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Call Updates

Apple Computer - AAPL - close: 62.72 chg: -0.03 stop: 57.65

Shares of AAPL churned sideways on Friday with its trading range narrowing somewhat into the afternoon. Volume was light. This remains an aggressive, speculative buy the bounce play. AAPL's P&F chart is bearish and points to a $52 target but the stock rebounded pretty sharply on Wednesday from its simple 200-dma. Most of the technical indicators on the daily chart have been stuck in oversold territory and shares were due for a bounce. Traders can choose to buy calls here but it might be better to wait. Look for a dip toward the $60 region and then look for a bounce. We have been aiming for the simple 50-dma but that means we have a moving target. Currently the 50-dma is at $67.85. We're going to adjust our target to the $67.00-68.00 range. More conservative traders might want to tighten their stops closer to the $60 level.

Suggested Options:
We are suggesting the April calls but watch for a dip back toward $60.00. We do not want to hold over the April earnings report.

Picked on March 29 at $ 62.30
Change since picked: + 0.39
Earnings Date 04/19/06 (unconfirmed)
Average Daily Volume = 34.2 million

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Anadarko Petrol. - APC - cls: 101.01 chg: -1.99 stop: 97.90*new*

A pull back in crude oil prices on Friday sparked some end of the week profit taking in the oil sector. Shares of APC gapped lower and dipped to the $99.91 level before bounce. This actually looks like a potential entry point to buy calls but we would wait for a new move over the $102.00 level before initiating new positions. The P&F chart for APC is bullish with a spread triple-top breakout buy signal pointing to a $121 target. We are aiming for the $109.50-110.00 range. We are adjusting our stop loss to $97.90. We do not want to hold over the late April earnings report.

Suggested Options:
We are suggesting the May calls but plan to exit ahead of the late April earnings report.

BUY CALL MAY 100 APC-ET open interest=3877 current ask $5.70
BUY CALL MAY 105 APC-EA open interest=1834 current ask $3.40

Picked on March 28 at $102.10
Change since picked: - 1.09
Earnings Date 04/28/06 (unconfirmed)
Average Daily Volume = 2.5 million

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Burlington NrthSanta Fe - BNI - cls: 83.33 chg: +0.22 stop: 78.99

A dip in oil prices lent some strength to the transports but gains were muted. Shares of BNI closed higher but only after another failed breakout at the $84.00 level. The overall pattern for BNI remains bullish. This past week the stock broke out over resistance in the $82.00-82.50 region to hit new all-time highs. The P&F chart hit a new buy signal and points to a $105 target. We would consider new bullish positions here but traders should be ready for a dip back toward the $80.00 level, which should be round-number support. Our target is the $87.50-90.00 range. We do not want to hold over BNI's late April earnings report. In the news on Friday BNI announced plans to expand rail capacity in Missouri, New Mexico, Texas, Washington, and Wyoming.

Suggested Options:
We are suggesting the May calls but we plan to exit ahead of the April earnings announcement.

BUY CALL MAY 80.00 BNI-EP open interest=428 current ask $5.40
BUY CALL MAY 85.00 BNI-EQ open interest=298 current ask $2.45

Picked on March 27 at $ 82.51
Change since picked: + 0.82
Earnings Date 04/25/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Bear Stearns - BSC - close: 138.70 change: +0.25 stop: 131.99

The XBD broker-dealer index managed to close in the green on Friday and close near an all-time high. The sector remains positive although the trading action in BSC is starting to look like a short-term top. Short-term technical oscillators for BSC are hinting at a further consolidation, probably toward the $136 region. Yet the stock could bounce at the 10-dma (137.25) or the 21-dma (134.92). We would watch for a dip before considering new bullish positions at this time. Our target is the $144-145.00 range.

Suggested Options:
We like the May calls although we'd watch for a dip before considering new positions.

Picked on March 24 at $137.65
Change since picked: + 1.05
Earnings Date 06/15106 (unconfirmed)
Average Daily Volume = 1.1 million

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ConocoPhillips - COP - close: 63.15 chg: -1.33 stop: 61.45

After a bullish week COP suffered some profit taking on Friday following a dip in crude oil futures. It looks like the bulls were defending the stock near technical support at the 200-dma (62.65). We would use any bounce above the $62.00 level as a new bullish entry point. More conservative traders may want to wait for a new move over $64.00 before initiating new call positions. Our target for COP is the $69-70 range. The P&F chart for COP is bullish with a triangle breakout and an $82 target. Statistics show that a bullish triangle breakout in a positive market is one of the best performing patterns to trade. Don't forget that COP is due to complete its acquisition of BR this weekend and we don't know if the transaction will have an impact on COP's shares come Monday.

Suggested Options:
We are suggesting the May calls but we plan to exit ahead of the April earnings report.

