.85
Change since picked: + 0.45
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 752 thousand

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Total S.A. - TOT - close: 127.79 change: -1.24 stop: 126.49

TOT's breakdown under the $128 level may be bad news. The stock's technical picture is deteriorating and if shares don't bounce very soon then odds are we'll be stopped out. The next level of support is the 50-dma just a few cents above our stop loss. We are not suggesting new positions.

Picked on December 13 at $130.25
Change since picked: - 2.46
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 936 thousand

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Tractor Supply - TSCO - cls: 53.15 chg: -1.12 stop: 51.95

TSCO under performed the RLX retail index on Monday. The stock lost more than two percent and broke down to a new two-week low. This looks pretty bearish and conservative traders may just want to exit early right here to salvage their trading capital (or raise their stop toward breakeven). If TSCO doesn't rebound tomorrow we'll probably exit early assuming we're not stopped out.

Picked on November 30 at $ 52.75
Change since picked: + 0.40
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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Valero Energy - VLO - close: 51.79 chg: -0.48 stop: 49.74

VLO is just another casualty to the oil-sector sell-off. The stock looks poised to test its 50-dma near 50.92 soon. A bounce from here or the $50 level could be used as a new bullish entry point. We are not suggesting new plays at this time. Our post-split target is $58.50. FYI: VLO is also a current strangle play in the strangle section.

Picked on December 08 at $ 53.28 (split adjusted)
Change since picked: - 1.49
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 9.8 million

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Zimmer Holdings - ZMH - close: 70.16 chg: -1.39 stop: 67.75

ZMH lost almost two percent as part of the market's pull back on Monday. We are not suggesting new plays right here.

Picked on December 11 at $ 68.62
Change since picked: + 1.54
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 2.6 million
 

Put Updates

Magna Int. - MGA - close: 68.54 chg: -0.71 stop: 70.31

MGA's decline today may be the sort of failed rally entry point we've been looking for. More conservative traders may want to wait for a drop under $68.00 before considering new put positions. We don't see any other changes from our weekend update.

Picked on December 04 at $ 68.14
Change since picked: + 0.40
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 318 thousand

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Netflix - NFLX - close: 25.67 chg: -0.63 stop: 27.45

NFLX did continue lower on Monday losing 2.39% following Friday's failed rally pattern. This might be considered a new bearish entry point to buy calls - only do so carefully and monitor your stops. The biggest risk is a short squeeze. Our target is $22.55. The P&F chart points to a $15 target.

Picked on December 09 at $ 25.99
Change since picked: - 0.32
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 1.4 million

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PACCAR Inc. - PCAR - close: 69.91 change: -0.21 stop: 72.51

PCAR continued to drift lower but the stock has not hit our trigger at $69.49. We remain on the sidelines. If triggered we'll target a drop into the $65.25-65.00 range before

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 838 thousand
 

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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Amer. Eagle Out. - AEOS - cls: 21.22 chg: +0.06 stop: n/a

We don't see any change from our weekend update for 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 $1.75bid/$1.85ask.

Picked on November 13 at $ 25.47
Change since picked: - 4.25
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 63.01 chg: -0.33 stop: n/a

We don't see any change from our weekend update for 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: + 3.34
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 43.24 chg: -0.02 stop: n/a

BCSI tried to rebound but it failed near old support at the $44 level. This would suggest the new direction will be down. February strikes are now available and anyone looking for a new position can hope for a bounce back toward the $45 level. At this time we're not suggesting new plays. Our current play involves 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 five weeks left before January options expire.

Picked on December 04 at $ 45.43
Change since picked: - 2.19
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 81.25 chg: +0.30 stop: n/a

BMHC displayed a bit of volatility in the first hour of trading. The stock traded higher to $82.91 and then dipped to $79.76, which gave readers a great chance to open new strangle positions near the $80.00 mark. Another late afternoon dip toward $80.15 offered another entry point to launch a strangle position. We initiated this play over the weekend with a suggested $81.50-79.00 entry window. The options we are suggesting are the March $90 calls (BGU-CR) and the March $70 puts (BGU-ON). Our estimated cost is $8.20. Our target is $12.50 by March expiration.

Picked on December 18 at $ 80.95
Change since picked: + 0.00
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 367.15 chg: -1.86 stop: n/a

We do not see any change from our weekend 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: - 8.75
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 36.57 chg: -1.24 stop: n/a

The homebuilders were hit hard with profit taking on Monday and DHI lost more than 3.2%. 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 $2.50bid/$2.60ask.

Picked on November 13 at $ 32.56
Change since picked: + 4.01
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 48.27 chg: -0.22 stop: n/a

FS continued to drift lower but failed to breakdown under minor support at the $48.00 level. 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 $2.50bid/$2.75ask.

Picked on November 08 at $ 55.37
Change since picked: - 7.10
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 28.05 chg: -0.43 stop: n/a

We do not see any change from our weekend update on LEA. 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.

Picked on November 06 at $ 30.24
Change since picked: - 2.19
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Verifone Holdings - PAY - cls: 23.45 chg: -1.00 stop: n/a

The sometimes volatile shares of PAY suffered some serious profit taking Monday morning and closed with a 4% decline on above average volume. The stock's low today proved to be a bounce off its simple 50-dma. 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 $1.60bid/$2.05ask.

Picked on October 12 at $ 19.98
Change since picked: + 3.47
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Questar Corp. - STR - close: 81.30 chg: -0.62 stop: n/a

We do not see any change from our weekend update for our strangle play on STR. 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 $3.30bid/$3.60ask.

Picked on November 20 at $ 76.25
Change since picked: + 5.05
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 49.75 chg: -1.00 stop: n/a

We see no change from our weekend update on TXI although it is noteworthy that TXI lost almost 2% and broke down under round-number support at $50.00 and technical support at its 50-dma. 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: + 0.18
Earnings Date 12/15/05 (unconfirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 51.79 chg: -0.48 stop: n/a

We do not see any change from our weekend update for our strangle play 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 adjusted cost is $2.93. Our adjusted target is $4.75.

Picked on November 21 at $ 50.50
Change since picked: + 1.29
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

FMC Corp. - FMC - close: 51.85 chg: -0.82 stop: 51.95

The recent sell-off continues for shares of FMC and the stock has broken down below support at the $52.00 level and its simple 50-dma. We've been stopped out at $51.95. Volume came in well above its daily average. Normally, since FMC is a chemical producer, you'd think that lower oil prices would be bullish for the company but the stock is certainly not reacting that way.

Picked on December 01 at $ 55.04
Change since picked: - 3.19
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 270 thousand
 

Dropped Puts

None
 

Dropped Strangles

None
 

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