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Call Updates

Amer. Science. - ASEI - cls: 76.09 chg: +1.53 stop: 69.99*new*

Shares of ASEI bucked the trend today. The stock broke out over the $75.00 level and closed at new highs on above average volume. There were some analyst comments out today suggesting that the current U.S. port scandal over letting an Arab-based company manage U.S. ports, whether the deal goes through or not, will probably raise awareness and sales for companies like ASEI who provide security and detection solutions (e.g. x-ray machines for cargo). Today's move over $75 looks like a new bullish entry point but traders may want to hesitate before launching new positions. If the major averages continue south then ASEI will feel the drag and probably consolidate. Our target is the $79.75-80.00 range. We are raising our stop loss to $69.99.

Picked on February 23 at $ 74.05
Change since picked: + 2.04
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 178 thousand

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Ashland - ASH - close: 65.27 change: -0.89 stop: 64.75

Crude oil futures rebounded a bit from yesterday's sell-off but oil stocks saw no such bounce. ASH lost 1.3% and pulled back toward the $65 level. We remain on the sidelines. 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: 63.45 change: -0.66 stop: 62.65

Homebuilders continued to suffer on Tuesday. We expected BZH to pull back toward its simple 200-dma and that's what the stock did today. The question now is whether or not BZH will bounce from this level of technical support. What concerns us are the homebuilding sector indices. The DJUSHB index and the HGX index both look poised for more profit taking tomorrow. The prudent move in BZH may have been to exit yesterday. We are not suggesting new bullish positions.

Picked on February 15 at $ 65.05
Change since picked: - 1.60
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.2 million

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Cephalon - CEPH - close: 79.48 change: -1.20 stop: 74.99

With a market-wide sell-off underway on Tuesday it's only logical to expect CEPH to see some profit taking after Monday's big gain. Fortunately, CEPH managed to bounce intraday from the $78.00 region. We are not suggesting new positions. Our target is the $82.00-82.50 range.

Picked on February 23 at $ 76.65
Change since picked: + 2.83
Earnings Date 02/14/06 (confirmed)
Average Daily Volume = 2.5 million

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Cigna - CI - close: 122.75 change: -0.93 stop: 119.90

CI held up relatively well considering the market-wide sell-off. Unfortunately, two days of declines has brought CI down to its short-term trendline of support (higher lows) and its technical indicators look bearish. More conservative traders may want to consider using a tighter stop under $122.00. We will leave our stop loss at $119.90 for now. We're not suggesting new bullish positions at this time.

Picked on February 26 at $124.57
Change since picked: - 1.82
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 944 thousand

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F5 Networks - FFIV - close: 67.80 chg: -1.02 stop: 63.85

The profit taking in the technology sector hit FFIV for a 1.48% loss today. Should the NASDAQ continue to sink then we'd watch FFIV for a dip back toward broken resistance, now new support, at the $66.00 level (maybe $65.00). 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: + 0.60
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.0 million

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Hartford Fin. Srv. - HIG - cls: 82.38 chg: -0.89 stop: 79.95

We have been warning readers for days now to expect a dip toward the $82.00 level. That's what HIG provided today. Our concern is that volume was above average on today's decline plus the technical indicators are naturally turning more bearish given the pull back. Considering the major indices weakness today we are not suggesting new bullish positions in HIG. More conservative traders may want to exit early to limit their losses.

Picked on February 14 at $ 82.12
Change since picked: + 0.26
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

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MDC Holdings - MDC - close: 61.29 chg: -1.00 stop: 61.15

There is no change from our weekend update for MDC. The homebuilders continue to see profit taking and MDC is slipping toward the $60.00 level. 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: 71.90 chg: -0.82 stop: 71.85

Dow-component MO could not escape a triple-digit decline in the DJIA index. MO lost 1.12% and broke down under minor support near $72.00 on above average volume. We are still spectators at the moment. Currently our plan suggests readers buy calls on a breakout over $74.00 with a trigger at $74.10. However, we will be watching to see if MO bounces from technical support at its rising 200-dma currently near 71.00.

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: 91.54 chg: +0.73 stop: 85.95

OXY bucked the overall weakness in the market today. We like the relative strength but the oil sector in general was weak in spite of a bounce in crude oil futures. Traders could use today's bounce from $90 as a new entry point but we'd be very careful about starting new bullish 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: - 0.46
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Potash - POT - close: 95.75 chg: -0.30 stop: 89.95

POT did a relatively good job resisting most of the market weakness today. Shares bounced from their lows near $94.25 and look poised to move higher but if the market indices sink tomorrow POT could be a target for more profit taking. Our target is the $99.50-100.00 range.