BUY CALL MAY 60.00 COP-EL open interest=14888 current ask $4.60
BUY CALL MAY 65.00 COP-EM open interest=28249 current ask $1.85

Picked on March 29 at $ 64.80
Change since picked: - 1.65
Earnings Date 04/26/06 (unconfirmed)
Average Daily Volume = 10.5 million

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Deere Co - DE - close: 79.05 change: -0.73 stop: 74.95

DE displayed relative strength most of the week and the stock hit a new high just under the $80.00 mark so it's not too much of a surprise to see some profit taking on Friday. We would watch for a dip into the $77.50-78.00 region and use it as a new bullish entry point to buy calls. More conservative traders may just want to wait for a breakout over the $80.00 mark. Our target is the $84.00-85.00 range. The P&F chart is bullish and points to a $112 target.

Suggested Options:
We would suggest the May calls but watch for a dip toward the $78 region.

BUY CALL MAY 75.00 DE-EO open interest=157 current ask $5.70
BUY CALL MAY 80.00 DE-EP open interest=875 current ask $2.50

Picked on March 22 at $ 77.29
Change since picked: + 1.76
Earnings Date 05/16/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Grainger W.W.Inc. - GWW - close: 75.35 change: -0.41 stop: 73.95

We are urging caution here. We were triggered on a morning spike higher this past Thursday but GWW failed to hold the breakout over resistance at the $76.00 level. The short-term technical oscillators are starting to roll over into bearish signals and the MACD doesn't look very healthy on the daily chart. The bottom of GWW's two-week trading range is $74.00. Aggressive traders might want to consider buying a bounce near $74.00. We are suggesting that traders wait for a new move over $76.00 or $76.50. Our target is the $79.90-80.00 range.

Suggested Options:
We are not suggesting new positions with GWW under $76.00. Please note that we do not want to hold over the April earnings report.

Picked on March 30 at $ 76.51
Change since picked: - 1.16
Earnings Date 04/15/06 (unconfirmed)
Average Daily Volume = 449 thousand

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Lehman Brothers - LEH - close: 144.53 change: +0.99 stop: 140.79

LEH is still consolidating sideways. The stock did out perform the broader market on Friday but shares are stuck between support ($141 and the 50-dma) and resistance. The overall pattern remains bullish for LEH and this looks like an attractive area to consider call positions with shares near support. The MACD indicator on the daily chart is nearing a new buy signal. We are keeping our stop under support near $141. More conservative types might want to play their stop loss closer to the 50-dma near $142.50. We do expect some resistance near $150 but our target is the $153-155 range.

Suggested Options:
We are suggesting the May calls.

BUY CALL MAY 140.00 LES-EH open interest=274 current ask $7.80
BUY CALL MAY 145.00 LES-EI open interest=568 current ask $4.60
BUY CALL MAY 150.00 LES-EJ open interest=326 current ask $2.35

Picked on March 22 at $144.61
Change since picked: - 0.08
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million

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Nabors Inds. - NBR - close: 71.58 chg: -2.20 stop: 68.85

NBR has been in a sharp rally mode for over a week. We are surprised the stock has gone this long without some profit taking so Friday's pull back wasn't too much of a surprise. More conservative traders may want to lock in some profits. We continue to target the $74.00-75.00 range. We would watch for support near $70.00. Don't forget that NBR is due to split 2-for-1 on April 18th. Don't forget that we plan to exit ahead of the late April earnings report.

Suggested Options:
We are not suggesting new bullish positions at this time. Look for a bounce in the $70 region.

Picked on March 28 at $ 68.85*gap higher*
Change since picked: + 2.73
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 3.7 million

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Southern Peru Copper - PCU - close: 84.48 chg: -0.02 stop: 79.95

Metal and mining stocks turned in a strong week and the group was hit with profit taking on Friday. Fortunately, the bulls were ready and bought the dip in PCU at $82.60. We see the intraday rebound on Friday as a new entry point to buy calls. The P&F chart points to a $102 target. We are aiming for a rally into the $89.50-90.00 range. We do not want to hold over the late April earnings report.

Suggested Options:
We are suggesting the May calls but plan to exit ahead of the late April earnings report.

BUY CALL MAY 80.00 PCU-EP open interest=365 current ask $7.00
BUY CALL MAY 85.00 PCU-EQ open interest=341 current ask $4.20

Picked on March 30 at $ 84.50*gap higher*
Change since picked: - 0.02
Earnings Date 04/24/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Pantry Inc. - PTRY - close: 62.39 chg: +0.36 stop: 58.85

PTRY is still inching higher. The path of least resistance for PTRY seems to be up. However, the momentum has stalled and volume has dried up significantly. While we would consider new bullish positions here a preferable entry point would be a bounce from the $60 region. Our target is the $67.00-68.00 range. The P&F chart points to a $78 target. We do not want to hold over the late April earnings report.

Suggested Options:
We are suggesting the May calls.

