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Call Updates

Amer. Science. - ASEI - cls: 74.53 chg: +1.95 stop: 67.84

Our new call play in ASEI has been triggered today. The stock displayed some relative strength and out performed the broader market. Today's 2.68% gain was fueled by above average volume and the stock looks poised to test round-number resistance at the $75.00 level. Our trigger to buy calls was at $74.05, above historic resistance at the $74.00 level. Moving the stock seems to be rumors of a potential takeover from GE and a probable short squeeze considering the high short interest. Our target is the $79.75-80.00 range. More conservative traders may want to wait for a move over $75.00 before initiating positions.

Picked on February 23 at $ 74.05
Change since picked: + 0.48
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 178 thousand

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Beazer Homes - BZH - close: 66.08 change: -0.96 stop: 63.19

Homebuilders did not produce any follow through on yesterday's rebound. Contributing to the weakness today was Toll Brothers (TOL). Yesterday positive comments on TOL helped spark the rally in this sector. Today TOL, a builder of luxury homes, reported better than expected earnings but then said that demand was slowing. The DJUSHB fell 0.75% and shares of BZH fell 1.4%. The overall trend for BZH continues to look positive but we would be extra careful here. Our short-term target is the $69.85 mark.

Picked on February 15 at $ 65.05
Change since picked: + 1.03
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.2 million

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Cephalon - CEPH - close: 76.53 change: +1.34 stop: 69.99

The BTK biotech index was one of the few indices to close higher today. The group helped push shares of CEPH over resistance in the $76.00-76.50 region and the stock has hit our trigger to buy calls at $76.65. The MACD indicator on the daily chart has produced a new buy signal. Meanwhile the P&F chart has produced an ascending triple-top breakout buy signal with a $93 target. Our target is the $82.00-82.50 range. 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 23 at $ 76.65
Change since picked: - 0.12
Earnings Date 02/14/06 (confirmed)
Average Daily Volume = 2.5 million

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Chico's FAS - CHS - close: 47.40 change: -1.45 stop: 44.89

Shares of CHS are seeing some profit taking today. The stock lost almost 3% on above average volume. We are not suggesting new plays at this time. Watch the $46.00 level to act as support since CHS closed under its 10-dma today. A bounce from $46.00 could be used as a new entry point. More conservative traders may want to adjust their stop closer to the $46.00 level.

Picked on February 14 at $ 47.61
Change since picked: - 0.21
Earnings Date 03/01/06 (confirmed)
Average Daily Volume = 1.8 million

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Google Inc. - GOOG - close: 378.07 chg: +12.58 stop: 349.99*new*

We are honestly surprised by GOOG's relative strength today. The stock broke out higher and closed with a 3.4% gain and pushed through resistance near $375.00. Some of the short-term technicals look positive again and its MACD has produced a new buy signal on the daily chart. We are raising our stop loss to $349.99. More conservative traders may want to tighten their stop even more. 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: +11.61
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 12.4 million

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Goldman Sachs - GS - close: 143.96 change: -1.57 stop: 141.45

There was no follow through on yesterday's bounce in GS. The stock almost erased yesterday's again and is currently testing short-term support at its rising 10-dma. A bounce from $143.00 can be used as a new bullish entry point. If shares trade under $143.00 we'll turn defensive and probably start looking for the exits. We'll keep our stop loss at $141.45 for now. The Point & Figure chart points to a $169 target. We are only going to target the $149.85-150.00 range.

Picked on February 22 at $145.53
Change since picked: - 1.57
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Hartford Fin. Srv. - HIG - cls: 84.50 chg: -1.30 stop: 79.95

Yesterday's breakout in HIG over resistance at $85.00 was so encouraging so it's a bit disappointing to see today's sharp pull back and profit taking. Fortunately it looks like traders bought the dip near its rising 100-dma. We are not suggesting new positions at this time. Our target is the $87.50-90.00 range.