Picked on February 23 at $ 93.05
Change since picked: + 2.70
Earnings Date 04/29/06 (unconfirmed)
Average Daily Volume = 826 thousand

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Prudential - PRU - close: 77.04 change: -0.44 stop: 74.59

We don't see any change from our previous updates on PRU. We would be careful about starting new bullish positions at this time. 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: - 0.06
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 1.9 million

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Total - TOT - close: 126.13 change: -0.80 stop: 124.95

This is do or die time for TOT. The stock dipped to $125.42 before bouncing and shares actually closed under their simple 200-dma. Normally we would expect a bounce from this area with the $125.00 level offering round-number, psychological support and the 200-dma offering technical support. Unfortunately, the oil stocks have been asking somewhat weak. Aggressive traders could buy a bounce from here. More conservative types could wait for a move over the 100-dma (128.62) or still wait for a move over $130.00 and/or its 50-dma.

Picked on February 16 at $127.61
Change since picked: - 1.48
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 836 thousand

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Tenaris S.A. - TS - cls: 160.15 chg: -0.33 stop: 153.45 *new*

TS rebounded strongly from some early profit taking that took shares down to $154.77. While the rebound was encouraging we remain cautious. We're going to raise our stop loss to $153.45. More conservative traders may want to exit early or raise their stop even higher. 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: + 3.93
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume = 516 thousand
 

Put Updates

None
 

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: 67.30 chg: -1.64 stop: n/a

BMHC continues to sink. We recently adjusted our target to breakeven at $8.20 but aggressive traders may want to aim higher. 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.

Picked on December 18 at $ 80.95
Change since picked: -13.65
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 527 thousand

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Encana Corp. - ECA - close: 41.31 chg: +0.81 stop: n/a

ECA dipped under support at the $40.00 level this morning before rebounding. 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: - 4.25
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Loews Corp. - LTR - close: 92.26 change: -0.26 stop: n/a

LTR continues to sink on big volume but today saw a decent rebound from its lows. It may be time for an oversold bounce. 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: - 3.46
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

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Ryland Group - RYL - close: 69.75 change: -1.37 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: - 4.45
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Chico's FAS - CHS - close: 47.05 change: -0.27 stop: 45.89

Time is up. Our plan was to exit today near the closing bell. CHS is due to report earnings tomorrow and analyst estimates are at 25 cents a share.

Picked on February 14 at $ 47.61
Change since picked: - 0.56
Earnings Date 03/01/06 (confirmed)
Average Daily Volume = 1.8 million

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Google Inc. - GOOG - close: 362.62 chg: -27.75 stop: 358.00

Target achieved. We were very fortunate today. GOOG traded higher this morning and hit $397.54 before its sudden crash. Our target was the $394.00 mark. The stock took a nosedive around 10:30 this morning after comments from GOOG's CFO hit the wires. He was quoted as saying that growth will slow down. The news sent GOOG to an intraday loss of -13% (intraday low $338.51) and shares closed with a 7% decline. More than one analyst came out to defend the stock. Both Goldman Sachs and Piper Jaffray analysts said that the comments were likely taken out of context. Goldman said this is probably a buying opportunity and they stand by their $500 price target. It was interesting to see CNBC's view poll today. They asked what viewers thought about GOOG and 28% said it was a "buy" while somewhere around 56% said it was a "sell". We may not have gotten these poll numbers exactly right but you get the idea. GOOG even tried to defend itself with a press release after the market close tonight trying to shed light on their CFO's earlier statements. Don't forget that GOOG still has an analyst meeting on Thursday.

Picked on February 16 at $366.46
Change since picked: - 3.84
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 12.4 million

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Goldman Sachs - GS - close: 141.29 change: -2.53 stop: 141.45

The high-flying broker stocks were a target for profit taking today. GS took a 1.75% hit and broke down under its 21-dma on above average volume. We would have been stopped out at $141.45. We'll be watching to see if shares bounce from the $140.00 level.

Picked on February 22 at $145.53
Change since picked: - 4.24
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 3.4 million
 

Dropped Putss

Apollo Group - APOL - close: 49.38 chg: -9.09 stop: 60.01

Wow! We thought APOL looked weak but we didn't expect today's gap down. Before the opening bell APOL issued an earnings warning. Analysts were expecting Q2 profits in the 0.54/share region but APOL just said they'll fall in the 0.43-0.44 zone. The market reacted and APOL gapped lower to open at $50.62. Our target was the $53.00-52.50 range but we're adjusting our exit to $50.62 due to the gap down. If you have not exited yet more aggressive traders may want to hold on and see how far APOL falls but we'd certainly tighten the stop significantly (maybe $52.05).

Picked on February 19 at $ 58.06
Change since picked: - 8.68
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.0 million
 

Dropped Strangles

None
 

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