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Call Updates

Ashland - ASH - close: 66.10 change: +0.71 stop: 64.75

Be careful here. We are urging caution with ASH. We cannot find any news or catalyst to explain it but shares of ASH gapped higher to open at $67.11 this morning and then promptly crashed right back toward support near $65.00. We have been suggesting a trigger to buy calls at $67.05 so this morning's spike higher would have opened the play. The good news here is that traders did buy the dip toward support at $65.00. The bad news is that ASH remains under resistance in the $66.50-67.00 region. We would not suggest new positions at this time. Wait for a new relative high over $67.11 before initiating new bullish call positions. Our target is the $72.00-72.50 range. The P&F chart points to a $97 target and today's spike higher has produced a new ascending triple-top breakout buy signal.

Suggested Options:
We are not suggesting new call plays at this time. However, if ASH can trade to a new relative high then we'd pick the April calls.

Picked on March 03 at $ 67.05
Change since picked: - 0.95
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 689 thousand

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Cigna - CI - close: 123.52 change: +0.21 stop: 119.90

The choppy sideways action in the major averages is not helping shares of CI. The stock is churning sideways itself between $122 and $124.50. We really hesitate to suggest new bullish long positions here with the failed rally in the DJIA and NASDAQ on Friday. A move to a new high (around $124.60) might be okay as an entry point to buy calls. Currently our target is the $129.75-130.00 range. CI's P&F chart is bullish and points to a $154 target.

Suggested Options:
We are not suggesting new bullish positions at this time. If CI can hit a new high we'd consider buying the April calls.

Picked on February 26 at $124.57
Change since picked: - 1.05
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 944 thousand

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Garmin Ltd. - GRMN - cls: 74.00 change: +1.30 stop: 67.75

GRMN is a new bullish play from our Thursday night newsletter. The stock displayed relative strength on Friday with another new high on rising volume. We don't see any change from our original play description so we are reposting it here:

Lately there have been some negative comments about GRMN facing tougher competition for its global positions and navigation systems. Yet that has not stopped the stock from breaking out to new all-time highs. What we could be seeing right now is a potential short squeeze. The latest data puts short interest at 17.4% of its 59.8 million-share float. On a technical basis we certainly like Thursday's breakout and we're going to suggest that traders consider new call positions in the $70.00-73.00 range. However, we would prefer a pull back toward the $70.50-70.00 region as our entry point but GRMN's relative strength may not produce any dips in the near term. The P&F chart is bullish and points to an $85 target. We are going to target a rally into the $77.00-78.00 range.

Suggested Options:
We are suggesting the April calls.

BUY CALL APR 70 GQR-DN open interest=4768 current ask $5.90
BUY CALL APR 75 GQR-DO open interest=7365 current ask $2.95

Picked on March 02 at $ 72.70
Change since picked: + 1.30
Earnings Date 02/22/06 (confirmed)
Average Daily Volume = 1.2 million

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Hartford Fin. Srv. - HIG - cls: 82.03 chg: -0.87 stop: 79.95

Friday's trading in HIG looks pretty bearish. The stock produced a bearish engulfing candlestick pattern and closed right at short-term support at the $82.00 level. We have very little doubt that HIG will retest the $80.00 level soon, which is another level of support bolstered by its rising 200-dma. If you do not want to risk HIG dipping to $80 and then continuing lower it might be wise to consider an early exit right here near $82.00 to limit any losses. We are not suggesting new bullish plays at this time. We'll be looking for a bounce from the $80.00 level as a potential entry point.

Suggested Options:
We are not suggesting new bullish plays at this time.

Picked on February 14 at $ 82.12
Change since picked: - 0.09
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

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Monster Wrldwde - MNST - close: 48.98 chg: -1.16 stop: 47.75

MNST is a new bullish candidate from our Thursday night newsletter. We do not see any change from our original play description so we're reposting it here:

MNST has spent the first half of February consolidating its earnings-inspired rally toward $50. The second half of February witnessed a slow climb higher and now shares are testing resistance in the $50.00-50.50 range. This is a momentum play. The stock looks very overbought from its lows in October but there's no telling where the momentum will stop. We believe that if MNST breaks out to a new high then odds are it will rally toward the $55.00 level. We're suggesting a trigger to buy calls at $50.65. If triggered we will target a rally into the $54.85-55.00 range.

Suggested Options:
We are suggesting the April calls.

BUY CALL APR 45 BSQ-DI open interest=769 current ask $5.30
BUY CALL APR 50 BSQ-DJ open interest=360 current ask $2.15
BUY CALL APR 55 BSQ-DK open interest= 64 current ask $0.65

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/03/06 (unconfirmed)
Average Daily Volume = 1.7 million

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Altria Group - MO - close: 72.11 chg: +0.50 stop: 71.85

MO's performance on Friday looks like a bounce from rising, technical support at the 200-dma. Aggressive traders might want to consider potential entry points here. We would rather wait. Many of the technical indicators are still bearish (except the daily RSI, which is starting to look positive) and MO still has short-term resistance at $74.00 and its 50-dma, now at 73.96, and its 100-dma, now at $73.70. We are suggesting that traders wait for a breakout over $74.00 and use a trigger at $74.10 to buy calls. If triggered we'll target a rally into the $77.50-78.00 range.

