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Call Updates

Beazer Homes - BZH - close: 64.71 change: +0.03 stop: 62.29

Housing stocks were weak earlier in the session but the group was rebounding higher by lunchtime and several of the homebuilders managed to close in the green this afternoon. BZH was one of the homebuilders bouncing from its lows but we remain wary. Traders might want to wait for a move over $66.00 or $66.50 before initiating new call positions. If the stock continues to bounce we will target the $69.85 level.

Picked on February 15 at $ 65.05
Change since picked: - 0.34
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.2 million

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Cephalon - CEPH - close: 74.06 change: -0.33 stop: 69.99

Biotech stocks hit some profit taking after the BTK index touched new multi-year highs late last week. Shares of CEPH pulled back a bit but on very low volume. If the sector rebounds then CEPH is poised to breakout over resistance and hit new highs of its own. We are suggesting a trigger to buy calls at $76.65. If triggered we'll target a run into the $82.00-82.50 zone. More conservative traders may want to exit near $80.00 since it might be round-number resistance. Traders should remember that any time you're trading a biotech stock there is an elevated status of risk. You never know when an unexpected announcement about a drug in development or even from a competitor can send the stock you're trading gapping higher or lower in an instant.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/14/06 (confirmed)
Average Daily Volume = 2.5 million

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Chico's FAS - CHS - close: 48.90 change: +0.53 stop: 44.89

Retailers turned in a sour performance. The RLX index performed what looks like a failed rally at three-month old resistance today. The action was fueled by selling in Wal-Mart (WMT) after the company released its earnings results today. This makes the intraday rebound in shares of CHS look positive but we are suggesting caution. If the RLX continues to sink then it will be tougher for CHS to make headway. We continue to look for the $46.00 level and its 10-dma (46.70) to act as the first levels of support. Our target is the $52.00-52.50 range.

Picked on February 14 at $ 47.61
Change since picked: + 1.29
Earnings Date 03/01/06 (confirmed)
Average Daily Volume = 1.8 million

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Google Inc. - GOOG - close: 366.59 chg: -2.16 stop: 344.48

This morning saw a tug of war in shares of GOOG with the stock oscillating between $365 and $373 within the first 30-minutes of trading. Part of the volatility was driven by positive analyst comments suggesting that the sell-off is overdone and a reiteration of their "buy" rating and a $500 price target. Yet this was countered by rumors and speculation that GOOG's Chinese operations may not have the appropriate license to operate. We fully expect that shares will pull back tomorrow and they may not stop until the stock reaches the $355.00-350.00 region. Wait for the bounce to appear if you are looking to buy the dip. Remember, this is a very aggressive speculation play. We are targeting a rebound to the $394 level before March expiration.

Picked on February 16 at $366.46
Change since picked: + 0.13
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 12.4 million

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Hartford Fin. Srv. - HIG - cls: 83.90 chg: +0.25 stop: 79.95

Ding! HIG has hit our conservative target. Shares tagged the $85.00 level and the simple 50-dma both of which are overhead resistance. The stock quickly pulled back and look poised to slip lower tomorrow. Our original play description suggested that more conservative traders plan an exit near resistance at $85.00. We believe that HIG can probably push higher and make it into the $87.50-90.00 range - our target zone. Watch for the $82.00 level to be support. We would not open new plays at the moment.

Picked on February 14 at $ 82.12
Change since picked: + 1.53
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

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Occidental Petrol. - OXY - cls: 91.84 chg: +1.80 stop: 85.95

Oil stocks were some of the best performing equities today. Crude oil futures rallied with a 2% gain. Driving the gains were news reports over the weekend that Nigerian rebels have taken foreign oil workers hostage and are targeting oil company pipelines and facilities. Nigeria is the fifth largest oil importer into the U.S. Plus, the markets are still leery of the nuclear standoff with Iran. Shares of OXY responded by gapping higher to open at $92.00 and closing with a 1.99% gain. Our trigger to buy calls was at $90.75. Unfortunately, the gap higher put our entry point at $92.00 instead. If you did not open positions today we would wait for a dip back toward the $90.00 level since OXY may fill the gap. That would be an attractive entry point to buy calls. It is noteworthy that the rally today reversed the P&F chart from a sell signal to a new buy signal with a $108 target. Our target is the February highs in the $97.50-98.00 range.

