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Call Updates

Burlington NrthSanta Fe - BNI - cls: 80.03 chg: -1.07 stop: 78.99

Transportation stocks were hit with a good round of profit taking on Thursday. The Dow Transportation index lost almost 2% and shares of BNI closed with a 1.3% loss. Of course a quick look at the chart and you'll see that traders bought the dip and BNI closed well off its lows for the session. We are sticking to the game plan and suggesting that readers use a trigger at $82.51 to buy calls. If triggered we'll target a rally into the $87.50-90.00 range. We do not want to hold over BNI's late April earnings report.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/25/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Bear Stearns - BSC - close: 137.02 change: +0.65 stop: 131.99

BSC continues to show relative strength in spite of the weakness in financials and the brokers on Thursday. The stock inched higher and almost hit our trigger to buy calls but so far we remain on the sidelines. We're suggesting that traders use a trigger at $137.65 as their entry point. If triggered we're going to target a rally into the $144.00-145.00 range.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/15/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Cummins Inc. - CMI - cls: 104.77 change: -2.23 stop: 103.85

We can probably blame it on interest rate concerns that shares of CMI failed to see any follow through on Wednesday's bounce. The stock came within 15 cents of our stop loss this morning and we don't have an optimistic outlook for tomorrow. More conservative traders may just want to exit early right here to protect their capital. The stock is on the verge of breaking its upward, bullish pattern.

Picked on March 13 at $105.25*gap higher*
Change since picked: - 0.48
Earnings Date 04/20/06 (unconfirmed)
Average Daily Volume = 867 thousand

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Deere Co - DE - close: 78.00 change: +0.71 stop: 74.95

So far so good. Shares of DE continued to rebound on Thursday and volume came in above average on the gain. We don't see any change from our play description from Wednesday night. This remains a somewhat aggressive entry point with DE under resistance in the $79.00-79.40 region. More conservative traders may want to wait for a move over 79.50 or even the $80.00 mark before considering new bullish plays. Our target is the $84.00-85.00 range. The P&F chart is bullish and points to a $112 target.

Picked on March 22 at $ 77.29
Change since picked: + 0.71
Earnings Date 05/16/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Grainger W.W.Inc. - GWW - close: 75.25 change: -0.75 stop: 73.95

GWW's lack of follow through on yesterday's new high makes us glad that we are using a trigger with this play. For the most part we do not see any change from Wednesday's new play description. We're going to suggest a trigger to buy calls at $76.51. If triggered we'll target a rally into the $79.90-80.00 range. The P&F chart is bullish with a triple-top breakout buy signal pointing to a $90 target.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/15/06 (unconfirmed)
Average Daily Volume = 449 thousand

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Hartford Fin. Srv. - HIG - cls: 82.15 chg: -0.72 stop: 79.95

There is still no change in HIG as the stock consolidates under the 50-dma.

Picked on February 14 at $ 82.12
Change since picked: + 0.03
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Hydril - HYDL - close: 76.99 change: +2.44 stop: 71.95*new*

The oil sector continued to rise today. A surprise decline in inventory numbers and more violence in Nigeria helped crude oil futures rise toward $64 a barrel. Shares of HYDL broke out over the $76.00 level on a 3.2% rally. The stock is nearing our target in the $77.50-80.00 range. More conservative traders should strongly consider exiting early right here! We're raising our stop loss to $71.95.

Picked on March 12 at $ 70.23
Change since picked: + 6.76
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 289 thousand

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Lehman Brothers - LEH - close: 143.80 change: -0.81 stop: 140.79

The bounce in LEH paused today as financial-related securities turned red on interest-rate concerns. Traders might want to wait for a move over $145.00 or $146.00 before initiating new positions. We do expect some resistance in the $149-150 region but LEH looks like it has the momentum to breakout higher. Conservative traders may want to exit near $149. We're going to aim for the $153.00-155.00 range.

Picked on March 22 at $144.61
Change since picked: - 0.81
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million

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ITT Industries - ITT - close: 56.45 change: -0.08 stop: 51.69

ITT is still consolidating sideways in the $56.00-56.70 range. We are not suggesting new positions with the stock this close to our $57.00-58.00 target range. More conservative traders may just want to exit right here!

