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Call Updates

Beazer Homes - BZH - close: 67.04 change: +2.33 stop: 63.19 *new*

Homebuilders rebounded sharply today. The DJUSHB home construction index rose 3.9% and broke through resistance at the 900 level. The HGX housing index rose 2.8% and broke through its resistance near 265 and the 50-dma. BZH helped lead the pack with a 3.6% gain and a breakout over the $66.00 level, which had been short-term resistance. BZH's macd indicator on its daily chart is nearing a new buy signal. Our short-term target is the $69.85 mark. The $70 level and its 50-dma (71.92) are likely to be overhead resistance. We are raising the stop loss to $63.19, just under yesterday's low.

Picked on February 15 at $ 65.05
Change since picked: + 1.99
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

The BTK biotech index turned in a strong session with a 2% gain and a close at new multi-year highs. CEPH managed a 1.5% bounce but volume continues to be low. The MACD indicator on CEPH's daily chart is nearing a new buy signal. 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: 48.85 change: -0.05 stop: 44.89

CHS is not making much progress this week but neither is it giving back the previous week's gains. We continue to look for the $46.00 level and its 10-dma (47.19) 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: + 1.24
Earnings Date 03/01/06 (confirmed)
Average Daily Volume = 1.8 million

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Google Inc. - GOOG - close: 365.49 chg: -1.10 stop: 344.48

While GOOG did not decline as much as we expected today the stock still under performed. We would not consider new bullish positions here. Watch for a dip into the $355-350 region and then wait for a bounce to appear. 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: - 1.03
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 12.4 million

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Hartford Fin. Srv. - HIG - cls: 85.80 chg: +1.90 stop: 79.95

We are surprised by HIG's strength today. The stock look poised to test support near $82 yesterday. Instead the stock soared this morning and has closed over resistance at the $85.00 level and its 50-dma. This is great news. More conservative traders may want to consider an early exit. Our target is the $87.50-90.00 range.

Picked on February 14 at $ 82.12
Change since picked: + 3.68
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

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Occidental Petrol. - OXY - cls: 90.38 chg: -1.46 stop: 85.95

Oil stocks did not perform well today after a 3% decline in the price of crude. That's okay. We were expecting a dip in OXY back to the $90.00 level and we got it today. A bounce from here can be used as a new bullish entry point. 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: - 1.62
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Total - TOT - close: 127.85 change: -1.06 stop: 124.95

Yesterday we warned readers to expect a pull back in TOT today. Shares dipped to $127.11 before rebounding this afternoon. If crude oil continues to slip lower tomorrow then TOT may retest technical support at its simple 200-dma (now at 126.00). Wait for a rebound to appear before considering new positions. 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: + 0.24
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 836 thousand

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Tenaris S.A. - TS - cls: 156.85 chg: -3.30 stop: 144.99

There were no surprises here. We warned readers to expect some profit taking today. The real question is where will TS try and bounce. The top of the gap from Tuesday at $156.00 could offer some support as could the bottom of the gap near $154.00. We would watch the $154 level. More conservative traders may want to tighten their stop loss. Our target is the $164.00-165.00 range

Picked on February 21 at $156.22
Change since picked: + 0.63
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume = 516 thousand

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Universal Health - UHS - close: 50.80 chg: -0.24 stop: 49.24

Uh-oh! The market produced a relatively widespread rally today yet UHS displayed relative weakness. That doesn't bode well. We are tightening our stop loss to $49.74. We plan to exit on Friday. We are targeting a rally into the $54.50-55.00 range.

Picked on February 15 at $ 50.51
Change since picked: + 0.29
Earnings Date 02/27/06 (confirmed)
Average Daily Volume = 613 thousand
 

Put Updates

Apollo Group - APOL - close: 57.74 chg: +0.78 stop: 60.01

APOL produced a bit of an oversold bounce today but we don't see any real change from our previous updates. Our target is the $53.00-52.50 range.

Picked on February 19 at $ 58.06
Change since picked: - 0.32
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.0 million
 

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: 74.18 chg: +0.56 stop: n/a

The market rally today helped BMHC bounce but the stock couldn't break through the $75.00 level. 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: - 6.77
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 527 thousand

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Encana Corp. - ECA - close: 42.04 chg: -1.61 stop: n/a

A 3% drop in crude oil futures pushed the oil sector lower. ECA lost 3.68%. 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: - 3.52
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Loews Corp. - LTR - close: 94.80 change: -0.11 stop: n/a

Lack of movement in LTR continues to be a good reason to bail out of this strangle play. 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: - 0.92
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

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Ryland Group - RYL - close: 72.84 change: +3.13 stop: n/a

Homebuilders produced a big rally today. RYL helped lead the charge with a 4.4% gain and a breakout through resistance at $70 and its 200-dma. 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: - 2.35
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

None
 

Dropped Puts

MGIG Invest. - MTG - close: 65.12 change: +2.20 stop: 65.51

It's time to exit. MTG produced way too much strength for us today. The stock rallied back above technical resistance at the 200-dma and back through resistance at the neckline to its bearish head-and-shoulders pattern in the $64.00-64.50 region. We're suggesting traders exit early immediately.

Picked on February 06 at $ 63.70
Change since picked: + 1.42
Earnings Date 01/12/06 (confirmed)
Average Daily Volume = 833 thousand
 

Dropped Strangles

None
 

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