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Call Updates

Apache - APA - close: 71.15 change: 0.19 stop: 67.99

Oil stocks remain sluggish after crude oil fell 28 cents to $58.27 a barrel today. Shares of APA out performed many of its peers but we hesitate to suggest new long positions here.

Picked on December 08 at $ 70.98
Change since picked: 0.17
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Cytec Ind. - CYT - close: 47.34 chg: 0.87 stop: 44.99

We have been triggered in CYT. The stock gapped higher this morning to open at $46.67 and shares then climbed throughout the rest of the session. Our trigger to buy calls was at $47.01. Volume came in about average but more than what CYT has seen in the last couple of weeks. Today's bullish move is a breakout over multiple levels of resistance. Our target is the $50.00 level (actually we'll adjust our target to $49.85-50.00). The P&F chart for CYT points to a $65 target.

Picked on December 22 at $ 47.01
Change since picked: 0.33
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 333 thousand

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Femsa Fomento - FMX - close: 71.57 chg: -0.51 stop: 67.75

This pull back toward $71.00 might be a new entry point. However, if you're looking to enter new call positions in FMX consider waiting for a dip back into the $70.00-70.75 region. Our target is the $74.75-75.00 range. The Point & Figure chart for FMX points to an $87 target.

Picked on December 19 at $ 70.65
Change since picked: 0.92
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 308 thousand

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Gilead Sciences - GILD - close: 55.40 chg: 1.33 stop: 49.99

Our play in GILD is now open. Our trigger to buy calls was at $54.51. Biotech stocks were pretty strong today. The BTK biotech index added 1.85% and broke out over its four-week resistance trendline of lower highs. GILD was even stronger with a 2.45% gain to confirm yesterday's breakout over its trend of lower highs. The move also produced a new MACD buy signal on its daily chart. We remain bullish on GILD but readers should know. We just read multiple articles from a New Zealand publication, an Australian paper, and now Britain's the Times that all discussed the alarming development of human cases of the avian flu that failed to respond to the Tamiflu drug. Instead the virus became resistant and more deadly. One report suggested that patients would need bigger doses of Tamiflu. GILD invented Tamiflu and then sold it to Roche who pays GILD royalties. If Tamiflu isn't the wonder drug the world believes it is then shares of GILD could see a big negative reaction. If you remember part of the rally yesterday in GILD was because the U.S. had just okayed Tamiflu as a treatment for children. Multiple countries around the world are stockpiling the drug in case of an avian flu pandemic.

Picked on December 22 at $ 54.51
Change since picked: 0.89
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 4.3 million

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Garmin ltd - GRMN - close: 68.30 change: 5.51 stop: 61.99 *new*

GRMN made some big moves today! The stock added 8.77% on big volume that came in about three times the daily average. What's odd is that we can't find any specific news or catalyst to explain the sudden rally higher but we're not complaining. We are raising our stop loss to $61.99. More conservative traders may just want to exit right here for a gain! Our target is the $69.00-70.00 range.

Picked on December 13 at $ 63.54
Change since picked: 4.76
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Kerr Mcgee - KMG - close: 92.46 chg: -0.53 stop: 88.99

KMG is still consolidating and not seeing much movement either way. We remain cautious and hesitant to suggest new long positions here. Our mid January target is the $98.50-100 range.

Picked on December 02 at $ 90.26
Change since picked: 2.20
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Kinder Morgan - KMI - close: 93.13 chg: 0.06 stop: 91.90

We do not see any change from our previous updates on KMG. We are not suggesting new positions here.

Picked on December 02 at $ 92.75
Change since picked: 0.38
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 749 thousand

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Ryland Group - RYL - close: 74.05 change: 0.83 stop: 71.85

Homebuilders turned in an okay session. RYL is still trading above its trendline of higher lows (support). Traders may want to consider new longs here or wait for a move over $74.70.

Picked on December 13 at $ 73.96
Change since picked: - 0.74
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Questar Corp - STR - close: 79.30 chg: 0.75 stop: 77.45

Good news! The recent sell-off has stalled near short-term support at the $78.00 level (and the 50-dma). This could just be an oversold bounce but we're not going to complain. We would wait for a new move over $80.00 before considering new call positions again. For what it's worth Cramer was pretty bullish on STR tonight. FYI: STR is also a current strangle play on the newsletter's play list.

Picked on December 13 at $ 80.85
Change since picked: - 1.55
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 752 thousand

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Total S.A. - TOT - close: 128.03 change: 1.03 stop: 126.49

TOT is starting to bounce but we don't see any changes from our previous updates. We are not suggesting new positions at this time. Look for a new move over $130 before considering call positions.

