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Call Updates

Apollo Group - APOL - close: 62.13 change: -0.57 stop: 59.95

Uh-oh! Some bad news today in APOL has us reconsidering bullish positions. The company tried to put a positive spin on its appointment of a new president after its former president resigned. Wall Street tends to react negatively to unexpected management changes. More conservative traders may want to exit here. We're going to hold on to the play to see if APOL will bounce from its 10-dma near 61.40. We are not suggesting new positions. 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: - 0.27
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Biogen Idec - BIIB - close: 47.53 change: -0.43 stop: 44.45

Biotech stocks were mostly lower today. After six gains in a row for the BTK biotech index the BTK fell 0.6% sparked by selling in Genentech (DNA). DNA reported earnings last night that produced some sell the news movement today. BIIB is still consolidating under the $48.50 region and might dip to its 10-dma near 46.65. We are not suggesting new plays at this time. Our target for BIIB is the $49.85-50.00 range.

Picked on December 27 at $ 46.11
Change since picked: + 1.46
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 3.2 million

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Caterpillar - CAT - close: 61.33 change: +0.03 stop: 56.95

Shares of CAT traded sideways on Wednesday. We see no change from our previous updates. 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: + 0.88
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 4.0 million

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Gilead Sciences - GILD - close: 56.93 chg: -0.16 stop: 54.51

GILD spent most of the session trading sideways. Bulls should be okay as long as GILD remains above what should be support at the $56 level. Although it is arguable that the $55 level also offers some support. We are not suggesting new positions right here. We do not want to hold over GILD's mid January earnings report. Our target is the $59.00-60.00 range.

Picked on December 22 at $ 54.51
Change since picked: + 2.42
Earnings Date 01/17/06 (unconfirmed)
Average Daily Volume = 4.3 million

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Goldman Sachs - GS - close: 131.97 chg: -0.06 stop: 127.45

The broker-dealer index continues to hit new highs. Yet shares of GS have seen their rally stall. We would expect GS to dip back to the $130 level. A bounce from $130 could be used as a new bullish entry point. 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: + 1.92
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Holly Corp. - HOC - close: 63.92 chg: -0.72 stop: 59.95

HOC is a new play from the Tuesday night newsletter. We do not see any change from our original play description. Our strategy involves a trigger to buy calls at $65.65, which would be a breakout to a new high and a new P&F buy signal (over $65.00). If triggered we'll target a quick rally into the $69.75-70.00 range before the company's early February earnings report. We do not want to hold over the earnings report.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/06/06 (unconfirmed)
Average Daily Volume = 303 thousand

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Lehman Brothers - LEH - close: 134.65 chg: +2.97 stop: 127.90*new*

LEH is leading the broker-dealer sector higher. The stock vaulted upward this morning and broke out to new all-time highs. Volume came in above average, which is bullish. We are raising our stop loss to $127.90. Our target is the $138.50-140.00 range over the next several weeks.

Picked on January 09 at $131.05
Change since picked: + 3.60
Earnings Date 03/14/06 (unconfirmed)
Average Daily Volume = 2.3 million

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Ipsco Inc. - IPS - close: 83.72 change: -0.03 stop: 81.45

Bullish traders need to be very careful here. IPS may have only lost 3 cents today but the action looks pretty bearish. The stock rallied just high enough to fill the gap from Tuesday morning and then turn lower. It looks like shares of IPS are poised to turn even lower. Until the trend breaks we're going to keep the play alive. We are not suggesting new positions. More conservative traders may just want to exit early. 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: + 0.17
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 396 thousand

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Lennar Corp. - LEN - close: 65.95 chg: +0.04 stop: 59.99

Shares of LEN consolidated sideways in a narrow range on Wednesday. We don't see any change from our previous updates. If there is any profit taking we'd watch for the $64.00-64.50 region to act as support. Our target now is the $69.50-70.00 range before February options expire.

Picked on January 09 at $ 64.01
Change since picked: + 1.94
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Mohawk Ind. - MHK - close: 88.51 change: -1.29 stop: 86.90 *new*

MHK was weak today losing 1.4% on no news. This failed rally at the $90.00 level does not look like good news for the bulls. We are not suggesting new positions and more conservative traders may want to exit early right here. We are going to raise our stop to $86.90 in an effort to reduce our risk.

Picked on January 04 at $ 90.25
Change since picked: - 1.74
Earnings Date 02/02/06 (unconfirmed)
Average Daily Volume = 355 thousand

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Petrochina Co - PTR - close: 89.05 change: +1.78 stop: 83.50

Double check those exit orders. PTR has almost reached our target in the $89.50-90.00 range. The stock added another 2% today on strong volume. More conservative traders may want to seriously consider just exiting right here for a gain.