BUY CALL MAY 60.00 PQR-EL open interest= 43 current ask $5.00
BUY CALL MAY 65.00 PQR-EM open interest=149 current ask $2.45

Picked on March 26 at $ 61.85
Change since picked: + 0.57
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 364 thousand

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Rio Tinto - RTP - close: 207.00 chg: -1.48 stop: 198.60

Friday proved to be another volatile day for RTP. The stock gapped lower and dipped toward the $201 level before bulls stepped in to buy the dip. Shares rebounded just high enough to fill the Friday morning gap. We remain bullish but we're not suggesting new call positions at this time. RTP is relatively close to our target in the $210-212 range. More conservative traders may want to plan an early exit right here or anywhere north of $209.

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

Picked on March 26 at $198.60
Change since picked: + 8.40
Earnings Date 02/06/06 (confirmed)
Average Daily Volume = 326 thousand

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Schlumberger - SLB - close: 126.57 chg: -1.66 stop: 119.99

SLB experienced some profit taking on Friday after a bullish week of gains. Traders bought the initial dip toward the $125.00 level. If you were nimble enough a bounce from $125 could have been used as a new bullish entry point. Our target is 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.

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

Picked on March 23 at $123.02
Change since picked: + 3.55
Earnings Date 04/21/06 (unconfirmed)
Average Daily Volume = 6.2 million

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Toyota Motor Corp. - TM - close: 108.90 chg: -1.25 stop: 105.95

TM did not escape the profit taking on Friday. It is unfortunate that the stock did not hold on to Thursday's breakout over the $110 level. If the current pattern of slowly drifting higher continues then we would watch for a dip back toward $107.00-107.50 before shares bounce higher again. 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.

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

Picked on March 12 at $106.68
Change since picked: + 2.22
Earnings Date 02/07/06 (confirmed)
Average Daily Volume = 438 thousand

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Tenaris - TS - close: 180.67 chg: -1.83 stop: 177.79

We have nothing new to report on for TS. This oil services provider of steel pipe and other supplies has been stuck in a sideways consolidation pattern for more than three weeks. We are trying to catch a breakout over resistance in the $185-186 region. Currently we're 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. Keep your eyes and ears open for news this coming Thursday when TS will hold an investor conference.

Suggested Options:
We are not suggesting new positions at this time. Wait for the trigger at $186.75. We would choose from the May strikes.

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: 59.78 change: -0.54 stop: 56.45

VLO, like most of the oil sector, experienced some profit taking on Friday. Bulls bought the initial dip at the simple 10-dma. While the current trend is bullish the momentum seems to be slowing. Short-term oscillators are starting to roll over. We are not suggesting new bullish positions at this time. Our target is the $62.50-63.00 range.

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

Picked on March 15 at $ 57.55
Change since picked: + 2.23
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 10.7 million
 

Put Updates

Gannett Co Inc. - GCI - close: 59.92 chg: -0.02 stop: 60.65

This doesn't look good. GCI has been trying to inch higher the last couple of sessions and volume has come in above average. So far resistance near $60.00 and its 21-dma are holding but it doesn't look good for the shorts. We are not suggesting new bearish positions at this time. We will keep our stop loss at $60.65. We do plan to exit ahead of the April 12th earnings.

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

Picked on March 19 at $ 59.04
Change since picked: + 0.88
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: 46.73 chg: -1.57 stop: n/a

We have three weeks left before April options expire. If this is going to be a profitable strangle play ECA needs to trade over $53.50 or under $36.50 soon. Right now odds look better for the calls but the MACD on the daily chart is nearing a new sell signal. 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.

Suggested Options:
We are not suggesting new strangle plays.

Picked on January 10 at $ 45.56
Change since picked: + 1.17
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 69.40 change: -0.11 stop: n/a

The homebuilders continue to feel pressure from rising interest rates. Short-term technicals on RYL are looking more bearish. We have three weeks left before April options expire. Unfortunately, if this is going to be a profitable strangle play RYL needs to trade under $63. Conservative traders may want to plan an early exit now or on any dip toward the $65 region to salvage 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).

Suggested Options:
We are not suggesting new strangle plays.

Picked on January 22 at $ 75.19
Change since picked: - 5.79
Earnings Date 01/24/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

None
 

Dropped Puts

Biosite Inc. - BSTE - close: 51.93 chg: +0.33 stop: 52.05

Ah, yes... Murphy's law wouldn't have it any other way. Most of the market turned lower on Friday but not BSTE. The stock broke out over short-term resistance at the $52.00 level. Of course we shouldn't be surprised. We've been urging caution for the couple of days given the reversal. Our stop loss was at $52.05.

Picked on March 28 at $ 49.75
Change since picked: + 2.18
Earnings Date 03/25/06 (unconfirmed)
Average Daily Volume = 261 thousand
 

Dropped Strangles

None
 

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