Picked on December 13 at $130.25
Change since picked: - 2.23
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 936 thousand

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Tractor Supply - TSCO - cls: 54.11 chg: -0.59 stop: 51.95

Retailers didn't fare that well today and shares of TSCO slipped lower after failing to breakout over the $55.00 mark today. We are not suggesting new plays at this time. Our target is the $57.00-58.00 range.

Picked on November 30 at $ 52.75
Change since picked: 1.36
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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Valero Energy - VLO - close: 53.38 chg: 0.46 stop: 49.74

VLO continued to bounce following yesterday's bullish reversal. We don't see any changes from our previous updates. 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: 0.10
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 9.8 million

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United States Steel - X - close: 46.59 chg: 0.10 stop: 44.65

We remain on the sidelines with X. The stock is trying to bounce higher but remains under its 10-dma and its three-week trend of lower highs. Our trigger to buy calls is at $47.05. If triggered we'll target a rise into the $52.00-52.50 range. We do not want to hold over the January earnings report.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 3.8 million
 

Put Updates

PACCAR Inc. - PCAR - close: 70.25 change: 0.53 stop: 72.51

PCAR is not cooperating. This could just be an oversold bounce but the action over the last two to three days almost looks like a short-term bullish reversal. We would not suggest new bearish positions at this time although more aggressive traders can look for a failed rally under $71. Our target is the $65.25-65.00 range.

Picked on December 20 at $ 69.49
Change since picked: 0.76
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 838 thousand

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Progressive Corp - PGR - cls: 118.75 chg: -0.15 stop: 121.25

We are on the sidelines with PGR. The stock is still oscillating near $118 and its simple 50-dma. Our trigger to buy puts is at $117.45. If triggered we'll target a decline into the $110.50-110.00 range. We do not want to hold over the January earnings report. For more details on this play please see Wednesday's play description.

Picked on December xx at $ xx.xx <-- see Trigger
Change since picked: 0.00
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 836 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: 21.70 chg: 0.68 stop: n/a

Hmm... AEOS is suddenly showing relative strength especially against the RLX retail index, which closed in the red today. 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 $1.25bid/$1.40ask.

Picked on November 13 at $ 25.47
Change since picked: - 3.69
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 64.38 chg: 0.62 stop: n/a

ANF is inching closer and closer to a bullish breakout over the $65.00 level. 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: 4.71
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 43.35 chg: 0.76 stop: n/a

BCSI is bouncing a bit from 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: - 2.08
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 82.29 chg: 0.49 stop: n/a

BMHC is now outside of our suggested entry window and we're not suggesting new strangles at this time. Should BMCH turn lower then you might want to consider a new strangle if shares trade close to $80.00 (within 50-cents). The options we were 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: 1.34
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 376.21 chg: 2.16 stop: n/a

We do not see any change from yesterday's update on CME. 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: 0.31
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 36.85 chg: 0.21 stop: n/a

Homebuilders are trying to bounce today but they seem to be struggling. DHI pared its gains from the highs of the session. 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/$2.65ask.

Picked on November 13 at $ 32.56
Change since picked: 4.29
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 49.38 chg: -0.12 stop: n/a

It looks like the recent rally attempt at FS is already failing although it's worth noting that volume was very low on today's minor decline. We still have less than five weeks left before January options expire. 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 $1.65bid/$1.90ask.

Picked on November 08 at $ 55.37
Change since picked: - 5.99
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 27.91 chg: 0.27 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: - 2.33
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Verifone Holdings - PAY - cls: 24.33 chg: 1.33 stop: n/a

Thursday proved to be a very bullish day for PAY. The stock added 5.78% on above average volume. Unfortunately, we don't see any news or catalyst to explain the rally today. We have less than five weeks before January options expire. 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 $2.10bid/$2.40ask.

Picked on October 12 at $ 19.98
Change since picked: 4.35
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Questar Corp. - STR - close: 79.30 chg: 0.75 stop: n/a

STR is bouncing after yesterday's bearish breakdown. 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: 3.05
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 50.70 chg: -0.30 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: 1.13
Earnings Date 12/15/05 (unconfirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 53.38 chg: 0.46 stop: n/a

VLO out performed most of the oil sector today but then the bar wasn't set very high. 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: 2.88
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

None
 

Dropped Puts

Magna Int. - MGA - close: 69.92 chg: 0.54 stop: 70.31

MGA is just not cooperating. The stock does remain under resistance at its 200-dma and the $70.00 level for now but all the clues suggest that the stock is poised to breakout higher. We would rather exit early and cut our losses.

Picked on December 04 at $ 68.14
Change since picked: 1.78
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 318 thousand
 

Dropped Strangles

None
 

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