Picked on February 14 at $ 82.12
Change since picked: + 2.38
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

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MDC Holdings - MDC - close: 63.54 chg: -0.90 stop: 61.15

The disappointing conference call comments from homebuilder TOL defused the rally in the sector that began yesterday. We remain on the sidelines with MDC. We are suggesting a trigger at $65.05 to open call positions. If triggered we will target a rally into the $69.50-70.00 range.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/18/06 (unconfirmed)
Average Daily Volume = 856 thousand

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Altria Group - MO - close: 73.38 chg: +0.00 stop: 71.85

There was no change in the share price of MO today and we see no change from our original play description from Wednesday night. We are suggesting a trigger to buy calls at $74.10. More conservative traders may want to wait for MO to trade over its simple 50-dma (currently 74.30) before initiating positions. If triggered we are going to target the $77.50-78.00 range.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/19/06 (unconfirmed)
Average Daily Volume = 8.1 million

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Occidental Petrol. - OXY - cls: 90.00 chg: -0.38 stop: 85.95

Oil stocks were a mixed bag today. The markets are still concerned over Iran and Nigeria and currently we have enough crude supply to make up for any short fall from Nigeria but that probably won't last too long. A new move over $91.00 or today's high near $91.73 could be used as a new 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: - 2.00
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Potash - POT - close: 94.92 chg: +2.93 stop: 89.95

POT displayed lots of relative strength today. The stock pushed through its short-term trendline of resistance and hit our trigger to buy calls at $93.05. Now that the play is open our target is the $99.50-100.00 range.

Picked on February 23 at $ 93.05
Change since picked: + 1.87
Earnings Date 04/29/06 (unconfirmed)
Average Daily Volume = 826 thousand

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Prudential - PRU - close: 76.55 change: +0.02 stop: 73.99

The bounce in PRU has stalled. We would not count today's 2-cent gain as any sort of follow through for yesterday's bullish engulfing candlestick pattern. However, our strategy still works. We are suggesting a trigger at $77.05 to buy calls. If triggered we are going to target a rally into the $82.00-82.50 range. We do expect some resistance at $80 and would not be surprised to see PRU breakout, touch $80, and then pull back and retest the $77 level again as support. The P&F chart is bullish and points to a $103 target.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 1.9 million

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Total - TOT - close: 127.31 change: -0.54 stop: 124.95

TOT is still sliding back toward long-term support at its rising, simple 200-dma. A bounce from $126.00 can be used as a new bullish entry point. 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: - 0.30
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 836 thousand

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Tenaris S.A. - TS - cls: 157.15 chg: +0.30 stop: 144.99

We are actually encouraged that TS did not see more profit taking today since the markets were so widely weak. However, that doesn't mean we would consider new positions in TS at the moment. 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: + 0.93
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume = 516 thousand

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Universal Health - UHS - close: 50.92 chg: +0.12 stop: 49.99 *new*

Traders bought the dip toward round-number support at $50.00 today. Normally this would look like a new bullish entry point to buy calls but we're running out of time with UHS. Our plan is to exit on Friday at the closing bell. We do not want to hold over the earnings report. We are inching up our stop loss to $49.99.

Picked on February 15 at $ 50.51
Change since picked: + 0.41
Earnings Date 02/27/06 (confirmed)
Average Daily Volume = 613 thousand
 

Put Updates

Apollo Group - APOL - close: 57.18 chg: -0.56 stop: 60.01

APOL continues to look weak. The action over the last couple of days looks like a failed rally near $58.00. Readers can use this as a new bearish entry point. Our target is the $53.00-52.50 range.

Picked on February 19 at $ 58.06
Change since picked: - 0.88
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: 72.70 chg: -1.48 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: - 8.25
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 527 thousand

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Encana Corp. - ECA - close: 42.01 chg: -0.03 stop: n/a

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: - 3.55
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Loews Corp. - LTR - close: 95.30 change: +0.50 stop: n/a

Lack of movement in LTR continues to be a very 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: - 0.42
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

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Ryland Group - RYL - close: 71.74 change: -1.10 stop: n/a

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: - 3.45
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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