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Call Updates

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

Biotech stocks, like most of the market, managed a bounce on Wednesday but near the close shares of biotech companies were trending lower again. BIIB is no exception and its afternoon bounce was starting to fade into tonight's closing bell. We are not suggesting new bullish positions 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 Tuesday'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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Cytec Ind. - CYT - close: 47.64 chg: +0.54 stop: 44.99

CYT bounced from the $47 level with a 1.1% gain. The move today erased yesterday's losses. This looks like a new bullish entry point but we hesitate to initiate new long positions with the major averages still looking vulnerable to more selling. 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: + 0.63
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 333 thousand

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Femsa Fomento - FMX - close: 71.75 chg: -0.63 stop: 67.75

The Mexican stock market lost more than 140 points today (-0.8%) but remains near the recent highs. Meanwhile shares of FMX hit a new three-month high but failed to hold its gains. The stock's weakness today suggest it may pull back and retest short-term support at the 10-dma near 70.84 or even the $70.00 level. 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: + 1.10
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 308 thousand

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Gilead Sciences - GILD - close: 53.40 chg: -0.78 stop: 49.99

Bullish traders may need to turn defensive here with GILD. The stock posted another decline (-1.4%) and shares have now retraced 50% of its December 19th-22nd rally. If GILD trades under the $52.50-53.00 region then more conservative traders may want to consider an early exit. We are not going to suggest new positions at this time. 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.

Picked on December 22 at $ 54.51
Change since picked: - 1.11
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 4.3 million

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Ryland Group - RYL - close: 72.58 change: -0.65 stop: 71.85

The action in RYL is still looking bearish. The stock continues to coil more tightly into a two-week pattern of lower highs against support near $72.00. A breakdown under $72.00 would also be a break in its multi-week trendline of support from the October lows. We would not suggest new plays at this time.

Picked on December 13 at $ 73.96
Change since picked: - 1.38
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Tractor Supply - TSCO - cls: 53.96 chg: +0.79 stop: 52.65

TSCO turned in a decent bounce today adding 1.48%. The retail sector got a bit of a boost after the better than expected consumer confidence number and news that Target (TGT) was reaffirming its December sales expectations. 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: + 1.21
Earnings Date 01/18/06 (unconfirmed)
Average Daily Volume = 428 thousand

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United States Steel - X - close: 48.09 chg: +0.58 stop: 44.65

X is still showing relative strength and added 1.2% on Wednesday. The current bounce from the $45 level is now five days old so it may be time to look for a pull back. A dip into the 46.50-47.00 region might be a new bullish entry point. 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: + 1.04
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 3.8 million

Put Updates

PACCAR Inc. - PCAR - close: 69.94 change: -0.19 stop: 72.51

Yesterday PCAR spent the second half of the trading session churning sideways in a narrow range. That range continued today with PCAR oscillating back and forth across its simple 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: + 0.45
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 838 thousand

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Progressive Corp - PGR - cls: 118.55 chg: +0.36 stop: 121.25

PGR almost hit our trigger today. The stock dipped under support near $118 and hit $117.77 before inching higher again. We remain on the sidelines. 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: 22.95 chg: +0.95 stop: n/a

A better than expected consumer confidence number today and some positive comments from Target (TGT) gave the retail sector a bullish bias. Shares of AEOS out performed many of its peers with an unexpected and unexplained 4.3% rally. The stock appears to have broken out above its simple 50-dma but this may prove to be a bull trap (see chart). The stock has stalled right at its trendline of resistance. 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: - 2.40
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 65.54 chg: -0.08 stop: n/a

ANF produced an intraday bounce from broken resistance, now new support, at the $65.00 level today. 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: + 5.87
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 46.26 chg: +2.75 stop: n/a

Shares of BCSI have produced a potential trend change. the stock added 6.3% on above average volume following yesterday's announcement that BCSI will be added to the S&P smallcap 600 index after the closing bell tomorrow. The stock is now testing resistance in the $46.50 region. 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: + 0.83
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 77.24 chg: -2.50 stop: n/a

BMHC lost more than 3% today on volume stronger than what it's seen over the last few weeks. Today's decline appears to be a breakdown below its short-term trend of support. We are not suggesting new strangle positions at this time. The options in our strangle play 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: - 3.71
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 373.99 chg: -4.71 stop: n/a

CME's intraday high on Tuesday (above $380) produced a new P&F chart buy signal with a projected target of $416. Unfortunately for the bulls there has been no follow through. Instead the short-term technicals are turning more bearish and starting to align with some of the bearish weekly technical indicators. 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: - 1.91
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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D.R.Horton - DHI - close: 36.15 chg: -0.11 stop: n/a

The homebuilders didn't do much today but the action we do see in DHI (and RYL) looks bearish. Shares are trading lower in a two-week trend of lower highs as the stock pushes against support in the $36 region. A breakdown here would also be a breakdown below its eight-week trendline of support. If DHI closes under $36 any time this week then more conservative traders may want to think about exiting early and trying to salvage what they can from this play. 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: + 3.59
Earnings Date 02/15/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Four Seasons - FS - close: 49.30 chg: +0.32 stop: n/a

We do not see any change from our previous updates 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.

Picked on November 08 at $ 55.37
Change since picked: - 6.02
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 28.09 chg: -0.07 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: - 2.15
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Verifone Holdings - PAY - cls: 25.12 chg: -0.79 stop: n/a

PAY continues to see profit taking following last Friday's breakout. The $25.00 level should act as new support - we'll see pretty soon. 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: + 5.14
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Questar Corp. - STR - close: 76.82 chg: +0.92 stop: n/a

Natural gas futures produced a decent bounce today and the natural gas stocks follow suit but shares of STR still look bearish. We do not see any changes from Tuesday's update. 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: + 0.57
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 49.70 chg: -0.30 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: + 0.13
Earnings Date 01/05/06 (confirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 51.87 chg: +0.97 stop: n/a

Oil stocks rebounded somewhat but not as strongly as crude oil prices. VLO still appears stuck inside its two-week bearish trend. 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: + 1.37
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million

Dropped Calls

Chicago Merc. Exhg. - CME - cls: 373.99 chg: -4.71 stop: 372.49

Our aggressive play in CME did not pan out. Yesterday's new bullish P&F chart buy signal may prove to be a bull trap instead. The stock dipped to $371.80 this morning before bouncing and it was enough to hit our stop loss at $372.49. A quick look at the intraday chart shows that CME suffered under the $376 level all day long. Another breakdown under the 50-dma near 369.00 and the stock might look like a bearish candidate instead.

Picked on December 27 at $382.00
Change since picked: - 8.01
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 888 thousand

Dropped Puts

None
 

Dropped Strangles

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