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Call Updates

Biogen Idec - BIIB - close: 45.92 change: -0.47 stop: 44.45

BIIB is still slipping lower and after a day of trading sideways we noticed that volume spiked higher near the close. We don't see any change from our weekend update. It wouldn't surprise us to see BIIB dip toward the $45 level if the markets continue to slip lower. We would not suggest new bullish positions at this time. The Point & Figure chart remains bullish and points to a $62 target. Our target for BIIB is the $49.85-50.00 range.

Picked on December 27 at $ 46.11
Change since picked: - 0.19
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 3.2 million

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Caterpillar - CAT - close: 61.87 change: -0.84 stop: 58.95 *new*

CAT finally experienced some profit taking during today's pull back. We see no change from our previous update although technical traders will note that today's session looks like an "inside day". If there is any pull back in CAT the 10-dma near 60.85 and the $60.00 level should act as support. We are going to raise our stop loss to $58.95. Our target is the $64.75-65.00 range. The Point & Figure chart points to a $72 target.

Picked on January 08 at $ 60.45
Change since picked: + 1.42
Earnings Date 01/26/06 (unconfirmed)
Average Daily Volume = 4.0 million

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Fortune Brands - FO - close: 78.57 change: +0.94 stop: 76.45

Our play in FO has been triggered. The stock displayed some relative strength this morning and broke out over its trendline of resistance (and the top of its neutral pattern of higher lows and lower highs). Our trigger to buy calls was at $78.65. Looking at the intraday chart you can see where the initial rally failed but traders stepped in to buy the dip near $78 around lunchtime. This looks like a new bullish entry point. However, more conservative traders may want to wait a day to see if FO produces any follow through since the broader market averages look vulnerable to more profit taking. Our short-term target is the $83.00-84.00 range. We do not want to hold any positions over the early February earnings report.

Picked on January 18 at $ 78.65
Change since picked: - 0.08
Earnings Date 02/03/06 (unconfirmed)
Average Daily Volume = 803 thousand

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Gannett Co - GCI - close: 64.68 change: -0.12 stop: 61.99

GCI failed to breakout over the $65.00 level and its 100-dma today but you'll notice that shares also rebounded off its lows near the rising 10-dma. More conservative traders may want to wait for GCI to clear the $65 level and/or its 100-dma before considering new bullish positions. Our target is going to be the $68.50-69.00 range. Remember that we do not want to hold any positions over the January 27th earnings report.

Picked on January 15 at $ 64.28
Change since picked: + 0.40
Earnings Date 01/27/06 (confirmed)
Average Daily Volume = 1.4 million

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Goldman Sachs - GS - close: 131.85 chg: -0.74 stop: 127.45

The broker-dealer group experienced a little bit of volatility today. Investors did not respond well to an earnings report from Charles Schwab (SCHW) this morning. Shares of SCHW lost more than 2%. Meanwhile shares of GS gapped lower at the open but immediately began to rebound and the stock closed with a minor loss. The excitement for the week is not over yet and earnings news from Merrill Lynch (MER) tomorrow could also impact the sector. We are not suggesting new bullish positions at the moment. Our target is the $134.80-135.00 range.

Picked on January 09 at $130.05
Change since picked: + 1.80
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Holly Corp. - HOC - close: 65.88 chg: -0.55 stop: 59.95

The oil sector hit some profit taking today after Tuesday's big rally. Shares of HOC fell to $63.75 but quickly bounced. The low today was near the rising 10-dma and was enough to fill the gap from Tuesday morning. This looks like a new bullish entry point to buy calls on HOC. Our target is the $69.75-70.00 range. We do not want to hold over the February earnings report.

Picked on January 17 at $ 65.65
Change since picked: + 0.23
Earnings Date 02/06/06 (unconfirmed)
Average Daily Volume = 303 thousand

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Lehman Brothers - LEH - close: 133.27 chg: -1.54 stop: 129.45

The reaction to SCHW's earnings news also weighed on LEH today. The stock produced an intraday dip toward its 10-dma near $132 before bouncing higher again. The move looks like a new bullish entry point but MER is due to report earnings tomorrow morning and the results could influence trading in shares of LEH. We are not suggesting new positions at the moment. The P&F chart points to a $177 target. We are going to maintain our target in the $138.50-140.00 range. We are raising our stop loss to $129.45.

Picked on January 09 at $131.05
Change since picked: + 2.22
Earnings Date 03/14/06 (unconfirmed)
Average Daily Volume = 2.3 million

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Ipsco Inc. - IPS - close: 84.27 change: -0.58 stop: 81.95

There was no continuation of Tuesday's rally for IPS today. The stock merely drifted lower and produced what looks like an "inside" day. We would hesitate to open new bullish positions here. Our target is the $89.00-90.00 range.

Picked on December 30 at $ 83.55
Change since picked: + 0.72
Earnings Date 02/06/06 (confirmed)
Average Daily Volume = 396 thousand

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Lennar Corp. - LEN - close: 63.36 chg: -0.07 stop: 61.90

Homebuilders continued to see some profit taking early on today but the group, and shares of LEN, managed a rebound off its lows of the session. This might be the end of the current short-term consolidation but we would not initiate new positions yet. Watch for a move back over $64.00 if you're looking for an entry point. Our target is the $69.50-70.00 range before February options expire.

