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Call Updates

Biogen Idec - BIIB - close: 47.12 change: -0.15 stop: 43.95

CSFB downgraded BIIB to an "under perform" this morning. The stock reacted by gapping lower and then trading sideways for the rest of the session. The 15-cent loss today is pretty minor and shows relative strength considering the downgrade. A bounce from here could be used as a new bullish entry point. Our target is the $49.85-50.00 range.

Picked on December 27 at $ 46.11
Change since picked: + 1.01
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Cytec Ind. - CYT - close: 48.42 chg: -0.23 stop: 45.95

CYT experienced some minor profit taking today. Watch for a bounce from the $48.00 level, which as broken resistance should be new support, or the 10-dma near 47.70. Our target is the $49.85-50.00 range. More aggressive traders may want to aim higher. The P&F chart points to a $65 target. The biggest challenge to initiating new positions now is the time frame. We do not want to hold positions over the Jan. 19th earnings report (which is currently an unconfirmed date).

Picked on December 22 at $ 47.01
Change since picked: + 1.41
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 333 thousand

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Foster Wheeler - FWLT - close: 38.22 chg: +1.12 stop: 35.49

FWLT continued to show strength today and broke out through the top of its trading range near $38.00. Our trigger to go long calls was at $38.05 so the play is now open. Our target is the $42.00-42.50 range. Currently the P&F chart is very bullish with a $73 target.

chart:

Picked on January 05 at $ 38.05
Change since picked: + 0.17
Earnings Date 03/15/06 (unconfirmed)
Average Daily Volume = 598 thousand

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Gilead Sciences - GILD - close: 56.62 chg: +1.17 stop: 51.99 *new*

GILD was strong today adding more than 2% and hitting a new high over resistance near $56.00. We are raising the stop loss to $51.99. 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: + 2.11
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 4.3 million

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Ipsco Inc. - IPS - close: 83.70 change: -2.65 stop: 79.99

Ouch! IPS hit some profit taking today and lost just over 3% on no news. Volume came in well below its daily average. Today's decline has put a nice bearish kink in the short-term technical oscillators. Watch for a bounce in the $82.50-81.85 range before considering new positions. More conservative traders may want to tighten their stops. Our target is the $89.00-90.00 range. We do not want to hold over the January earnings report.

Picked on December 30 at $ 83.55
Change since picked: + 0.25
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 396 thousand

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Mohawk Ind. - MHK - close: 89.16 change: -0.98 stop: 85.90

Lack of follow through on yesterday's bullish move does not bode very well for MHK. Conservative traders may want to tighten their stops a bit. We would not suggest new bullish positions until MHK trades over $90 again. Our target is the $94.85-95.00 range. We want to exit ahead of its February earnings report.

Picked on January 04 at $ 90.25
Change since picked: - 1.09
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 355 thousand

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Petrochina Co - PTR - close: 84.43 change: -0.62 stop: 79.99

Oil stocks hit some profit taking today and PTR fell 0.7%. The stock spent most of the day consolidating above the $84 level. A bounce from here could be a new entry point but patient traders might consider waiting for a pull back toward the $83 level and buy a bounce there. Our end of February target is the $89.50-90.00 range.

Picked on January 03 at $ 83.50
Change since picked: + 0.93
Earnings Date 03/00/06 (unconfirmed)
Average Daily Volume = 488 thousand

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United States Steel - X - close: 51.18 chg: +1.34 stop: 44.99

X continues to show plenty of relative strength. The stock added 2.6% and is nearing our target in the $52.00-52.50 range. More conservative traders may just want to exit right here! We do not want to hold over the January earnings report.

Picked on December 23 at $ 47.05
Change since picked: + 3.13
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 3.8 million
 

Put Updates

Netease.com - NTES - close: 57.14 chg: -0.96 stop: 58.01

It looks like NTES' recent bounce is failing near the 40-dma and its short-term trend of lower highs. Aggressive traders may want to consider bearish positions here with a stop above today's high. We will wait for NTES to hit our trigger at $54.95. If triggered we'll target a decline into the $50.25-50.00 range. We do not want to hold positions over the February earnings report.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/21/06 (unconfirmed)
Average Daily Volume = 4.2 million

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Progressive Corp - PGR - cls: 117.00 chg: +0.97 stop: 120.05

As expected shares of PGR continued to bounce today. It might be noteworthy that the rally was failing under the $118 level late this afternoon. Volume came in pretty heavy today. Traders might want to consider new bearish positions here but we would wait to see how the markets react to the jobs report tomorrow. Our target is the $110.50-110.00 range but we only have 14 days if the current earnings date is correct. We do not want to hold over the earnings report.

Picked on December 30 at $117.45
Change since picked: - 0.45
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 836 thousand

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Scotts Miracle grow - SMG - cls: 45.95 change: -0.66 stop: 47.55

Good news. SMG's rally appears to be failing. Today's loss puts it back under the $46 level, which was potential support, and put it under the simple 50-dma, which was technical support. This looks like a new bearish entry point to buy puts. Our target is the $41.50-41.25 range. We do not want to hold over the late January earnings report.

