Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Aetna - AET - close: 93.32 change: +0.63 stop: 89.99

Monday proved to be a positive day for AET. The stock gapped higher at the opening bell and traded briefly above resistance at its simple 50-dma and the $94.00 level. Our trigger to buy calls was hit at $94.05 so the play is now open. We are suggesting caution because AET failed to close over the $94 level and this could turn into a failed rally near resistance. Aggressive traders might want to look for a bounce from $92 as a new entry point. The rest of us are probably better off waiting for a new relative high above $94.20 before buying calls. We do not want to hold over AET's February earnings report. Our target is the $99.00-100.00 range.

Picked on January 30 at $ 94.05
Change since picked: - 0.73
Earnings Date 02/09/06 (confirmed)
Average Daily Volume = 1.7 million

---

Carter's Inc. - CRI - close: 68.06 chg: +0.06 stop: 64.75

We do not see any change from our weekend update on CRI. Any bounce above $65 could be used as a new bullish entry point. The P&F chart is bullish and points to an $85 target. Our target is the $72.50-75.00 range. We do not want to hold over the late February earnings report.

Picked on January 25 at $ 66.62
Change since picked: + 1.44
Earnings Date 02/20/06 (unconfirmed)
Average Daily Volume = 313 thousand

---

Express Scripts - ESRX - close: 91.65 chg: -0.77 stop: 87.45

We do not see much change from our new play description on ESRX published over the weekend. Readers can use today's pull back as a new entry point to buy calls or hope for a dip back toward the $90.00-90.75 region and buy calls on a bounce there. Broken resistance near $90 should now act as new support. Our target is the $99.50-100.00 range. We do not want to hold over the February 22nd (unconfirmed) earnings report.

Picked on January 29 at $ 92.42
Change since picked: - 0.77
Earnings Date 02/22/06 (unconfirmed)
Average Daily Volume = 2.1 million

---

Freeport Mcmoran - FCX - cls: 63.30 chg: +0.33 stop: 56.85

FCX is still creeping higher. We don't see any change from our weekend update. Don't forget that rival Phelps Dodge (PD) is expected to report earnings on January 31st. The stock has been soaring and traders might use PD's report as an excuse to lock in profits. If that occurs then FCX could see some selling by association. Our target in FCX is the $64.75-65.00 range.

Picked on January 24 at $ 60.22
Change since picked: + 3.08
Earnings Date 01/17/06 (confirmed)
Average Daily Volume = 2.6 million

---

KB Home - KBH - close: 77.51 chg: +1.21 stop: 73.30

KBH is off to a good start with today's 1.5% gain. We would still consider new bullish positions here and we don't see much change from our new play description from this weekend. Our target is the $84.00-85.00 range. Short-term traders can target the January highs near $82.00. The P&F chart is bullish and points to a $93.00 target.

Picked on January 29 at $ 76.30
Change since picked: + 1.21
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.0 million

---

SFBC Intl. - SFCC - close: 21.51 chg: -0.40 stop: 18.95

The trading action in SFCC this Monday looks like a new bullish entry point. Over the weekend we warned readers to watch out for a pull back into the $20.00-20.75 region as a new entry zone. Shares dipped to $20.42 this morning and quickly rebounded higher. A strong bounce from here could set off another short squeeze. The stock has incredibly high short interest. Our target is the $24.90-25.00 range. More conservative traders may want to exit in the $24.50-24.65 zone since the 38.2% Fibonacci retracement of its October-December sell-off is about $24.65. In the news today SFCC announced that it is being sued by the owner of some land it leases property from. SFCC issued a press release to defend itself.

Picked on January 25 at $ 20.92
Change since picked: + 0.59
Earnings Date 02/22/06 (unconfirmed)
Average Daily Volume = 2.5 million
 

Put Updates

Biotech HOLDRs - BBH - close: 193.12 chg: -1.63 stop: 200.11

Biotech stocks were the worst performing sector today. The BTK index fell 1.34%. Shares of the BBH Holdrs fell 0.8% and look poised to breakdown under the $192 level again. Keep an eye on AMGN, which appeared to have produced a failed rally under its 200-dma today. Our target for the BBH is the $187.00-185.00 range.

Picked on January 20 at $195.78
Change since picked: - 2.66
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 539 thousand

---

Johnson Controls - JCI - close: 70.52 chg: +0.53 stop: 72.51

We do not see much change from our weekend update on JCI except that we would not open new put positions with the stock above the $70.00 level. Watch to see if the stock fails to rally over its simple 10-dma, which is quickly sliding lower to meet the stock price. Our target is the $65.50-65.00 range but watch for a bounce from the 100-dma near 68.00.

Picked on January 25 at $ 69.90
Change since picked: + 0.62
Earnings Date 01/20/06 (confirmed)
Average Daily Volume = 955 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.)

---

Building Materials - BMHC - cls: 80.64 chg: +0.64 stop: n/a

We do not see any change from our weekend update on BMHC. Earnings are coming up around February 7th and will probably produce more volatility. 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: - 0.31
Earnings Date 02/07/06 (unconfirmed)
Average Daily Volume = 527 thousand

---

Encana Corp. - ECA - close: 49.23 chg: +2.12 stop: n/a

Oil stocks were some of the best performers today and ECA added 4.5% to out perform many of its peers. 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: + 3.67
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

---

Google Inc. - GOOG - close: 426.82 chg: -6.67 stop: n/a

Tomorrow is your last day to consider opening strangle positions in GOOG before its earnings report after the closing bell on Tuesday. Wall Street expects GOOG to report profits of $1.77 a share. We are suggesting the February $450 calls and February $420 puts. Our estimated cost was about $40.10. Our target is for a rise to $60.00 for either side of the strangle. Given today's decline you might want to consider the $440 calls and the $420 puts or even the $410 puts. Remember, this is an aggressive, high-risk play and we expect shares to gap open (up or down) on Wednesday morning after the report.

Picked on January 29 at $433.49
Change since picked: - 6.67
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 11.1 million

---

Ryland Group - RYL - close: 73.81 change: +0.51 stop: n/a

We do not see any change from our weekend update on RYL. We are not suggesting new positions. Our play involves the April $80 calls (RYL-DP) and the April $70 puts (RYL-PN). Our estimated cost is $7.00. Our target is $12.00.

Picked on January 22 at $ 75.19
Change since picked: - 1.38
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Wynn Resorts - WYNN - close: 64.72 change: +1.78 stop: 58.45

Target achieved. Citigroup started coverage on WYNN with a "buy" rating this morning and the stock responded with an early rally up and over the $65.00 mark. Our target was the $64.75-65.00 range.

Picked on January 22 at $ 58.78
Change since picked: + 5.94
Earnings Date 02/09/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Dropped Puts

Omnicare - OCR - close: 48.96 change: +6.09 stop: 56.25

Target achieved. Actually OCR has surpassed our target in the $51.00-50.00 range. The stock closed with an 11% loss on huge volume after news surfaced of a raid by law enforcement officials. An Associated Press article reported that the Cincinnati Enquirer stated over the weekend that the Michigan attorney general's office had raided OCR's offices last week. At least one stock analyst downgraded shares to a "hold" on the news.

Picked on January 20 at $ 54.99
Change since picked: - 6.03
Earnings Date 02/23/06 (unconfirmed)
Average Daily Volume = 1.3 million
 

Dropped Strangles

None Today.

Play Update Archives