Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Cigna - CI - close: 126.43 change: -1.08 stop: 121.90

Hmm... bearish analyst comments on rival UnitedHealth (UNH) sparked some profit taking in the healthcare sector. UNH did rebound off its lows of the session but the weakness was also felt in shares of CI. We don't see any change from our weekend update on CI. Our target is the $129.75-130.00 range so we're not suggesting new bullish positions at this time. The P&F chart points to a $166 target.

Picked on February 26 at $124.57
Change since picked: + 1.86
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 944 thousand

---

Cummins Inc. - CMI - cls: 104.60 change: -0.06 stop: 102.49

Be careful here. CMI gapped higher this morning and opened at $105.25 but failed to hold on to its gains and faded back to close about even, which essentially filled the gap from this morning. Our trigger was to buy calls at $105.05 and we've adjusted our entry to this morning's gap higher. What we don't like is that today's session is effectively a failed rally. That's a dangerous spot to consider long positions. We would wait for a new move over $105.05 or $105.50 before considering new long positions. Our short-term target is the $109.75-110.00 range.

Picked on March 13 at $105.25*gap higher*
Change since picked: - 0.45
Earnings Date 04/20/06 (unconfirmed)
Average Daily Volume = 867 thousand

---

Garmin Ltd. - GRMN - cls: 74.66 change: -0.11 stop: 69.75

The sideways action in GRMN doesn't help. The stock's bullish momentum is still fading. The overall pattern remains bullish but shares are starting to look like they need a pull back before they go higher. Watch the simple 10-dma to act as short-term support. Our target is the $77.00-78.00 range. The Point & Figure chart points to an $85 target.

Picked on March 02 at $ 72.70
Change since picked: + 1.96
Earnings Date 02/22/06 (confirmed)
Average Daily Volume = 1.2 million

---

Hartford Fin. Srv. - HIG - cls: 81.92 chg: +0.37 stop: 79.95

We do not see any change from our weekend update on HIG. We are not suggesting new bullish positions at this time.

Picked on February 14 at $ 82.12
Change since picked: - 0.20
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million

---

Hydril - HYDL - close: 70.38 change: +0.15 stop: 66.95

A strong bounce in crude oil futures helped fuel a decent rebound in the oil sector but unfortunately HYDL did not participate. Instead the stock churned sideways above the $70.00 level for most of the session. We did notice that the MACD indicator has produced a new buy signal. We do not see any other changes from our weekend update and we would still consider new bullish positions here or on a bounce in the $68.00 or $69.00 region. Our target is the $77.50-80.00 range.

Picked on March 12 at $ 70.23
Change since picked: + 0.15
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 289 thousand

---

Altria Group - MO - close: 73.50 chg: +0.44 stop: 71.85

We may be having a technical malfunction here with MO. Our Qcharts chart shows that resistance is at the $74.00 level but a stockcharts.com chart shows resistance at the $73.00 level and that MO has broken out above resistance. We're going to stick by our strategy to go long at $74.11 but more aggressive traders may want to go long calls right here above $73.00. If triggered we'll target a rally into the $77.50-78.00 range. More aggressive traders may want to aim higher.

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

---

Toyota Motor Corp. - TM - close: 106.90 chg: +0.22 stop: 104.75

Monday proved to be another strong day for the Japanese stock market. The NIKKEI 225 index rallied over 245 points to 16,361; marking its third day of gains. We're surprised that shares of TM did not move more strongly today. In the news TM announced it would build up to 100,000 Camrys a year at its Subaru plant in Indiana. We don't see any changes from our weekend update. We're going to target the $112.50-115.00 range.