Picked on January 01 at $ 45.24
Change since picked: + 0.71
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 354 thousand

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Stryker Corp. - SYK - close: 44.85 chg: -0.52 stop: 46.51

It looks like SYK's oversold bounce is failing near its 10-dma. This might be considered a new bearish entry point but we would wait to see how the market reacts to the jobs report tomorrow. The Point & Figure chart points to a $23.00 target. Our target is the $40.25-40.00 range, near its October lows. We do not want to hold over the January earnings report. That gives us about three weeks, maybe less.

Picked on December 30 at $ 44.29
Change since picked: + 0.56
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 2.1 million
 

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: 24.01 chg: +1.21 stop: n/a

AEOS is moving the wrong way for our strangle position. The stock gapped higher this morning after some positive analyst comments. The rally did stall near its exponential 200-dma but volume was very heavy at more than 9 million shares compared to the daily average of just 3.6 million. We only have a couple weeks left before January options expire. 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 changing our target to breakeven at $2.35.

Picked on November 13 at $ 25.47
Change since picked: - 1.46
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 66.02 chg: +1.02 stop: n/a

ANF issued some bullish news today. The company guided higher for the full year above analysts' estimates. ANF also announced that December sales rose 41% and its same-store sales jumped a whopping 29%. The stock gapped higher to hit $68 before fading back to fill the gap. Volume came in very strong. The January $65 calls (ANF-AM) hit a high of $4.20 today but closed at $2.40ask/$2.50bid. We have about two weeks left before January options expire. We are adjusting our target to breakeven at $5.15. 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).

Picked on November 13 at $ 59.67
Change since picked: + 6.35
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 41.29 chg: +1.30 stop: n/a

BCSI got an upgrade this morning and the news helped fuel a bit of an oversold bounce today. The rally failed to breakout over short-term resistance near $42.00. More conservative traders may want to exit early right here to reduce their losses. We only have two weeks left before January options expire. We're adjusting our target to breakeven at $3.25. Our current play involves the January $50 call and the January $40 put.

Picked on December 04 at $ 45.43
Change since picked: - 4.14
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 75.02 chg: +1.58 stop: n/a

The rebound continues in shares of BMHC and the stock has now closed back above the 200-dma. 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: - 5.93
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 364.00 chg: +6.20 stop: n/a

CME produced a bit of an oversold bounce today. There are two weeks left before January options expire. We are adjusting our target to breakeven at $26.70. That means CME needs to trade well above $400 or under $350 if we're going to hit our new target. We are not suggesting new positions. Our current play involves the January $400 calls (CMJ-AK) and the January $350 puts (CMJ-MA).

Picked on November 20 at $375.90
Change since picked: -11.90
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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Four Seasons - FS - close: 54.96 chg: +2.62 stop: n/a

It looks like game over for the strangle play. FS continued to rally adding 5% in what was probably a short squeeze. We certainly can't find any news to account for the big rally and big volume. We have about two weeks left before January options expire. The options in our strangle were the January $60 calls (FS-AL) and the January $50 puts (FS-MJ). We have adjusted our target to breakeven at $2.60.

Picked on November 08 at $ 55.37
Change since picked: - 0.41
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 29.25 chg: -0.48 stop: n/a

We see no change from Wednesday's update. 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). We have lowered our target to breakeven at $1.60.

Picked on November 06 at $ 30.24
Change since picked: - 0.99
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Verifone Holdings - PAY - cls: 26.06 chg: +0.16 stop: n/a

We see no change from our weekend update on PAY. Our cost for the January strangle was about $2.60. Currently the PAY-AX Jan. $22.50 calls are trading at $3.50bid/$3.60 ask. Our target is for a rise to $4.50. We only have about two weeks left before January options expire.

Picked on October 12 at $ 19.98
Change since picked: + 6.08
Earnings Date 12/01/05 (confirmed)
Average Daily Volume = 259 thousand

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Questar Corp. - STR - close: 79.12 chg: -0.34 stop: n/a

We do not see any change from our previous updates. We only have about two weeks left before January options expire and to see this play even breakeven we'd need to see a rally towards $85 or a decline towards $65. We are adjusting our target to breakeven at $5.10. Our strangle involves the January $80 calls (STR-AP) and the January $70 puts (STR-MN).

Picked on November 20 at $ 76.25
Change since picked: + 2.87
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 51.05 chg: +0.02 stop: n/a

Unfortunately, today's action in TXI is bad news. The company reported earnings today. The results beat estimates by 12 cents. The initial move in the stock price was a spike higher to $53.75 but it quickly failed. The lack of a rally is pretty odd for a company who said that demand was out pacing supply for their product. Again, the lack of a move on the earnings news puts our strangle in deep trouble. We are not suggesting new plays. 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 and we are adjusting our target to breakeven at $2.70.

Picked on November 27 at $ 49.57
Change since picked: + 1.48
Earnings Date 01/05/06 (confirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 54.77 chg: -0.14 stop: n/a

We do not see any change from our previous updates on VLO. January options are set to expire in less than three weeks. If this play is going to score we need to see VLO trade well over $55 or under $45 before expiration. Our target is set to breakeven at $2.93.

Picked on November 21 at $ 50.50
Change since picked: + 4.27
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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