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Call Updates

Apple Computer - AAPL - close: 76.30 chg: +1.92 stop: 69.99

A downgrade for IBM slowed the advance in hardware stocks today. Shares of AAPL slipped 25-cents but probably on news of Google's plans to launch an online video store. In other news Chrysler announced that most of its 2006 models would include iPod-friendly electronics so users can listen to their iPod over the car's speakers. We remain bullish on AAPL but there is a chance for some profit taking. We would still consider new call positions here but a bounce from $75 would also work well. We do not want to hold over the earnings report. The report is coming up quick on January 18th and that doesn't give us much time.

Picked on January 08 at $ 76.30
Change since picked: - 0.25
Earnings Date 01/18/06 (confirmed)
Average Daily Volume = 25.5 million

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Apollo Group - APOL - close: 62.81 change: +0.41 stop: 59.95

APOL did continue to rally but the rally seemed to stall this morning and shares consolidated sideways for most of the session. We don't see any changes from our weekend play description and remain bullish. Our target is going to be the $67.00-68.00 range. If APOL fails to push past the $63.50 level in the next several days we'll probably pull the plug early.

Picked on January 08 at $ 62.40
Change since picked: + 0.41
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Biogen Idec - BIIB - close: 47.59 change: +0.41 stop: 44.45

In the news today BIIB reported that its Phase II study on oral compound BG-12 for use with patients in relapsing-remitting multiple sclerosis met its primary endpoint (a.k.a. its target). BIIB also announced that it would report earnings on February 15th after the closing bell. Shares of BIIB did tick higher today but remain under minor resistance near $48.30. Wednesday could be a volatile day for BIIB. Larger rival Genentech (DNA) is expected to report earnings after the closing bell on Tuesday. Our target is the $49.85-50.00 range.

Picked on December 27 at $ 46.11
Change since picked: + 1.48
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 3.2 million

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Caterpillar - CAT - close: 61.55 change: +1.10 stop: 56.95

CAT produced a nice follow through on Friday's breakout today. The stock added 1.8% on slightly above average volume. We remain bullish and see no change from our weekend play description. Our target is the $64.75-65.00 range. We do not want to hold over the late January earnings report so we have just less than three weeks.

Picked on January 08 at $ 60.45
Change since picked: + 1.10
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 4.0 million

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Cytec Ind. - CYT - close: 48.01 chg: -0.28 stop: 45.95

Over the weekend we discussed CYT's relative weakness and the stock continues to show relative weakness today. We would expect shares to dip toward the $47.00-47.50 level given the current short-term pattern and the above average volume on today's decline. We would not suggest new plays at this time but watch for a bounce from the $47 level. 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. FYI - in the news today CYT announced that it would report earnings on February 9th after the closing bell.

Picked on December 22 at $ 47.01
Change since picked: + 1.00
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume = 333 thousand

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Foster Wheeler - FWLT - close: 39.52 chg: +0.56 stop: 35.49

The bullish breakout continues in shares of FWLT. The stock added another 1.4% and the stock is nearing what will probably be short-term, round-number resistance near $40.00. We would expect a pull back, potentially back to the $38 level. Our target is the $42.00-42.50 range.

Picked on January 05 at $ 38.05
Change since picked: + 1.47
Earnings Date 03/15/06 (unconfirmed)
Average Daily Volume = 598 thousand

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Gilead Sciences - GILD - close: 57.91 chg: +0.88 stop: 54.51*new*

Shares of GILD vaulted higher at the open but traded off its best levels of the session. The stock almost hit our target in the $59.00-60.00 range. The news today is positive. GILD and BMY reported that their latest study showed positive results at combining their two HIV treatments together. The AP article said the companies plan to file an application for the new tablet with the FDA between April and June. We do not want to hold over GILD's mid January earnings report. We are going to raise our stop loss to breakeven at $54.51.

Picked on December 22 at $ 54.51
Change since picked: + 3.40
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 4.3 million

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Goldman Sachs - GS - close: 130.39 chg: +1.55 stop: 125.59

The broker-dealer stocks rose again. The group was boosted by some upgrades and positive comments issued by Prudential this morning. Shares of GS added 1.2% and broke out over resistance at the $130.00 level. Our trigger to buy calls was at $130.05 so the play is now open. Our target is the $134.80-135.00 range. More aggressive traders might want to aim higher.

