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Call Updates

Apache - APA - close: 70.45 change: 1.28 stop: 67.99

Oil stocks bounced after crude oil prices rallied for the first time in four sessions. APA's rebound back over the $70.00 level looks like a new bullish entry point but we would enter new positions very cautiously. This may just be an oversold bounce even though it coincides with APA's rising trendline of support.

Picked on December 08 at $ 70.98
Change since picked: - 0.53
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Dominion Res. - D - close: 80.82 chg: 0.32 stop: 74.75

Shares of D dipped toward round number support at $80.00 this morning and bounced. Normally this would look like a new bullish entry point but with the major averages looking unstable we would hesitate to initiate new long positions here. 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: 2.58
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Femsa Fomento - FMX - close: 70.41 chg: 0.83 stop: 67.75

Good fortune has smiled on us. Yesterday's failed rally in FMX did not see any follow through lower. Instead the stock shot higher this morning and closed over the $70.00 level. A move over $70.65 or yesterday's high at 71.11 could be used as a new bullish entry point.

Picked on December 19 at $ 70.65
Change since picked: - 0.24
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 308 thousand

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Garmin ltd - GRMN - close: 61.38 change: 0.03 stop: 57.90

GRMN spent Tuesday trading sideways. We do not see any change from our previous updates. 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: - 2.16
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Kerr Mcgee - KMG - close: 92.89 chg: 1.27 stop: 88.99

A Reuters article out today said that KMG reiterated its fourth quarter output forecast between 248,500 to 277,200 barrels of oil per day. Meanwhile the stock added 1.3% as the oil sector rebounded today. This bounce could be used as a new bullish entry point but we hesitate to initiate new call positions. Our mid January target is the $98.50-100 range.

Picked on December 02 at $ 90.26
Change since picked: 2.63
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Kinder Morgan - KMI - close: 92.90 chg: 0.46 stop: 91.90

Natural gas futures continued to climb today but that didn't help shares of KMI much. The technical picture continues to look bearish and today's bounce wasn't much to write home about. We are not suggesting new positions here.

Picked on December 02 at $ 92.75
Change since picked: 0.15
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 749 thousand

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Ryland Group - RYL - close: 74.25 change: 1.22 stop: 71.85

Surprising strength in today's building permits and housing starts data helped fuel a rebound in the homebuilders after yesterday's drubbing. RYL bounced from an intraday low near $72.00 and the move looks like a new bullish entry point.

Picked on December 13 at $ 73.96
Change since picked: 0.29
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Questar Corp - STR - close: 80.65 chg: -0.65 stop: 77.45

Strength in natural gas today failed to produce anything positive in STR. The stock merely traded sideways above round-number support at the $80.00 level. 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: - 0.20
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 752 thousand

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Total S.A. - TOT - close: 126.72 change: -1.07 stop: 126.49

We need to go to red alert here with TOT. The stock failed to bounce with most of the oil sector today. Instead shares lost 0.8% and slipped toward technical support near the 50-dma (126.50). Our stop loss isn't very far away. We are not suggesting new positions at this time.

Picked on December 13 at $130.25
Change since picked: - 3.53
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 936 thousand

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Tractor Supply - TSCO - cls: 54.53 chg: 1.38 stop: 51.95

TSCO turned in a strong session. The stock dipped to $52.71 this morning and then rebounded sharply to close with a 2.59% gain. We are not suggesting new plays at this time.

Picked on November 30 at $ 52.75
Change since picked: 1.78
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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Valero Energy - VLO - close: 51.22 chg: -0.57 stop: 49.74

VLO continues to slide toward the cloud of moving averages in the $50.75-50.95 region. Watch for a bounce before considering new positions. 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: - 2.06
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 9.8 million

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Zimmer Holdings - ZMH - close: 68.25 chg: -1.91 stop: 67.75

Watch out! ZMH lost 2.7% on no news today. This move is a breakdown below the $70.00 mark and its simple 10-dma. Our stop loss is 50-cents away at $67.75. More conservative traders may want to seriously consider exiting immediately. We are not suggesting new plays right here.