Picked on March 15 at $ 53.84
Change since picked: + 2.61
Earnings Date 04/28/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Macerich Co. - MAC - close: 73.14 change: +0.01 stop: 69.95

MAC is still consolidating sideways but at least the stock is hinting that it's about ready to move higher. Wait for a new move over $74.15 before considering buying calls. Our target is the $79.00-80.00 range.

Picked on March 16 at $ 74.05
Change since picked: - 0.91
Earnings Date 05/16/06 (unconfirmed)
Average Daily Volume = 371 thousand

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MedcoHealth - MHS - close: 58.65 change: -0.54 stop: 57.95

There was no follow through on yesterday's bounce in MHS. That's okay for now since we're using a trigger to open plays at $60.05. If triggered we'll target a rally into the $64.50-65.00 range. The P&F chart already points to a $68 target.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/25/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Altria Group - MO - close: 72.75 chg: -0.54 stop: 71.85

Lack of follow through on yesterday's bounce in MO is not a positive sign. The daily chart's MACD is nearing a new sell signal. Traders may want to call it quits on MO early right here and protect capital. Conservative traders may want to exit tomorrow anyway since the markets are expecting a big court decision about the tobacco industry appeal in the Illinois supreme court on Monday.

Picked on March 14 at $ 74.11
Change since picked: - 1.36
Earnings Date 04/19/06 (unconfirmed)
Average Daily Volume = 8.1 million

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Silicon Labs - SLAB - close: 52.05 change: +2.79 stop: 46.95 *new*

The SOX semiconductor index may have closed in the green today but the index is still stuck in a down trend. Yet that didn't stop shares of SLAB, which surged on strong volume to breakout through resistance at the $51.00 level. Our trigger to buy calls was at $51.05. The daily chart's MACD indicator has produced a new buy signal. The P&F chart has also produced a triple-top breakout buy signal. Our target is the $54.90-55.00 range but more aggressive traders may want to aim higher toward the $58-60 region. We are raising our stop to $46.95 under the 50-dma.

Picked on March 23 at $ 51.05
Change since picked: + 1.00
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Toyota Motor Corp. - TM - close: 107.20 chg: -1.77 stop: 104.75

We cannot find any news to explain the weakness in shares of TM today. Most Asian markets were higher today following yesterday's rally in the U.S. markets but the Japanese NIKKEI closed near the unchanged mark after a midday bearish reversal. We are not suggesting new bullish positions in TM at this time. We are going to inch up our stop loss to $104.99, just under round-number support at $105.00 and technical support at the 50-dma near 105.50. 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: + 0.52
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 438 thousand

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Valero Energy - VLO - close: 58.80 change: +1.34 stop: 53.49

Another strong day for oil stocks helped VLO rebound higher after testing support near its rising 10-dma. The next hurdle for VLO bulls is the $60.00 level. Our target is the $62.50-63.00 range.

Picked on March 15 at $ 57.55
Change since picked: + 1.25
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Put Updates

Biosite Inc. - BSTE - close: 51.25 chg: +0.25 stop: 52.55

We are still on the sidelines with BSTE. 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: 59.40 chg: +0.35 stop: 61.76

Sometimes the market doesn't make sense. GCI issued negative news today but the stock bounced higher anyway. The company said that earnings would come in toward the bottom of their previous forecasts. Maybe investors were expecting worse news or a true earnings warning and were relieved that GCI is still guiding inside its forecasted range. The overall pattern on GCI remains bearish and we would watch for a failed rally in the $60.00 region as a new bearish entry point. Our target is the $55.25-55.00 range.

Picked on March 19 at $ 59.04
Change since picked: + 0.36
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: 46.78 chg: +0.48 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: + 1.22
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 70.56 change: +2.48 stop: n/a

Homebuilders rallied big today after a surprisingly positive report on exiting home sales last month. This is bad news for our strangle. Conservative traders may want to exit early to salvage some trading capital. 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: - 4.63
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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