Picked on January 09 at $130.05
Change since picked: + 0.34
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Lehman Brothers - LEH - close: 131.39 chg: +1.15 stop: 125.90

We have been triggered in shares of LEH as well. The stock added 0.88% as investors poured more money into the group. LEH confirmed its breakout over the $130 region and hit our trigger to buy calls at $131.05. The MACD indicator has produced a new buy signal. Our target is the $138.50-140.00 range over the next several weeks.

Picked on January 09 at $131.05
Change since picked: + 0.34
Earnings Date 03/14/06 (unconfirmed)
Average Daily Volume = 2.3 million

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Ipsco Inc. - IPS - close: 84.98 change: +0.08 stop: 79.99

Traders bought the dip again. IPS fell lower this morning but bounced at its rising 10-dma. We do not see any change from our weekend update. We do not want to hold over the earnings report. Our target is the $89.00-90.00 range.

Picked on December 30 at $ 83.55
Change since picked: + 1.53
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 396 thousand

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Lennar Corp. - LEN - close: 65.24 chg: +2.62 stop: 59.99

The homebuilders were the best performing sector today. The DJUSHB index rose more than 5.6% after multiple positive reports from the analyst community hit the wires today. Analysts are still expecting double-digit growth in sales for the sector. Shares of LEN rose more than 4% and broke out over resistance at the $64.00 level. Our trigger to buy calls was at $64.01. Our target now is the $69.50-70.00 range before February options expire.

Picked on January 09 at $ 64.01
Change since picked: + 1.23
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Mohawk Ind. - MHK - close: 89.50 change: +0.94 stop: 85.90

MHK provides flooring and carpet so the positive report for the homebuilders today is good news for MHK too. The stock continued Friday's afternoon bounce and added just over 1%. This looks like a new bullish entry point to buy calls. More conservative traders may want to wait for another move over $90 or even $91 before considering new bullish positions. Our target is the $94.85-95.00 range.

Picked on January 04 at $ 90.25
Change since picked: - 0.75
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 355 thousand

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Petrochina Co - PTR - close: 87.50 change: +1.75 stop: 83.50 *new*

The oil sector turned in a bit of a mixed performance with the decline in crude oil futures today. That didn't stall shares of PTR, which gapped higher, and added more than 2% by the closing bell. The move was probably fueled by news that PTR's crude output rose 1.2% in 2005. Investors are also responding to news today that China raised its official annual GDP estimates for the past decade and there is probably some enthusiasm for their final 2005 growth numbers due out in a few weeks. More conservative traders may want to consider exiting for a gain right here. We're going to hold on and aim for our target in the $89.50-90.00 range. We will raise our stop loss to breakeven at $83.50.

Picked on January 03 at $ 83.50
Change since picked: + 4.00
Earnings Date 03/00/06 (unconfirmed)
Average Daily Volume = 488 thousand

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Sears Holding - SHLD - close: 122.70 change: +3.24 stop: 114.99

It was a big day for shares of SHLD. The stock added 2.7% and quickly rallied through the $120 level this morning. Our trigger to buy calls was at $120.05 so the play is now open. The rally stalled right at its declining 100-dma. This might suggest a pause and maybe a dip back toward $120, which could be used as a new entry point. However, the intraday chart today shows a strong rebound from the afternoon lows so there may not be any pull back. Our target is the $124.90-125.00 range.

Picked on January 09 at $120.05
Change since picked: + 2.65
Earnings Date 03/07/06 (unconfirmed)
Average Daily Volume = 2.7 million
 

Put Updates

Progressive Corp - PGR - cls: 118.83 chg: +2.57 stop: 120.05

Uh-oh! New multi-year highs for the major averages and a breakout over 11,000 in the DJIA may be spooking the bears in PGR. The stock staged a 2.2% bounce today. More conservative traders may want to bail out early even though the stock should still have resistance at the $120 level. We are not suggesting new positions.

Picked on December 30 at $117.45
Change since picked: + 1.38
Earnings Date 01/18/06 (confirmed)
Average Daily Volume = 836 thousand

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Scotts Miracle grow - SMG - cls: 46.45 change: -0.28 stop: 47.55

SMG is still trading under the $47 level. We don't see any change from our weekend update. We are not suggesting new positions. More conservative traders may just want to exit early right here or tighten their stop closer to the $47 level.