Picked on January 03 at $ 83.50
Change since picked: + 5.55
Earnings Date 03/00/06 (unconfirmed)
Average Daily Volume = 488 thousand
 

Put Updates

Progressive Corp - PGR - cls: 118.06 chg: -0.50 stop: 119.15*new*

We still believe that bears are the ones at risk here. PGR has been trying to bounce for a week now and today's action produced another intraday rebound from its lows. More conservative traders may just want to bail out right now. We are choosing to keep the play open only because the major stock averages are short-term overbought and due for a decline. However, we will try and reduce our risk by lowering the stop loss to $119.15. We are not suggesting new positions.

Picked on December 30 at $117.45
Change since picked: + 0.61
Earnings Date 01/18/06 (confirmed)
Average Daily Volume = 836 thousand

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Scotts Miracle grow - SMG - cls: 46.75 che: +0.00 stop: 47.05

SMG did not move much today and closed unchanged. We don't see any change from our previous update. More conservative traders may want to exit early to avoid further losses.

Picked on January 01 at $ 45.24
Change since picked: + 1.51
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: 25.55 chg: +0.94 stop: n/a

AEOS produced a very strong rally today adding 3.8% and breaking out over its exponential 200-dma. This is bad news for our strangle play unless AEOS can rally over $27.50 before the end of next week. For this strangle play to have a chance at exiting at breakeven or better then AEOS needs to trade above $29.50 or under $20.00. 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 have changed our target to breakeven at $2.35.

Picked on November 13 at $ 25.47
Change since picked: + 0.08
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 67.50 chg: +0.54 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: + 7.83
Earnings Date 11/15/05 (confirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 42.30 chg: +0.94 stop: n/a

BCSI got a bounce today after an analyst started coverage on the stock with a "buy" rating. 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: - 3.13
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 78.99 chg: -1.34 stop: n/a

BMHC's rally has stalled under its three-month trendline of resistance. 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: - 2.06
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 386.00 chg: +6.46 stop: n/a

We are running out of time. There are less than 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: +10.10
Earnings Date 01/24/06 (unconfirmed)
Average Daily Volume = 879 thousand

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Encana Corp. - ECA - close: 45.40 chg: -0.16 stop: n/a

Perfect! ECA pulled back and gave us another opportunity to open strangle positions at the $45.00 level. We're suggesting opening strangle positions in the $44.00-46.00 range. We would prefer to open new positions in the $45.25-44.75 region. We are using the April $50 calls and the April $40 puts. Our estimated cost is $3.45. At current prices that means we're betting that ECA will be trading under $36.50 or over $53.50 by April option expiration.

Picked on January 10 at $ 45.56
Change since picked: - 0.16
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 4.4 million

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Four Seasons - FS - close: 55.38 chg: +0.96 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: + 0.01
Earnings Date 11/10/05 (confirmed)
Average Daily Volume = 319 thousand

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Lear Corp - LEA - close: 25.71 chg: -2.53 stop: n/a

Today's action in LEA is very welcome. The stock lost almost 9% on volume more than four times the daily average, which is very bearish. Investors were not happy to hear that LEA is going to take a $342 million charge or write down for goodwill in the fourth quarter. We have less than 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: - 4.53
Earnings Date 01/25/06 (confirmed)
Average Daily Volume = 1.8 million

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Questar Corp. - STR - close: 80.25 chg: -0.26 stop: n/a

We are not suggesting new positions. Time is quickly running out. 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: + 4.00
Earnings Date 01/26/05 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 53.96 chg: -0.43 stop: n/a

The new rally in TXI has paused. We don't see any change from our previous updates. 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 target has been reduced to breakeven at $2.70. A move into the $57-58 range might be enough to get our strangle there.

Picked on November 27 at $ 49.57
Change since picked: + 4.39
Earnings Date 01/05/06 (confirmed)
Average Daily Volume = 354 thousand
 

Dropped Calls

Cytec Ind. - CYT - close: 47.18 chg: -0.82 stop: 45.95

The relative weakness in CYT is picking up speed. We see today's decline as the forerunner to a breakdown of its bullish trend. If you're feeling optimistic CYT does still have some support at the $47.00 level. You might want to hold on for another day or two and see if CYT bounces from $47.00 but we would tighten stops if you do hold on. We are choosing to exit early! We would not hold over its earnings report.

Picked on December 22 at $ 47.01
Change since picked: + 0.17
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume = 333 thousand

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Foster Wheeler - FWLT - close: 43.11 chg: +2.14 stop: 37.75

Target achieved. FWLT continues to show great relative strength. The stock added 5.2% today on volume more than three times the daily average. Our target was a rally into the $42.00-42.50 range. The move was fueled by news for FWLT. The company announced it had won a $200 million contract to build the world's largest CFB boiler island in Poland.

Picked on January 05 at $ 38.05
Change since picked: + 5.06
Earnings Date 03/15/06 (unconfirmed)
Average Daily Volume = 598 thousand
 

Dropped Puts

None
 

Dropped Strangles

None

 

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