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Call Updates

Amer. Science. - ASEI - cls: 74.56 chg: -0.35 stop: 67.84

ASEI is still struggling with round-number resistance at the $75.00 level but neither is it giving back recent gains. We are suggesting that readers pick their new entry points. A move over today's high (75.50) or a pull back toward the $72.00 region could be used as a new entry point. There hasn't been any new rumors about GE making a bid to buy ASEI in the last couple of days nor has there been any new data about ASEI's short interest. The latest data put short interest at over 15% of the eight-million share float. Our target is the $79.75-80.00 range.

Picked on February 23 at $ 74.05
Change since picked: + 0.51
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 178 thousand

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Ashland - ASH - close: 66.16 change: -0.15 stop: 64.75

Oil-related stocks didn't do so great today after a relatively steep drop in crude oil futures. News that Russia and Iran are making progress on a deal that might avoid a confrontation with the west was seen as good news today. Plus, there was more news on the recent attack on a major Saudi oil facility. What's interesting here with ASH is that the stock did not see much profit taking. Shares dipped but were on the rebound this afternoon. Meanwhile the OIX oil index fell 1.1% and the OSX oil services index slipped 2.4%. Our strategy with ASH still stands. We're suggesting a trigger to buy calls at $67.05. If triggered then we'll target a rally into the $72.00-72.50 range.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 689 thousand

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Beazer Homes - BZH - close: 64.11 change: -1.33 stop: 62.65*new*

Economic data out this morning was not positive for the homebuilders. New home sales fell about 5% in January. Naturally the markets reacted negatively to the report but January is not normally a strong month for home sales. What you may have not heard is that sales for December were revised higher. We have been somewhat cautious with BZH lately and remain even more so now. Odds are looking pretty good that BZH will retest the simple 200-dma now at $62.71. We hate to do it but we're going to lower our stop loss to $62.65 placing it under the 200-dma. More conservative traders may just want to exit early right now and limit your losses you can always re-enter should BZH rebound over the $66 or $67 level again.

Picked on February 15 at $ 65.05
Change since picked: - 0.94
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.2 million

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Cephalon - CEPH - close: 80.68 change: +4.28 stop: 74.99 *new*

The biotech sector helped lead the rally today. The BTK index rose 1.65% and closed at new multi-year highs. Helping lead the way was CEPH. An analyst firm upgraded CEPH to a "strong buy" this morning and the stock responded with a 5.6% gain on above average volume. The MACD on its daily chart has confirmed its buy signal and today's close over the $80.00 level is a bullish breakout. Our target is the $82.00-82.50 range but traders may want to seriously consider taking some profits right here or significantly tightening your stop loss. We're going to put our stop at $74.99.

Picked on February 23 at $ 76.65
Change since picked: + 4.03
Earnings Date 02/14/06 (confirmed)
Average Daily Volume = 2.5 million

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Chico's FAS - CHS - close: 47.32 change: -0.09 stop: 45.89

CHS under performed the market today. The stock churned sideways to down while the broader indices and the retail index turned higher. Maybe it's nervousness over CHS' earnings report. Our plan is to exit on Tuesday afternoon near the closing bell to avoid holding over the Wednesday earnings announcement.

Picked on February 14 at $ 47.61
Change since picked: - 0.29
Earnings Date 03/01/06 (confirmed)
Average Daily Volume = 1.8 million

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Cigna - CI - close: 123.68 change: -0.89 stop: 119.90

CI gave us a scare this morning with a gap down to open at $121.75 but the move proved to be a new bullish entry point as traders quickly bought the dip. We could not find any specific news to account for this morning's weakness. We don't see any other changes from our weekend update. Most of the technicals and the P&F chart are bullish. We are going to suggest bullish call positions in CI in the $123-126 region. Our short-term target is $129.75-130.00.

Picked on February 26 at $124.57
Change since picked: - 0.89
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 944 thousand

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F5 Networks - FFIV - close: 68.78 chg: +1.62 stop: 63.85

Technology stocks were bullish today and the NASDAQ composite appears to have broken out to the upside from its recent consolidation. This helped FFIV power to a new relative high after traders bought the dip this morning near $66.30. Volume came in pretty strong again. We plan to exit in the $69.95-70.00 range. More aggressive traders may want to aim higher say the $72.50-75.00 region.

Picked on February 26 at $ 67.16
Change since picked: + 1.62
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.0 million

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Google Inc. - GOOG - close: 390.37 chg: +12.97 stop: 358.00*new*

Monday proved to be a positive day for GOOG shareholders. The stock launched higher and by the closing bell it rang up 3.4% in gains. Volume was a little bit below average but we're not complaining. However, what we do notice is that the rally stalled right under its simple 100-dma currently near $392. The high today was $391.70. More conservative traders may want to seriously consider exiting right here, especially since GOOG is relatively close to our target at $394.00. We're going to raise our stop loss to $358. Very aggressive traders may want to aim higher but we'd expect resistance at the $400.00 mark and the bottom of its gap down near $406.00 and again at its 50-dma now at $413. Please note that GOOG has an analyst meeting on Thursday, March 2nd.

