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Call Updates

Biogen Idec - BIIB - close: 44.92 change: -0.60 stop: 43.45

The BIIB has been opened. This morning's market strength helped propel shares of BIIB through significant resistance at the $46.00 mark. The stock hit a high of $46.72. Our trigger to buy calls was at $46.11 so the play is open. Unfortunately, the market's rally reversed course as did the rally in shares of BIIB. That makes today's move look like a bull-trap pattern. We are not suggesting new bullish plays at this time. More conservative traders may want to tighten their stop loss toward the $44 level. We're going to leave ours at $43.45 for now. Wait for another move over $46.50 or today's high at $46.72 before considering new bullish positions. Currently our target is the $49.85-50.00 range. We do not want to hold over BIIB's late January earnings report.

Picked on December 27 at $ 46.11
Change since picked: - 1.19
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Chicago Merc. Exhg. - CME - cls: 378.70 chg: -1.05 stop: 372.49

CME showed the same early morning strength that the major averages did. The stock also turned lower and failed to hold any of its gains. This failed rally pattern does not bode well and we would not suggest new bullish positions at this time. Unfortunately, we were not more specific with our suggested entry point. The stock gapped up this morning to open at $382.00 so our trigger at $380.55 to buy calls would have immediately filled us. More conservative traders may want to tighten their stops toward the $375 region to reduce their exposure. The bad news is that CME is so volatile that shares could dip to $370 or even $368 near its 50-dma before rebounding higher again. As we expected the move over $380 produced a new triple-top breakout buy signal on the P&F chart that now points to a $416 target.

Picked on December 27 at $382.00
Change since picked: - 3.30
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 888 thousand

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Cytec Ind. - CYT - close: 47.10 chg: -0.45 stop: 44.99

CYT pulled back with the rest of the market today. The stock lost 0.9% and we suspect it will continue to dip until it has retested support in the $46.60-47.00 region. Wait for a bounce before considering new long positions. The P&F chart points to a $65.00 target. Our target is a modest move into the $49.85-50.00 range.

Picked on December 22 at $ 47.01
Change since picked: + 0.09
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 333 thousand

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Femsa Fomento - FMX - close: 72.38 chg: +0.22 stop: 67.75

FMX continues to inch higher and looks ready to set a new three-month high soon. We do not see any change from our weekend update. We are only looking for a move into the $74.75-75.00 range so it may not be wise to initiate new positions right here. Look for a dip back into the $70.50-71.00 region before considering new call positions.

Picked on December 19 at $ 70.65
Change since picked: + 1.73
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 308 thousand

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Gilead Sciences - GILD - close: 54.18 chg: -0.38 stop: 49.99

The BTK biotech index hit a new multi-year high today but like the rest of the market the BTK could not hold its gains. Shares of GILD also experienced some profit taking with a 0.6% decline. In the news GILD announced that its Board had approved the repatriation of $280 million in foreign earnings. So far shares of GILD are still holding the $54 level but given the weakness in the markets we would hesitate to initiate new positions right now. The P&F chart points to a $66 target. Our target is the $59.00-60.00 range. We do not want to hold over GILD's mid January earnings report. That doesn't give us much time (maybe three weeks) before we have to exit.

Picked on December 22 at $ 54.51
Change since picked: - 0.33
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 4.3 million

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Ryland Group - RYL - close: 73.23 change: +0.21 stop: 71.85

Homebuilding stocks were one of the very few sectors that closed in the green today. While we aren't complaining about the relative strength the move in RYL on Tuesday isn't very inspiring. The stock traded sideways in a narrow range most of the session. Plus, RYL remains near its rising trendline of support. A breakdown could be bad news indeed. We would not consider new bullish positions until RYL traded over $74.70 or even the $75.00 mark.