Picked on February 21 at $ 92.00 *gap higher*
Change since picked: - 0.16
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Total - TOT - close: 128.91 change: -0.40 stop: 124.95

In spite of the strength in the oil stocks today shares of TOT produced a failed rally at the $130.00 level. It would not surprise us to see the stock pull back toward the $127.50 level so traders looking for a new entry point might just want to wait for the dip and signs of a bounce to appear. More conservative traders may want to wait for a move over $130 or its 50-dma before initiating positions. Our target is the $137.00-140.00 range.

Picked on February 16 at $127.61
Change since picked: + 1.30
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 836 thousand

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Tenaris S.A. - TS - cls: 160.15 chg: +6.19 stop: 144.99

We expected TS to move higher today but we didn't expect the gap higher or the run to $163.00. TS is a new play to the newsletter and we were suggesting a trigger to buy calls at $155.25. This morning TS gapped open at $156.22 so we have adjusted our entry point appropriately. Our target is the $164.00-165.00 range and shares almost hit our target this afternoon. Please note that the stock began to fade late this afternoon and after a big move like today we'd expect some profit taking tomorrow. FYI: today's big gain has produced a new triple-top breakout buy signal on the Point & Figure chart with a $200 price target.

Picked on February 21 at $156.22
Change since picked: + 3.93
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume = 516 thousand

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Universal Health - UHS - close: 51.04 chg: -0.14 stop: 49.24

We do not see any change from our weekend update on UHS. We plan to exit on Friday. Today's dip to the $50.50 level looked like another entry point. We are targeting a rally into the $54.50-55.00 range.

Picked on February 15 at $ 50.51
Change since picked: + 0.67
Earnings Date 02/27/06 (confirmed)
Average Daily Volume = 613 thousand
 

Put Updates

Apollo Group - APOL - close: 56.96 chg: -1.10 stop: 60.01

Our new put play with APOL is off to a good start. Shares lost 1.89% today and its MACD is nearing a new sell signal. We don't see any change from our weekend update. Our target is the $53.00-52.50 range.

Picked on February 19 at $ 58.06
Change since picked: - 1.10
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.0 million

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MGIG Invest. - MTG - close: 62.92 change: +0.12 stop: 65.51

We don't see any change from our weekend update on MTG. Our target is the $58.00-57.50 range.

Picked on February 06 at $ 63.70
Change since picked: - 0.78
Earnings Date 01/12/06 (confirmed)
Average Daily Volume = 833 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: 73.62 chg: +1.05 stop: n/a

We are not suggesting new strangle positions. 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: - 7.33
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 527 thousand

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Encana Corp. - ECA - close: 43.65 chg: +0.66 stop: n/a

ECA gapped higher with the strength in crude oil today but failed to hold most of its gains. 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: - 1.91
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Loews Corp. - LTR - close: 94.91 change: -0.52 stop: n/a

We don't see any change from our weekend update on LTR. We are not suggesting new strangle positions. Buying this strangle was 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: - 0.81
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

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Ryland Group - RYL - close: 69.71 change: +0.89 stop: n/a

RYL continues to bounce and looks poised to breakout over resistance at the $70.00 level. We are not suggesting new strangle positions at this time. 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: - 5.48
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Cigna - CI - close: 120.59 change: -1.62 stop: 118.79

The weakness in CI today and what looks like a failed rally at the $123.00 level has convinced us that we'd be better off to cut our losses right here. We can always try and jump in again later if CI makes it above the $124.00 level.

Picked on February 12 at $123.63
Change since picked: - 3.04
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 979 thousand

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Express Scripts - ESRX - close: 93.05 chg: +0.20 stop: 91.45

We have run out of time with our ESRX play. Our plan was to exit at the closing bell today to avoid holding over the company's earnings report tomorrow. We don't know if they have enough authorized shares but last time ESRX was in the $90 region (just last May) they announced a stock split. Will they announce another split tomorrow? Wall Street expects the company to report earnings of $0.74 a share.

Picked on January 29 at $ 92.42
Change since picked: + 0.63
Earnings Date 02/22/06 (confirmed)
Average Daily Volume = 2.1 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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