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Call Updates

Cummins Inc. - CMI - cls: 105.32 change: -2.85 stop: 103.85*new*

Watch out! The sell-off in CMI began to pick up speed midday after the stock produced a failed rally near $108.00 around 12:00 noon. The breakdown under $106.00 and its simple 10-dma is short-term bearish. More conservative traders may want to exit early right now and protect their capital or at least raise their stop loss. We are not suggesting new bullish positions at this time. Please note that we are adjusting our stop loss to $103.85. If we get stopped out we can always watch for a bounce from $102 or its 50-dma as a new entry point.

Picked on March 13 at $105.25*gap higher*
Change since picked: + 0.07
Earnings Date 04/20/06 (unconfirmed)
Average Daily Volume = 867 thousand

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Hartford Fin. Srv. - HIG - cls: 82.05 chg: -0.79 stop: 79.95

We see no change from our previous updates on HIG. The stock is struggling under its 50-dma. Odds are very good that HIG will retest support near $81.00 and probably test support at its 200-dma near $80.00. We are not suggesting new bullish positions but we are watching for a bounce from $80.00 as a potential entry point. Should HIG trade under our stop loss investors might want to consider short-term bearish positions.

Picked on February 14 at $ 82.12
Change since picked: - 0.07
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Hydril - HYDL - close: 72.76 change: -0.79 stop: 69.49

Oil stocks closed relatively unchanged today but the OIX and OSX oil indices and shares of HYDL all have similar failed-rally patterns given today's bearish reversal in the market. We are not suggesting new bullish positions in HYDL. More conservative traders may want to exit early. We do expect that HYDL will pull back and test support near $70.00 and its 100-dma.

Picked on March 12 at $ 70.23
Change since picked: + 2.43
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 289 thousand

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ITT Industries - ITT - close: 56.01 change: -0.34 stop: 51.69

Conservative traders may want to jump out early in ITT right now. The stock has produced a small bearish engulfing reversal pattern today. Now we will agree that ITT is short-term overbought and due for a pull back. Profit taking here would be normal. Yet traders should ask themselves, "do you want to exit now with a small gain and consider re-entering again later or hope that ITT bounces from support near $54.00?" The overall pattern remains bullish on ITT and the current rally has been fueled by above average volume, which is also bullish. We would watch for a bounce near $54.00 as a new bullish entry point.

Picked on March 15 at $ 53.84
Change since picked: + 2.17
Earnings Date 04/28/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Macerich Co. - MAC - close: 72.99 change: -0.64 stop: 69.95

MAC is still consolidating sideways although shares display the same ominous failed rally pattern so prevalent across the market in today's session. We are not suggesting new bullish positions at this time. Wait for a new move over $74.15 before considering buying calls.

Picked on March 16 at $ 74.05
Change since picked: - 1.06
Earnings Date 05/16/06 (unconfirmed)
Average Daily Volume = 371 thousand

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Altria Group - MO - close: 72.46 chg: -1.13 stop: 71.85

Bulls should be careful here. Shares of MO turned sharply weaker midday and this marks the fifth day in its current consolidation phase. The problem we have is that if MO continues to consolidate lower toward tested support at its simple 200-dma (near 71.44) the stock will hit our stop loss at $71.85. More aggressive traders may want to increase their risk and widen their stop placing it under the 200-dma (say 70.99). More conservative traders may want to inch their stop loss closer to the $72.00 level to take them out earlier if MO continues to sink tomorrow.

Picked on March 14 at $ 74.11
Change since picked: - 1.68
Earnings Date 04/19/06 (unconfirmed)
Average Daily Volume = 8.1 million

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Silicon Labs - SLAB - close: 47.70 change: +0.06 stop: 45.95

SLAB tried to rally today and actually traded above round-number resistance at the $50.00 level for a brief moment. Unfortunately, SLAB could not escape the bearish reversal in the semiconductor sector. We remain on the sidelines. We're suggesting that readers use a trigger at $51.05 to buy calls. If triggered we will target a rally into the $54.90-55.00 range. More aggressive traders may want to target the $58.00-60.00 range. Should SLAB close under its 50-dma we'll drop it as a bullish candidate.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Toyota Motor Corp. - TM - close: 109.10 chg: -0.01 stop: 104.75

We do not see any change from our previous update on TM. The overall pattern remains bullish and TM shares remain above resistance at the $109.00 level. Our target is the $112.50-115.00 range. Traders with a longer-term horizon may want to aim higher.

Picked on March 12 at $106.68
Change since picked: + 2.42
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 438 thousand

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Valero Energy - VLO - close: 56.83 change: +0.08 stop: 53.49

VLO is certainly faring better than its rival SUN. The stock managed to close in the green but shares still produced an intraday failed rally. We are not suggesting new bullish positions in VLO at this time. Our target is the $62.50-63.00 range.

Picked on March 15 at $ 57.55
Change since picked: - 0.72
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 10.7 million

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Vertex Pharma - VRTX - close: 37.95 chg: -2.24 stop: 37.49

VRTX's upward momentum has failed. We are suggesting that traders run for the exits. Weighing on the stock is the BTK. The BTK biotech index broke down today out of a two-week trading range and the BTK index closed under its simple 50-dma. Shares of VRTX still have technical support at their rising 50-dma (37.30), which it has not broken in many months, but to test the 50-dma the stock would hit our stop loss at $37.49. More aggressive traders may want to widen their stops. We are not suggesting it.

Picked on March 19 at $ 40.56
Change since picked: - 2.61
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 1.5 million
 

Put Updates

Biosite Inc. - BSTE - close: 50.30 chg: -0.61 stop: 52.55

We are surprised that BSTE did not show more weakness today given the 1.9% sell-off in the BTK index. BSTE did produce a failed rally today but shares are still clinging to the $50.00 level. We are suggesting a trigger at $49.75 to buy puts since the $50.00 mark is acting as round-number support. The $49.00 level is also support and more conservative traders may want to wait for a breakdown under $49.00 before initiating positions. Our target will be the $45.25-45.00 range.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/25/06 (unconfirmed)
Average Daily Volume = 261 thousand

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Gannett Co Inc. - GCI - close: 59.12 chg: +0.31 stop: 61.76

Reversal alert! GCI has produced a bullish engulfing candlestick, which tends to forecast a bullish reversal. We would not suggest new bearish positions at this time. Watch for the stock to fail near $60.00-60.50 before considering new positions.

Picked on March 19 at $ 59.04
Change since picked: + 0.08
Earnings Date 04/12/06 (confirmed)
Average Daily Volume = 1.1 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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Encana Corp. - ECA - close: 46.12 chg: +0.27 stop: n/a

We do not see any changes from our weekend update on ECA. 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: + 0.56
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 67.64 change: -1.12 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: - 7.55
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Sunoco Inc. - SUN - close: 76.18 change: +0.81 stop: 74.99

We have been stopped out of SUN at $74.99. Of course Murphy's law is alive and the stock quickly rebounded since shares are testing the bottom of its trading range. Yesterday's "sell" rating downgrade didn't help matters.

Picked on March 16 at $ 80.26
Change since picked: - 4.08
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 2.4 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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