Picked on December 13 at $ 73.96
Change since picked: - 0.53
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Tractor Supply - TSCO - cls: 53.17 chg: -0.83 stop: 52.65

There was a positive upswing for retailers early on today but the strength didn't last long. Shares of TSCO barely participated at all and were weak for most of the session. We are not suggesting new bullish positions at this time. Our target is the $57.00-58.00 range. The Point & Figure chart still points to an $87 target.

Picked on November 30 at $ 52.75
Change since picked: + 0.42
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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United States Steel - X - close: 47.51 chg: +0.01 stop: 44.65

It wasn't much but X's close in the green today is a sign of strength. Unfortunately, the stock's intraday chart suggest that if the major averages continue lower then X will follow suit and probably retest the $46 level and maybe the $45 level. Readers may want to wait and watch for a day or two before considering new positions. Our late January target is the $52.00-52.50 range. The Point & Figure chart for X points to an $86 target. We do not want to hold over the January earnings report.

Picked on December 23 at $ 47.05
Change since picked: + 0.46
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 3.8 million

Put Updates

PACCAR Inc. - PCAR - close: 70.13 change: -0.47 stop: 72.51

PCAR failed to rally past the $71.50 level again this morning and the stock is once again testing the $70 level and its 200-dma. We don't see any changes from our weekend update. Our target is the $65.25-65.00 range.

Picked on December 20 at $ 69.49
Change since picked: + 0.64
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 838 thousand

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Progressive Corp - PGR - cls: 118.19 chg: -1.08 stop: 121.25

Heads up! PGR is closing in on our trigger to buy puts. The stock's failed rally this morning is also a lower high and the 0.9% decline managed to breakdown under PGR's simple 50-dma. Shares are now nearing short-term support near the $118 level. Our strategy involves a trigger to buy puts at $117.45, which is under current support near $118. 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.

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: 22.00 chg: -0.02 stop: n/a

We do not see any change from our weekend update on AEOS. More conservative traders may have to decide to cut their losses here and move on. We hesitate to exit early because our bias for January is growing more bearish. 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.

Picked on November 13 at $ 25.47
Change since picked: - 3.35
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 65.62 chg: +0.64 stop: n/a

ANF displayed some impressive relative strength today with a 0.98% gain and a more convincing breakout over resistance at the $65.00 level. 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: + 5.95
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 43.51 chg: -0.29 stop: n/a

We do not see any changes from our weekend update for BCSI. In the news today Standard & Poor's said that BCSI will replace VRTY in the S&P smallcap 600 index after the close of trading this coming Thursday. That event could put a bullish bias in the stock as funds who try and mirror the smallcap index buy shares of BCSI. At this time we are not suggesting new plays. FYI: currently the Point & Figure chart for BCSI is pretty bearish with a $27 target. 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 four weeks left before January options expire.

Picked on December 04 at $ 45.43
Change since picked: - 1.92
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 79.74 chg: -1.10 stop: n/a

We do not see any change from our weekend update on BMHC. 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: - 1.21
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 378.70 chg: -1.05 stop: n/a

We do not see any changes for our CME strangle play. We only have four weeks left before January options expire. 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: + 2.80
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 36.26 chg: +0.05 stop: n/a

Homebuilders were some of the best performers today but that isn't saying much. Shares of DHI failed to hold on to most of its gains and continues to consolidate sideways with a precarious grip no support near $36.00. We only have four weeks left before January options expire. 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.

Picked on November 13 at $ 32.56
Change since picked: + 3.70
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 49.03 chg: -0.89 stop: n/a

FS produced yet another failed rally. This time the stock lost 1.78% and looks poised to challenge the recent lows. 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.

Picked on November 08 at $ 55.37
Change since picked: - 6.34
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 28.16 chg: -0.37 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. We are lowering our target to $1.60. We have about four weeks left before January options expire.

Picked on November 06 at $ 30.24
Change since picked: - 2.08
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Verifone Holdings - PAY - cls: 25.91 chg: -0.86 stop: n/a

We do not see any change from our weekend update on PAY. We have less than four 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.

