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Call Updates

Beazer Homes - BZH - close: 64.43 change: -0.15 stop: 62.29

BZH did continue to bounce this morning but the bad news is that the rally failed at its descending 10-dma. Our trigger to buy calls was at $65.05 so the play is now open. Remember, this is a high-risk, speculative play as BZH tries to bounce from its simple 200-dma. We would not open new positions with BZH under $65. More conservative traders can wait for a move over the 10-dma (above today's high).

Picked on February 15 at $ 65.05
Change since picked: - 0.62
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.2 million

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Chico's FAS - CHS - close: 48.78 change: +1.17 stop: 44.49

CHS continues to rally higher. Today's 2.4% gain put it at a new all-time high. Volume came in above average, which is positive for the stock. Readers can choose to chase it here or wait for a possible pull back toward the $46 region. Our target is the $52.00-52.50 range.

Picked on February 14 at $ 47.61
Change since picked: + 1.17
Earnings Date 03/01/06 (confirmed)
Average Daily Volume = 1.8 million


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Cigna - CI - close: 122.52 change: +0.83 stop: 117.85

CI is trying to inch higher but the stock has still not closed the gap down from Monday morning. More aggressive traders may want to consider new positions here. Our target is the $129.50-130.00 range.

Picked on February 12 at $123.63
Change since picked: - 1.11
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 979 thousand

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Express Scripts - ESRX - close: 92.85 chg: +1.02 stop: 88.45

ESRX has finally turned positive for us and the stock hit a new all-time high on an intraday basis today. The stock probably benefited from a generally positive earnings report from rival Caremark (CMX) today. Our target is the $99.50-100.00 range. We do not want to hold over the late February earnings report and that only gives us about a week but so far the 22nd earnings date is unconfirmed.

Picked on January 29 at $ 92.42
Change since picked: + 0.43
Earnings Date 02/22/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Hartford Fin. Srv. - HIG - cls: 83.00 chg: +0.88 stop: 79.49

The bullish rebound in shares of HIG continued on Wednesday. Technical traders will note that the MACD indicator has also produced a new buy signal. We don't see any change from our new play description from Tuesday night. More conservative traders may want to exit near resistance at $85.00. We're going to target the $87.50-90.00 range.

Picked on February 14 at $ 82.12
Change since picked: + 0.88
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

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Universal Health - UHS - close: 50.94 chg: +1.53 stop: 48.90 *new*

Our bullish play on UHS has been opened. Our trigger to buy calls was at $50.51. The stock added over 3% today and broke out over significant resistance in the $50.00-50.50 region. We have less than two weeks before UHS is expected to report earnings. Investors should keep that time frame in mind. We don't want to hold over the report. Our target is the $54.50-55.00 range. We are going to raise our stop loss to $48.90.

Picked on February 15 at $ 50.51
Change since picked: + 0.43
Earnings Date 02/27/06 (confirmed)
Average Daily Volume = 613 thousand
 

Put Updates

Cameco Corp. - CCJ - close: 70.26 change: +2.14 stop: 72.56

The strength in CCJ's bounce today and its close back over the $70.00 level makes us a bit uncomfortable. If you recall we are long-term fundamentally bullish on CCJ. This play is an attempt to capture some short-term profit taking since the stock was so overbought and its chart was flashing a sell signal. We are not suggesting new plays. More conservative traders may want to tighten their stops. Really conservative traders may just want to exit early right here to minimize their losses! Our target is the $61.50-60.00 range.

Picked on February 07 at $ 68.57
Change since picked: + 1.69
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 1.1 million

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Intl Bus. Mach. - IBM - close: 80.85 change: -0.24 stop: 82.05

IBM continues to under perform its peers in the technology sector but we remain wary. The stock is butting up against resistance from its two-month trendline of lower highs. Yet bulls might point out the short-term trend of higher lows. If the market continues to rally we would expect IBM to follow so we're not suggesting new plays at this time. Our target is the $75.25-75.00 range.

Picked on February 06 at $ 79.49
Change since picked: + 1.36
Earnings Date 01/17/06 (confirmed)
Average Daily Volume = 6.0 million

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MGIG Invest. - MTG - close: 63.86 change: +0.88 stop: 66.05

Today's rally in MTG may prove to be another entry point. Shares rallied to $64.42, near its exponential 200-dma, before turning lower again. While this might look like the sort of failed rally we could short we would wait for a move back under $63.40 before considering new positions. More conservative traders may want to tighten their stop losses. Our target is the $58.00-57.50 range.

Picked on February 06 at $ 63.70
Change since picked: + 0.16
Earnings Date 01/12/06 (confirmed)
Average Daily Volume = 833 thousand

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Meritage Homes - MTH - close: 58.17 chg: -0.32 stop: 61.11

If you have not noticed yet we are hedging our bets in the homebuilders. MTH remains a bearish candidate in the group but we've recently added BZH as call candidate since shares look poised to bounce. Focusing on MTH the stock continues to trade under a short-term trendline of lower highs. We are not suggesting new positions at this time. Our target is the $52.00 level and this coincides with the P&F chart's target at $52.

Picked on February 02 at $ 58.76
Change since picked: - 0.59
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 560 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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Building Materials - BMHC - cls: 70.39 chg: +1.71 stop: n/a

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: -10.57
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 527 thousand

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Encana Corp. - ECA - close: 40.97 chg: -0.35 stop: n/a

Crude oil futures sank again today dragging the sector along with it. ECA might be on the verge of a breakdown below the $40 level. We are not suggesting new strangle positions. Our strangle 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: - 4.59
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Loews Corp. - LTR - close: 95.05 change: -1.07 stop: n/a

LTR provided traders one last attractive entry point to consider launching strangle positions with the dip back toward the $95.00 mark today. The company is expected to report earnings tomorrow morning. Wall Street is looking for profits of $2.03 a share. We are not longer suggesting strangle positions in the stock. This is a high-risk speculative play. Buying this strangle is a bet that LTR will be trading at more than $102 (above resistance) or less than $88 (under support) by March expiration. The options in our strangle are the March $100 calls (LTR-CT) and the March $90 puts (LTR-OR). Our estimated cost is $1.75.

Picked on February 13 at $ 95.72
Change since picked: - 0.67
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

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Ryland Group - RYL - close: 68.26 change: +0.54 stop: n/a

We do not see any change from our weekend update on RYL. We're not suggesting new strangle 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: - 6.93
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Lehman Brothers - LEH - cls: 145.40 chg: +3.47 stop: 134.49

Target achieved. News that MER and Blackrock had agreed to merge helped push the broker-dealer index to a new all-time high. Helping lead the way was LEH, which added 2.44% on big volume. Our target was the $144.95-145.00 range. More aggressive traders may want to keep the play open and aim for the $149 level.

Picked on February 12 at $137.50
Change since picked: + 7.90
Earnings Date 03/14/06 (unconfirmed)
Average Daily Volume = 2.0 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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