Picked on March 12 at $106.68
Change since picked: + 0.22
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 438 thousand

---

Ultra Petrol. - UPL - close: 54.24 change: +1.43 stop: 51.95

A strong rally in crude oil helped fuel the 2.7% gain in shares of UPL. The stock has finally broken its six-week trendline of lower highs but it has not yet broken resistance at the $55.00 level. Aggressive traders might want to go long early right here. The MACD has finally produced a new buy signal. We're going to stick to our strategy with a trigger to buy calls at $55.05. If triggered we will target a move into the $59.00-60.00 range.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 1.7 million

---

Valero Energy - VLO - close: 55.65 change: +2.11 stop: 53.49

Monday proved to be a strong day for refining stocks. VLO surged 3.9% higher and looks ready to challenge resistance at its simple 50-dma (56.16). We are suggesting that traders wait for a breakout over resistance in the $57.00-57.50 region and use a trigger at $57.55 to buy calls. If triggered we'll target the $62.50-63.00 range. Keep an eye on shares of Sunoco (SUN). SUN is bouncing back toward the top of its trading range and resistance near its 100-dma (79.47) and the $80.00 level. We might consider bullish positions if SUN breaks out over $80.00.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = million
 

Put Updates

Amgen - AMGN - close: 73.59 change: +0.10 stop: 75.05

The BTK biotech sector index didn't do much today and neither did shares of AMGN. The stock added 10-cents, which reverses Friday's minor loss. The overall pattern remains bearish for AMGN but traders might want to see a new relative low (under 72.82) before initiating new put positions. Our target is the $70.10-70.00 range.

Picked on March 09 at $ 73.58
Change since picked: + 0.01
Earnings Date 04/20/06 (unconfirmed)
Average Daily Volume = 10.1 million

---

KB Home - KBH - close: 63.34 chg: +0.10 stop: 68.05

Homebuilders did not make much progress today either. Shares of KBH appeared to produce a failed rally at its descending 10-dma this morning. We would have preferred to see a failed rally closer to $65.00 if you're looking for a new bearish entry point. Our target is the $60.50-60.00 range.

Picked on March 06 at $ 64.75
Change since picked: - 1.41
Earnings Date 03/22/06 (confirmed)
Average Daily Volume = 1.9 million

---

Phelps Dodge - PD - close: 67.44 change: -1.22 stop: 70.03

Good news. There was no follow through on PD's bullish engulfing candlestick pattern from Friday. The stock produced a failed rally under resistance at its 100-dma and the $70.00 level. However, we're not out of the woods yet. We would probably wait for a move under $66.00 before considering new bearish positions. Our split-adjusted target is the $62.00-61.50 range. We are adjusting our stop loss to $70.03.

Picked on March 09 at $ 66.45 *post split price
Change since picked: + 0.99
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 2.8 million

---

Unibanco Brasilrs - UBB - close: 78.90 chg: -0.45 stop: 83.26

In spite of some merger news in the financials today the banking indices did not make much progress. Shares of UBB reflected this relative weakness with a failed rally pattern on Monday. This looks like a new entry point to buy puts but more conservative traders may want to see a little more follow through under its simple 50-dma (78.91). Our target is the $71.50-70.00 range.

Picked on March 09 at $ 77.44
Change since picked: + 1.46
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 755 thousand
 

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.)

---

Encana Corp. - ECA - close: 44.18 chg: +1.39 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.

Suggested Options:
We are not suggesting new strangle positions in ECA.

Annotated chart:

Picked on January 10 at $ 45.56
Change since picked: - 1.38
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

---

Loews Corp. - LTR - close: 96.22 change: +1.18 stop: n/a

Time is running out for our speculative, high-risk strangle play in LTR. We have four days left before March options expire. We are not suggesting new strangle positions.

Picked on February 13 at $ 95.72
Change since picked: + 0.50
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 513 thousand

---

Ryland Group - RYL - close: 66.09 change: +0.38 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: - 9.10
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Capital One - COF - close: 83.10 change: -6.82 stop: 87.39

Monday was a big day for COF. The company announced a $14.6 billion merger agreement to buy North Fork Bancorp (NFB). As is usually the case the shares of the acquiring company went down while shares of the takeout target went up. Today was a good example of why we like to use triggers. We are also very lucky that the company didn't wait to announce the news a few days from now after we had already been triggered. While we escaped any damage with COF's decline this is a good lesson on never putting too much capital into any one trade. Our trigger to buy calls was at $90.25. Odds of COF hitting that any time soon look slim so we're dropping COF as a bullish candidate.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/20/06 (unconfirmed)
Average Daily Volume = 1.6 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

Play Update Archives