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Call Updates

Anadarko Petrol. - APC - close: 102.65 chg: +1.55 stop: 96.95

Oil stocks turned in a strong session. Investors looked past a rise in crude inventories and reacted to a big draw down in gasoline. The OIX oil index rose 1% and the OSX oil services index rose 1.69%. Shares of APC bounced back above the $102 level and its 50-dma. This looks like a new bullish entry point to buy calls. Our target is the $109.50-110.00 range. We do not want to hold over the late April earnings report.

Picked on March 28 at $102.10
Change since picked: + 0.55
Earnings Date 04/28/06 (unconfirmed)
Average Daily Volume = 2.5 million

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Burlington NrthSanta Fe - BNI - cls: 82.27 chg: +1.20 stop: 78.99

The rally in the transport stocks lagged behind the rest of the market but not so for railroad shares of BNI. The stock rose 1.48% on decent volume to close above the $82.00 level. This looks like a new bullish entry point to buy calls but more conservative traders may want to wait for a new high. Our target is the $87.50-90.00 range. We do not want to hold over BNI's late April earnings report.

Picked on March 27 at $ 82.51
Change since picked: - 0.24
Earnings Date 04/25/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Bear Stearns - BSC - close: 139.03 change: +1.48 stop: 131.99

The broker stocks reversed yesterday's weakness and BSC came very close to erasing its own losses from Tuesday. The stock looks poised to breakout over the $140.00 level. Our target is the $144-145.00 range.

Picked on March 24 at $137.65
Change since picked: + 1.38
Earnings Date 06/15106 (unconfirmed)
Average Daily Volume = 1.1 million

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Deere Co - DE - close: 79.42 change: +0.91 stop: 74.95

Good news. This morning an analyst firm downgraded the heavy machinery sector. While the news affects shares of CAT more than DE investor reaction in DE could have been more bearish. The stock did gap down this morning but traders bought the dip near $78.00. The stock rallied back into the green for a decent gain and looks close to breaking out over the $80 level. 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: + 2.13
Earnings Date 05/16/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Grainger W.W.Inc. - GWW - close: 75.63 change: +0.71 stop: 73.95

GWW is inching back toward the top of its short-term trading range near $76.00. We want to catch a breakout over $76.00 but we're suggesting a trigger at $76.51 to buy calls. 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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Lehman Brothers - LEH - close: 143.92 change: +1.59 stop: 140.79

LEH bounced strongly from the market open this morning but it struggled near the $146 level. Volume was well above the daily average on today's rebound but we remain somewhat cautious given the afternoon pull back. The overall long-term pattern remains bullish. Traders can choose to buy calls here or wait for a move over $146.00. We do expect some resistance near $150 but our target is the $153-155 range.

Picked on March 22 at $144.61
Change since picked: - 0.69
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million

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MedcoHealth - MHS - close: 58.86 change: -0.50 stop: 57.95

MHS is still stuck in its $58-60 trading range. We would not suggest new positions until MHS trades over $60.00 or better yet over Monday's high at $60.64.

Picked on March 24 at $ 60.05
Change since picked: - 1.28
Earnings Date 04/25/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Nabors Inds. - NBR - close: 70.70 chg: +0.87 stop: 64.99

NBR displayed a little bit of volatility today with a dip back to $69.31 but traders bought the dip and shares broke out over the $70.00 level. This marks the seventh gain in a row. NBR is short-term overbought and due for a pull back. We would expect the simple 50-dma overhead to act as resistance. The $68 level should act as support. Our target is the $74.00-75.00 range. Please note that NBR is set to split 2-for-1 on April 18th. Our post-split target will be $37.00. We do not want to hold over the late April earnings report.

Picked on March 28 at $ 68.85*gap higher*
Change since picked: + 1.85
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 3.7 million

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Pantry Inc. - PTRY - close: 62.48 chg: +0.37 stop: 58.85

It was a relatively quiet session for PTRY until the afternoon spike higher. Volume was pretty low today. Traders can choose to buy calls here or look for a dip into the $60.50-60.00 region. Our target is the $67.00-68.00 range. We do not want to hold over the late April earnings report.

Picked on March 26 at $ 61.85
Change since picked: + 0.63
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 364 thousand

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Rio Tinto - RTP - close: 198.99 chg: +3.94 stop: 189.90

RTP almost completely erased yesterday's losses. Some weakness in the U.S. dollar and the market-wide rally helped fuel a big gain in the metal and mining stocks. The XAU index rose 3.4%. Shares of RTP added 2%. Traders might want to add new call positions on a move over $200. Our target is the $210-212 range.