Picked on January 09 at $ 64.01
Change since picked: - 0.65
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Selective Ins. - SIGI - close: 55.34 chg: -0.11 stop: 53.79

SIGI did manage to trade over technical resistance at its 50-dma on an intraday basis today but the stock failed to hold its gains. The stock also failed to breakout over the $56.00 level so we remain on the sidelines. Our trigger to buy calls is at $56.05. If triggered our target will be the $59.50-60.00 range. We only have a couple of weeks for the play to perform since we don't want to hold a position over the end of January earnings report. FYI: SIGI might announce a stock split with its earnings report. The company last split its stock in December 1997 in the $50-52 region.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/31/06 (unconfirmed)
Average Daily Volume = 163 thousand

Put Updates

DRS Tech. - DRS - close: 47.03 change: -0.38 stop: 51.01

DRS produced another decline today losing 0.8% on above average volume, which remains a bearish signal. The stock is starting to look a little short-term oversold so traders should be prepared for a bounce sooner rather than later. A failed rally under $49 could be used as a new entry point. Our target is a decline into the $45.00-44.00 range. More aggressive traders may want to use a lower target. We do not want to hold over the February earnings report.

Picked on January 17 at $ 47.95
Change since picked: - 0.92
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume = 275 thousand

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Expeditors Intl. - EXPD - cls: 67.57 change: +1.19 stop: 68.55

Be careful here! EXPD is producing some volatility. The stock dipped lower enough to hit our trigger to buy puts and then quickly rebounded. A sharp bounce in the airline index (XAL +4.4%) helped fuel a rebound in the Dow transportation index (+0.9%). EXPD responded with a 1.79% gain and a rally to the $68 level and its trendline of resistance (lower highs). We are not suggesting new put plays here. If you were triggered this morning it might be prudent to exit early. We would only consider new positions if EXPD traded under today's low of 65.65.

Picked on January 18 at $ 65.80
Change since picked: + 1.77
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 972 thousand

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Scotts Miracle grow - SMG - cls: 45.76 che: -0.32 stop: 47.05

SMG is still inching lower and not really showing a lot of weakness despite more than a week of failing to breakout over the $47.00 level. We have about a week left before SMG is expected to report earnings on January 24th so we're not suggesting new bearish positions here. We do not want to hold over the report. Our target is the $41.50-41.25 range but watch out for potential support at the rising 100-dma near 44.44.

Picked on January 01 at $ 45.24
Change since picked: + 0.52
Earnings Date 01/24/06 (confirmed)
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: 25.01 chg: -0.24 stop: n/a

We see no change from our weekend update. Our strangle play in AEOS is pretty much dead. There are two trading days 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 $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: - 0.46
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Abercrombie&Fitch - ANF - close: 63.01 chg: +0.07 stop: n/a

We see no change from our weekend update. Murphy's law is alive and well. When ANF was above the $65 level we had a chance that shares might spike higher and give us an opportunity to exit at breakeven ($5.15). Friday's action may have just doomed the strangle play. ANF was downgraded Friday morning and the stock gapped lower to open at $65.00 and close with a 3.58% loss. We have two trading days before January options expire. 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: + 3.34
Earnings Date 02/14/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Blue Coat Sys. - BCSI - cls: 40.87 chg: -0.00 stop: n/a

Time is almost up for the strangle on BCSI. 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: - 4.56
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Building Materials - BMHC - cls: 75.86 chg: -0.46 stop: n/a

BMHC is still retreating after last week's failed rally near the 50-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: - 5.19
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 527 thousand

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Chicago Merc. Exchg. - CME - cls: 378.00 chg: -4.00 stop: n/a

We see no change from our weekend update on CME. Time is almost up for our strangle in CME. 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: + 2.10
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 879 thousand

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Encana Corp. - ECA - close: 47.61 chg: -0.72 stop: n/a

ECA dipped low enough on Wednesday to fill the gap from Tuesday morning. The afternoon bounce makes this look like a new bullish position if you're interested in trading calls. This is a strangle play and we're not suggesting new positions. Our strategy involves the April $50 calls (ECA-DJ) and the April $40 puts (ECA-PH). Our estimated cost is $3.45. We are aiming for a rise to $5.95.

Picked on January 10 at $ 45.56
Change since picked: + 1.75
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Four Seasons - FS - close: 54.66 chg: -0.09 stop: n/a

We see no change from our weekend update. January option expiration is just two trading days away and we see no reason that FS will move much from its current $54-55 trading range. Unfortunately, that means our strangle play will close with a loss. 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: - 0.71
Earnings Date 02/26/06 (unconfirmed)
Average Daily Volume = 319 thousand

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Questar Corp. - STR - close: 83.43 chg: +0.35 stop: n/a

STR displayed some relative strength and closed in the green while most of the energy stocks turned lower today. We are running out of time for our STR strangle. 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). More conservative traders may want to exit right here to reduce their losses. Or if you think STR will make rise toward resistance at $85 before Friday's close consider waiting and try exiting near $85.

Picked on November 20 at $ 76.25
Change since picked: + 7.18
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume = 716 thousand

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Texas Ind. - TXI - close: 51.90 chg: -0.10 stop: n/a

We see no change from our weekend update. TXI is still stuck in its trading range and that's bad news for our strangle play. 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: + 2.33
Earnings Date 01/05/06 (confirmed)
Average Daily Volume = 354 thousand
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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