Picked on December 11 at $ 68.62
Change since picked: - 0.37
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 2.6 million
 

Put Updates

Magna Int. - MGA - close: 68.96 chg: 0.42 stop: 70.31

Shares of GM slipped to a new 18-year low under $20 a share. This weakness in carmaker GM is weighing on other auto parts markets but not MGA. For some unexplained reason MGA is showing strength today after a morning dip to $67.84 near its 10-dma. We are not suggesting new positions!

Picked on December 04 at $ 68.14
Change since picked: 0.82
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 318 thousand

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Netflix - NFLX - close: 25.11 chg: -0.51 stop: 27.45

So far so good. NFLX is following our script and we don't see any change from our previous updates. 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: - 0.83
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 1.4 million

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PACCAR Inc. - PCAR - close: 68.75 change: -1.16 stop: 72.51

Ongoing worries over the future of GM helped push the carmaker's stock to a new 18-year low. This is weighing on many of the car markers and auto parts makers. Shares of PCAR lost 1.65% in sympathy. Today's decline in PCAR came on above average volume and produced a breakdown below the 50-dma. Our trigger to buy puts was at $69.49 so the play is now open. Our target is the $65.25-65.00 range.

Picked on December 20 at $ 69.49
Change since picked: - 0.74
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: 21.55 chg: 0.33 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 $1.45bid/$1.60ask.

Picked on November 13 at $ 25.47
Change since picked: - 3.92
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 63.47 chg: 0.46 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: 3.80
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 42.48 chg: -0.76 stop: n/a

BCSI is showing some relative weakness here. The stock looks poised to breakdown under support at the $42.00 level and its 100-dma. 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: - 2.95
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 80.13 chg: -1.12 stop: n/a

BMHC is still oscillating around the $80.00 level. We initiated this play over the weekend with a suggested $81.50-79.00 entry window. The closer to $80.00 the better the entry point. 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: - 0.82
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 371.71 chg: 4.56 stop: n/a

Thus far this play in CME is not working out. It's been one month since we started this strangle at $375.90. Since then CME has rallied to $396.90 and fell to $344.00. Unfortunately, this sideways trading we're seeing right now over the past week is the worst thing that can happen to us with a strangle. More conservative traders may want to seriously think about exiting early before the options premiums deteriorate any more. 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: - 4.19
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 36.40 chg: -0.17 stop: n/a

DHI's relative weakness today was a surprise. This morning the building permits and housing starts data came in strong. Many stocks in the homebuilding sector rebounded on the news. Currently DHI is close to testing its two-month trendline of support (rising pattern of higher lows). 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 $2.30bid/$2.40ask.

Picked on November 13 at $ 32.56
Change since picked: 3.84
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 48.57 chg: 0.30 stop: n/a

We do not see any change from our weekend update on FS. 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 $2.20bid/$2.50ask.

Picked on November 08 at $ 55.37
Change since picked: - 6.80
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 27.53 chg: -0.52 stop: n/a

New concerns over carmaker GM pulled the stock down more than 5% to a new 18-year low. This weakness in the largest (for now) carmaker on the planet is also affecting shares of LEA. 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: - 2.71
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Verifone Holdings - PAY - cls: 23.33 chg: -0.12 stop: n/a

We do not see any change from our previous 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 $1.50bid/$1.80ask.

Picked on October 12 at $ 19.98
Change since picked: 3.35
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Questar Corp. - STR - close: 80.65 chg: -0.65 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 $2.70bid/$2.90ask.

Picked on November 20 at $ 76.25
Change since picked: 4.40
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 49.58 chg: -0.17 stop: n/a

We see no change from our weekend update on TXI. 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: 0.01
Earnings Date 12/15/05 (unconfirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 51.22 chg: -0.57 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: 0.72
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

Polaris Ind. - PII - close: 48.45 change: -0.49 stop: 48.49

PII experienced another day of weakness losing one percent. Today's move pushed shares below the bottom of its seven-day trading range. We have been stopped out at $48.49.

Picked on November 21 at $ 48.47
Change since picked: - 0.02
Earnings Date 01/12/06 (unconfirmed)
Average Daily Volume = 467 thousand
 

Dropped Puts

None
 

Dropped Strangles

None
 

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