Picked on February 16 at $366.46
Change since picked: +23.91
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 12.4 million

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Goldman Sachs - GS - close: 143.82 change: -0.34 stop: 141.45

Broker-dealer stocks were uncharacteristically weak today. The sector index closed fractionally in the red and shares of GS followed suit. GS continues to consolidate sideways but the trend of lower highs, however minor, is bearish. More aggressive traders may want to give GS more room to maneuver and put their stop loss under $140.00. More conservative traders may want to tighten their stops toward the $143.00 level. We're going to leave our stop where it is at $141.45. 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: - 1.37
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Hartford Fin. Srv. - HIG - cls: 83.27 chg: +0.38 stop: 79.95

We see no change from our weekend update on HIG. The stock remains weak and we expect a dip toward $82.00. Earlier we suggested that more conservative traders could have exited near $85 and if you did not you might want to think about exiting early here or at least adjusting your stop loss toward $82.00. We are not suggesting new bullish positions at this time.

Picked on February 14 at $ 82.12
Change since picked: + 1.55
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

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MDC Holdings - MDC - close: 62.29 chg: -1.03 stop: 61.15

There is no change from our weekend update for MDC. Today's economic report that said new home sales fell 5% in January pulled MDC to a 1.6% loss. We remain on the sidelines with MDC. Our plan is to catch the next leg higher with a trigger to buy calls at $65.05. 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: 72.72 chg: +0.27 stop: 71.85

MO managed a minor bounce today but we remain concerned. Some of the technical oscillators are not looking very healthy. Fortunately, we remain spectators until MO hits our trigger. We want to catch a bullish breakout over resistance at $74.00 and we're 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 74.29) before initiating positions. If triggered we are going to target the $77.50-78.00 range. We will also keep an eye out for a bounce from support at its rising 200-dma, now at 70.93.

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: 90.81 chg: -1.57 stop: 85.95

OXY remains volatile. The stock lost 1.69% as crude oil futures turned lower today. Watch for a bounce from the $90.00 level as a potential entry point for new call positions. 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: - 1.19
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Potash - POT - close: 96.05 chg: +1.58 stop: 89.95

Monday was a bullish day for POT. Before the opening bell the stock was downgraded from a "buy" to a "neutral". This sparked the gap open lower at $93.19 but traders quickly bought the dip, which was near the simple 200-dma, and POT closed the day with a new three-week high on above average volume. The stock looks poised to make a run at our target in the $99.50-100.00 range. As expected the move over $96 today produced a new P&F chart buy signal that now points to a $111 target.


Picked on February 23 at $ 93.05
Change since picked: + 3.00
Earnings Date 04/29/06 (unconfirmed)
Average Daily Volume = 826 thousand

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Prudential - PRU - close: 77.48 change: +0.06 stop: 74.59

Monday was not the sort of bullish follow through we would have expected from PRU. The stock broke out over resistance on Friday but there was no follow through today. The overall pattern remains bullish but traders may want to double check their stop loss placement and make sure they're happy with the amount of risk you're taking. Our target is the $82.00-82.50 range. We do expect some resistance near $80.00.

Picked on February 24 at $ 77.10
Change since picked: + 0.38
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 1.9 million

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Total - TOT - close: 126.93 change: -0.73 stop: 124.95

There are no real surprises here. We've been telling readers to look for a dip back toward the simple 200-dma, now at 126.21, as a new bullish entry point. We would actually wait for a bounce from $126.00 before initiating new positions instead of going long on the dip. More conservative traders may want to wait for a move over $130.00 or its 50-dma before initiating plays. Our target is the $137.00-140.00 range.

Picked on February 16 at $127.61
Change since picked: - 0.68
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 836 thousand

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Tenaris S.A. - TS - cls: 160.48 chg: +0.07 stop: 149.95

TS almost hit our target today. The stock gapped open at $164.51 before fading back toward the $160 level. Our target is the $164.00-165.00 range. More aggressive traders may want to aim higher since a move over $165.00 would be a new high and a breakout over its January highs, which could act as resistance.

Picked on February 21 at $156.22
Change since picked: + 4.26
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume = 516 thousand
 

Put Updates

Apollo Group - APOL - close: 58.47 chg: +0.38 stop: 60.01

We remain on yellow-alert here with APOL. The bullish market today helped fuel another bounce in APOL and the stock is now testing technical resistance at its simple 50-dma (58.76). If shares push past the 50-dma there is still resistance near $60.00. We would not suggest new bearish positions at this time. Our target is the $53.00-52.50 range.

Picked on February 19 at $ 58.06
Change since picked: + 0.41
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: 68.94 chg: -3.52 stop: n/a

Good news! BMHC under performed the market and lost 4.8% on very strong volume. Today's decline puts the March $70 puts in the money. We recently adjusted our target to breakeven ($8.20). 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. More aggressive traders may want to aim higher.

Picked on December 18 at $ 80.95
Change since picked: -12.01
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 527 thousand

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Encana Corp. - ECA - close: 40.50 chg: -1.54 stop: n/a

Weakness in crude oil fueled a sell-off in the oil stocks and ECA seemed only too happy to comply. Shares lost 3.6% and are nearing round-number support at the $40.00 mark. 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: - 5.06
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Loews Corp. - LTR - close: 92.52 change: -0.68 stop: n/a

Volume was huge in LTR today. The stock under performed the market and lost 0.7%. What's impressive is that volume was more than four times the daily average. 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: - 3.20
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

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Ryland Group - RYL - close: 71.12 change: -0.99 stop: n/a

We do not see any change from our weekend update for RYL. There is still about two months to go before April expiration. There is no way to know where RYL will be two months from now but this rebound may suggest the stock is stuck in a range. More conservative traders might want to consider just exiting early. 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: - 3.08
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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