Picked on January 01 at $ 45.24
Change since picked: + 1.21
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 354 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: 24.29 chg: +0.20 stop: n/a

We do not see any change from our weekend update. Time is running out. We have two weeks left before January options expire. For this strangle play to have a chance at exiting at breakeven or better then AEOS needs to trade above $27.50 or under $22.50. We are 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: - 1.18
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 66.66 chg: +0.28 stop: n/a

We do not see any change from our weekend update. Time is running out. We have two weeks left before January options expire. Currently ANF is trading over the $65 strike but not by much. We need to see the stock make a run for the $70 level if we want to exit near breakeven. We are not suggesting new plays at this time. The options in our strangle are the January $65 calls (ANF-AM) and the January $55 puts (ANF-MK). Our target has been adjusted to breakeven at $5.15.

Picked on November 13 at $ 59.67
Change since picked: + 6.99
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 42.60 chg: +0.85 stop: n/a

We only have two weeks left and BCSI needs to trade under $39 or well over $50 if we are going to be able to exit at breakeven. Last week we adjusted our target to breakeven at $3.25. We are not suggesting new plays. Our current play involves the January $50 call and the January $40 put.

Picked on December 04 at $ 45.43
Change since picked: - 2.83
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 78.56 chg: +2.13 stop: n/a

BMHC is still bouncing with a vengeance. The stock added 2.7% today on above average volume. 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: - 2.39
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 381.00 chg: +6.05 stop: n/a

CME hit a new five-week high today as it cleared the December peak. We are running out of time. There are only two weeks left before January options expire. At the moment if we have any hope of exiting near breakeven we need to see CME trade under $340 or above $410 and do it pretty quickly. Odds of that happening don't seem very high at the moment. We are not suggesting new plays. 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: + 5.10
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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Four Seasons - FS - close: 54.53 chg: -0.01 stop: n/a

We have nothing new to report on for FS. Last week's breakout over its 50-dma and its multi-month trendline of resistance and lower highs has all but killed this strangle play. We have 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: - 0.84
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 29.54 chg: +0.20 stop: n/a

We are a little surprised that enthusiasm for the carmakers today did not translate into strength for LEA. Shares remain under the $30.00 level but look poised to move higher. We have two weeks left before January options expire. If we have any hope of exiting near breakeven then LEA needs to trade over $35 or under $25 pretty soon. 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: - 0.70
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Questar Corp. - STR - close: 80.23 chg: +0.72 stop: n/a

Forecasts for warm weather in the northeast are pulling natural gas futures lower. This may be impeding any bounce attempt in STR but shares did close over the $80 level today. We have adjusted 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: + 3.98
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 52.74 chg: +1.69 stop: n/a

Hmm... we can't find any news to explain the huge surge in volume today, which came in at 4.8 times the norm. The stock added 3.3% but remains inside its trading range. We don't see any other changes from our weekend update. 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 have adjusted our target to breakeven on the slim chance that TXI does produce a move.

Picked on November 27 at $ 49.57
Change since picked: + 3.17
Earnings Date 01/05/06 (confirmed)
Average Daily Volume = 354 thousand

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Valero Energy - VLO - close: 56.25 chg: +0.36 stop: n/a

Oil stocks were mixed given the decline in crude oil prices today. VLO still added 0.6%. We don't see any change from our weekend update. We are not suggesting new plays at this time. We only have two weeks left before January options expire. Our target has been adjusted to breakeven at $2.93. The options in our strangle are the January $45 puts (VLO-MI) and the January $55 calls (VLO-AK)(both post-split).

Picked on November 21 at $ 50.50
Change since picked: + 5.75
Earnings Date 01/30/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Dropped Calls

None
 

Dropped Puts

Netease.com - NTES - close: 67.10 chg: +8.22 stop: 58.01

The action in NTES today looks like a short-squeeze. A positive analyst report appears to have sparked the rally and shares blew past resistance at $60.00, $65.00 and its 50 and 200-dma's. If shares pull back readers may want to consider bullish positions. We were never triggered (54.95) for a put play so we're dropping NTES as a candidate with the play unopened.

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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Stryker Corp. - SYK - close: 47.04 chg: +1.90 stop: 46.51

We have been stopped out in SYK at $46.51. The stock produced a big move today adding 4.2% but we can't see any news to account for it - at least not any news for SYK. A move over the 200-dma near $48 would be bullish.

Picked on December 30 at $ 44.29
Change since picked: + 2.75
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 2.1 million
 

Dropped Strangles

None
 

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