Suggested Options:
We are not suggesting new bullish positions at this time. If MO hits our trigger then we'd pick the April calls.

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: 95.00 chg: +0.72 stop: 89.49

The oil sector indices closed on Friday near unchanged levels but that didn't stop OXY from hitting new four-week highs. The company had some positive news on Friday. The country of Ecuador lost an appeal in a British court in a legal fight with OXY over a $75 million tax dispute (source:Reuters). Looking at shares of OXY we are not suggesting new bullish positions right now. We'd only consider new plays if we saw a bounce from the 10-dma, near $92.00. Our target is the $97.50-98.00 range. The Point & Figure chart suggests a $108 target.

Suggested Options:
We are not suggesting new bullish plays at this time.

Picked on February 21 at $ 92.00 *gap higher*
Change since picked: + 3.00
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Potash - POT - close: 97.65 chg: -1.13 stop: 92.49

The upward momentum in POT stalled a bit on Friday as traders did some profit taking ahead of the weekend. Shares are relatively close to our target, which is the $99.50-100.00 range, so we're not suggesting new bullish positions at this time. More conservative traders may want to seriously consider just exiting early right here to protect any profits.

Suggested Options:
We are not suggesting new bullish plays in POT at this time.

Picked on February 23 at $ 93.05
Change since picked: + 4.60
Earnings Date 04/29/06 (unconfirmed)
Average Daily Volume = 826 thousand

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Total - TOT - close: 126.39 change: -0.91 stop: 124.95

French oil company TOT is still struggling to gain any upward traction. Shares have drifted back toward support at its rising 200-dma but the stock can't seem to build on any bounce. We are not suggesting new bullish positions at this time. More aggressive traders can use a bounce from $125.00 or a move over the 10-dma (127.47) as a new entry point. More conservative traders can wait for a move over the 100-dma near 128.60 or the 50-dma near 130.66. If TOT does rebound then we would target the $137.00-140.00 range. The P&F chart still points to a $176 target.

Suggested Options:
We are not suggesting new bullish positions at this time.

Picked on February 16 at $127.61
Change since picked: - 1.22
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 836 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: 68.61 chg: -0.48 stop: n/a

Our time with BMHC is growing short. March options expire in just two weeks and if you want to exit ahead of the stock split then we have about a week and a half. Currently for this play to be a success we need to see BMHC continue lower and sink toward the $60.00 level. A week ago we adjusted our target to breakeven at $8.20. More conservative traders may want to adjust their target even lower to increase their chances at recouping some of their capital. 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.

Suggested Options:
We are not suggesting new strangle plays.

Picked on December 18 at $ 80.95
Change since picked: -12.34
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 527 thousand

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Encana Corp. - ECA - close: 43.91 chg: +0.68 stop: n/a

ECA has been chopping up and down in a $5.00 range for the last three weeks. We need to see ECA pick a direction and go. This sideways action is bad news for a strangle play. Fortunately, we still have some time left. 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.

Suggested Options:
We are not suggesting new strangle plays.

Picked on January 10 at $ 45.56
Change since picked: - 1.65
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Loews Corp. - LTR - close: 94.59 change: -0.03 stop: n/a

Our aggressive strangle on LTR only has two weeks left before options expire. 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.

Suggested Options:
We are not suggesting new strangle plays.

Picked on February 13 at $ 95.72
Change since picked: - 1.13
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

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Ryland Group - RYL - close: 68.43 change: -1.63 stop: n/a

Homebuilders continued to see profit taking on Friday and shares of RYL lost 2.3% to close under the $70.00 level again (and its exponential 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.

Suggested Options:
We are not suggesting new strangle plays.

Picked on January 22 at $ 75.19
Change since picked: - 5.77
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Beazer Homes - BZH - close: 63.13 change: -0.77 stop: 62.65

Homebuilders continued to be under pressure on Friday. The DJUSHB home construction index lost 1.85% and technical indicators for the sector index are definitely turning more bearish. Shares of BZH could not handle the pressure and broke down intraday under technical support at its simple (and exponential) 200-dma. We have been stopped out at $62.65.

Picked on February 15 at $ 65.05
Change since picked: - 1.92
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.2 million

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MDC Holdings - MDC - close: 60.10 chg: -0.55 stop: 61.15

MDC is another homebuilder caught up in a two-week long sell-off that doesn't seem to be showing any signs of stopping. We had been suggesting that readers buy calls on a breakout over $65.00 with a trigger at $65.05. The play has never been triggered so we're dropping MDC as a candidate. If the stock moves under the February low and it might be time to evaluate MDC as a bearish candidate.

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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Prudential - PRU - close: 74.73 change: -0.86 stop: 74.95

The breakout in PRU has failed. The stock continued to sink on Friday and traded below round-number support at $75.00 and technical support at its 50-dma. We were stopped out at $74.95. If PRU continues to sink and trades under the 100-dma, then traders might want to consider bearish positions and target the 200-dma near $70.00.

Picked on February 24 at $ 77.10
Change since picked: - 1.51
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 1.9 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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