Picked on March 26 at $198.60
Change since picked: + 0.39
Earnings Date 02/06/06 (confirmed)
Average Daily Volume = 326 thousand

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Schlumberger - SLB - close: 126.80 chg: +2.22 stop: 118.99

It was another strong day for oil stocks and a nice day for SLB. Shares of SLB added 1.78% to close near a new two-month high. We are targeting a rally into the $129.75-130.00 range. The P&F chart is bullish and points to a $144 target. Please note that SLB is due to split 2-for-1 on April 10th. Our post-split target will be the $64.87-65.00 range. We do not want to hold over the April 21st earnings report.

Picked on March 23 at $123.02
Change since picked: + 3.78
Earnings Date 04/21/06 (unconfirmed)
Average Daily Volume = 6.2 million

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Toyota Motor Corp. - TM - close: 109.26 chg: +1.74 stop: 104.99

TM completely erased yesterday's losses with a 1.6% gain today. The stock is now approaching round-number resistance at the $110 level. Volume continues to be very light, which doesn't suggest a lot of conviction either way. We are not suggesting new bullish positions at this time. 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: + 2.58
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 438 thousand

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Tenaris - TS - close: 180.65 chg: +2.56 stop: 177.79

TS did rebound today but the stock pared its gains late in the session. We remain on the sidelines. We are suggesting a trigger to buy calls at $186.75. If triggered we will target a rally into the $198-200.00 range, which is consistent with the bullish P&F chart target.

Picked on March xx at $xxx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/01/06 (unconfirmed)
Average Daily Volume = 553 thousand

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Valero Energy - VLO - close: 60.33 change: +0.47 stop: 54.49

It was a minor victory today with VLO's close over the $60.00 mark. Volume is improving somewhat. The simple 10-dma appears to be acting as short-term support. We do not see any changes from our previous updates. Our target is the $62.50-63.00 range.

Picked on March 15 at $ 57.55
Change since picked: + 2.78
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Put Updates

Biosite Inc. - BSTE - close: 51.15 chg: +1.33 stop: 52.05 *new*

Watch out! Bears should go on red alert. The stock completely reversed yesterday's losses and Tuesday's breakdown now looks like a bear trap. BSTE still has some resistance overhead but if the market continues to rally higher then odds rise significantly of getting stopped out. We are not suggesting new put positions. We are going to lower our stop loss to $52.05 but more conservative traders might want to try 51.75 or 51.65.

Picked on March 28 at $ 49.75
Change since picked: + 1.40
Earnings Date 03/25/06 (unconfirmed)
Average Daily Volume = 261 thousand

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Gannett Co Inc. - GCI - close: 59.40 chg: +0.50 stop: 60.65 *new*

We are growing more cautious with GCI as well. The stock rebounded to the top of its short-term trading range and closed over the 10-dma. At this point we would expect shares to test resistance at $60.00 and maybe the $60.50 level. We're going to adjust our stop loss down to $60.65. Don't forget that we plan to exit ahead of the April 12th earnings report.

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: 47.97 chg: +0.89 stop: n/a

ECA appears to be on the verge of a bullish breakout near $48.50 and its six-month trendline of resistance. 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: + 2.41
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 71.06 change: +0.15 stop: n/a

There was no follow through on yesterday's bearish reversal in RYL. That's bad news for the bears but it may be noteworthy that the homebuilders were some of the worst performers in today's widespread rally. 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).

Picked on January 22 at $ 75.19
Change since picked: - 4.13
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Cleveland Cliffs - CLF - close: 89.76 chg: -0.19 stop: 89.45

Metal and mining stocks rebounded pretty strongly today but not so for shares of CLF. The stock continued to under perform and we were stopped out at $89.45. The MACD indicator on the daily chart looks like it's hinting at a new sell signal. Volume was very strong on today's session.

Picked on March 26 at $ 94.14
Change since picked: - 4.38
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 545 thousand

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Silicon Labs - SLAB - close: 55.88 change: +5.61 stop: 47.65

Target achieved. This morning before the bell an analyst firm released their opinion that SLAB's first half for 2006 could be positive based on the company's growth into the cell-phone industry's use of FM-tuner chips. The stock soared to close with an 11.15% gain on big volume. Our target was the $54.90-55.00 range. We are closing the play but more aggressive traders may want to keep the play open. The weekly chart suggests that SLAB could reach the $59-60 region. This is a new 18-month high for the stock.

Picked on March 23 at $ 51.05
Change since picked: + 4.83
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 1.2 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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