Picked on October 12 at $ 19.98
Change since picked: + 5.93
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Questar Corp. - STR - close: 75.90 chg: -2.90 stop: n/a

A warm weather forecast from the weather service pushed natural gas prices lower and shares of STR responded in king with a 3.6% loss today. This is a technical breakdown below support at $78 and its 50-dma. More conservative traders may want to abandon this play right here and try to salvage some of their trading capital. We do not have a lot of confidence that STR will trade under the $70 level, which is bolstered by its rising 200-dma. 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. We only have four weeks left before January options expire.

Picked on November 20 at $ 76.25
Change since picked: - 0.35
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 50.00 chg: -1.00 stop: n/a

Unfortunately we have nothing new to report on for TXI. The stock is still a lame duck with shares churning sideways between $45 and $53 over the last ten weeks. Hopefully the earnings report expected on January 5th will produce enough volatility for us to exit near breakeven or even score a potential gain. 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: + 0.43
Earnings Date 01/05/06 (confirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 50.90 chg: -1.93 stop: n/a

VLO turned lower with today's sector wide sell-off in energy. The stock is testing support near its 50-dma and could end up testing the $50.00 mark soon. Today's decline doesn't help our concern that VLO may end up being stuck in a trading range between $45 and $56. We only have about four weeks left before January options expire. More conservative traders may want to think about exiting early to cut their losses. 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: + 0.40
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million

Dropped Calls

Apache - APA - close: 67.54 change: -2.77 stop: 67.99

The energy sector was weak across the board. Crude oil was lower but natural gas really lead the declines today. A new report from the weather service suggested that warmer weather would translate into less demand for heating oil/gas in the next couple of weeks. Weakness in the commodity prices played out in stocks and the OIX oil index lost 2.8% to breakdown under its simple 50-dma. The OSX oil services index lost more than 3% and looks poised for more selling. The XNG natural gas index fell 2.6% and closed under support at the 400 level. Meanwhile shares of APA dipped to $66.43 and closed with a 3.9% decline, which proved to be a significant breakdown below its multi-week trendline of support. We would have been stopped out at $67.99.

Picked on December 08 at $ 70.98
Change since picked: - 3.44
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Kerr Mcgee - KMG - close: 89.21 chg: -2.96 stop: 88.99

KMG could not escape the sell-off across the energy sector today. The stock gapped lower to open at $91.10 and then dripped to $88.58 near its 100-dma. We have been stopped out at $88.99.

Picked on December 02 at $ 90.26
Change since picked: - 1.05
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Questar Corp - STR - close: 75.90 chg: -2.90 stop: 77.85

Natural gas stocks were some of the worst performers on Tuesday after the commodity gapped lower at the open. The turn lower for natural gas was fueled by a recent report from the weather service forecasting warmer temperatures and thus less demand for heating fuel. Shares of STR broke down under support near $78.00 and its 50-dma to close with a 3.6% decline. We've been stopped out at $77.85.

Picked on December 13 at $ 80.85
Change since picked: - 4.95
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 752 thousand

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Total S.A. - TOT - close: 125.86 change: -1.98 stop: 126.49

TOT is another casualty of the energy sector sell-off. The stock broke down under technical support at its 50-dma and the bottom of its recent trading range. We've been stopped out at $126.49.

Picked on December 13 at $130.25
Change since picked: - 4.39
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 936 thousand

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Valero Energy - VLO - close: 50.90 chg: -1.93 stop: 50.90

Refining stocks were not immune to the energy sector sell-off. As a matter of fact they were some of the worst performers. Shares of VLO dipped to $50.62 and closed with a 3.6%. We've been stopped out at $50.90.

Picked on December 08 at $ 53.28 (split adjusted)
Change since picked: - 2.38
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 9.8 million

Dropped Puts

None
 

Dropped Strangles

None
 

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