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Call Updates

Arch Cap. Grp. - ACGL - cls: 58.65 chg: +0.02 stop: 55.95

Monday's market weakness appeared to put the kibosh on ACGL's show of strength from Friday. Yet the stock managed to close in the green if only by pennies. We remain cautious and hesitate to suggest new bullish positions at this time. We have less than two weeks before ACGL is expected to report earnings. Our target is currently the $62.50-63.00 range.

Picked on April 03 at $ 58.15
Change since picked: + 0.50
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 195 thousand

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Amerada Hess - AHC - close: 144.00 chg: +1.41 stop: 139.95

The ongoing saga between Iran and the West continued to take center stage this past weekend and it helped push crude oil futures to a new high. AHC responded on Monday with a 0.98% bounce that reversed Friday's losses. This looks like a new bullish entry point but traders might want to wait for another move over $144.50 or $145.00 before initiating new positions. Our target is the $154.00-155.00 range. We do not want to hold over the April 26th earnings report.

Picked on April 05 at $146.51
Change since picked: - 2.51
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.5 million

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Anadarko Petrol. - APC - cls: 108.22 chg: +3.08 stop: 101.95*new*

APC, another oil stock, turned in a much stronger rebound today and added 2.9% by the closing bell. More conservative traders may want to seriously consider exiting right here for a profit. Our target is the $109.50-110.00 range. We do not want to hold over the April 27th earnings report. Please note we are raising the stop loss to $101.95.

Picked on March 28 at $102.10
Change since picked: + 6.12
Earnings Date 04/28/06 (unconfirmed)
Average Daily Volume = 2.5 million

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Burlington NrthSanta Fe - BNI - cls: 83.49 chg: +0.10 stop: 79.95

Transport stocks headed south on Monday, lead by declines in the airline stocks. The airline group is getting hit hard by the sharp rise in crude oil prices. BNI, a railroad, managed to close in the green in spite of the transport sector weakness. Our time frame is running short. We want to exit ahead of the earnings report around April 25th. Our target is the $87.50-90.00 range. The P&F chart remains bullish and points to a $114 target.

Picked on March 27 at $ 82.51
Change since picked: + 0.98
Earnings Date 04/25/06 (unconfirmed)
Average Daily Volume = 2.1 million

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CNOOC Ltd - CEO - close: 84.30 change: +2.40 stop: 79.45

We did not have to wait long for CEO to hit our trigger and open the play. The rise in crude oil futures due to geo-political concerns helped fuel a rally in the oil stocks. Plus, there were some positive comments about China's economic growth over the last couple of days. Shares of CEO rallied 2.9% on Monday and hit our trigger to buy calls at $82.26. Our target is the $87.50-88.00 range. We do not want to hold over the April 29th earnings report.

Picked on April 17 at $ 82.26
Change since picked: + 2.04
Earnings Date 04/29/06 (unconfirmed)
Average Daily Volume = 193 thousand

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Cummins - CMI - close; 107.09 chg: +0.34 stop: 104.99

CMI did try to rally from support today but lost its momentum with the market's reversal. The overall pattern remains unchanged and we see no change from our weekend update. We are going to suggest calls with CMI above $106.00 and we'll try and keep our risk to a minimum with a stop loss under the simple 50-dma at $104.99. Conservative traders can plan an exit in the $109.85-110.00 range (our conservative target). We're going to bet on a breakout over resistance at $110 so our more aggressive target will be the $112.00-112.50 range. We don't want to hold over the late April earnings. If you have a longer time frame you may want to aim even higher.

Picked on April 16 at $106.75
Change since picked: + 0.00
Earnings Date 04/28/06 (unconfirmed)
Average Daily Volume = 804 thousand

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ConocoPhillips - COP - close: 68.33 chg: +1.19 stop: 62.45

The Iran-fueled rise in crude oil also lifted shares of COP, which closed with a 1.77% gain. The stock is getting pretty close to our target in the $69.00-70.00 range.

Picked on March 29 at $ 64.80
Change since picked: + 3.53
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 10.5 million

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Lehman Brothers - LEH - close: 151.56 change: +1.33 stop: 144.45

LEH continues to look strong and traders bought the dip this afternoon near the $150 level. If this afternoon is any indication then LEH could hit our conservative target at $153.00 tomorrow. We are suggesting that readers consider selling half their positions at $153.00 and then sell the second half of their position at $159.00. More conservative traders may want to exit completely near $152.50-153.00. Don't forget that LEH is due to split 2-for-1 on May 1st.

Picked on March 22 at $144.61
Change since picked: + 6.95
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million

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Marvell Tech. - MRVL - close: 56.78 change: -0.76 stop: 54.99

This doesn't look good for the bulls. The SOX lost 1.48% today and lead technology stocks lower. MRVL looks poised to hit support near $56.00 again soon and it might break it this time. More conservative traders may want to consider an early exit or a tighter stop loss. With today's failed rally we're definitely thinking that it might be best to wait for another breakout over $60 before considering new bullish positions (or maybe another bounce from $54 and/or its 200-dma).

Picked on April 06 at $ 60.18
Change since picked: - 3.40
Earnings Date 05/25/06 (unconfirmed)
Average Daily Volume = 5.9 million
 

Put Updates

Apollo Group - APOL - close: 52.64 chg: -0.16 stop: 53.31

We do not see any change from our previous updates and we remain on the sidelines. We are continuing to suggest that traders use a trigger under support at the $50.00 level. Our trigger to buy puts is at $49.85. If triggered we will have two targets. Our first target is the $45.50-45.00 range. Conservative traders can exit near $45. We're suggesting that traders only sell half their positions near $45 and plan to sell the remainder in the $41.00-40.00 range. If APOL closes over the simple 50-dma we'll drop it as a bearish candidate. Aggressive traders might want to evaluate bullish positions.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/22/06 (unconfirmed)
Average Daily Volume = 2.4 million

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Express Scripts - ESRX - close: 84.98 chg: -0.53 stop: 90.01

ESRX did pull back today but traders bought the initial dip near $84.00 this afternoon. We are still suggesting that readers wait for another decline under $84.00 before considering new put positions. Don't forget that we want to exit ahead of the April 26th earnings report. Our short-term target is the $80.25-80.00 range.

Picked on April 09 at $ 85.39
Change since picked: - 0.41
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.6 million

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Genzyme Corp. - GENZ - close: 64.35 chg: -0.47 stop: 65.71*new*

GENZ continued to slip lower in spite of some positive analyst comments today. That's good news for the bears but we're running out of time. Our plan is to exit tomorrow (Tuesday) near the closing bell to avoid holding over GENZ's earnings report on Wednesday. We are adjusting the stop loss to $65.71.

Picked on April 10 at $ 63.97 *gap lower*
Change since picked: + 0.38
Earnings Date 04/19/06 (confirmed)
Average Daily Volume = 2.1 million

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Overseas Shipping - OSG - cls: 47.57 chg: +0.55 stop: 50.01

OSG produced a bit of an oversold bounce on Monday, probably driven by the rise in crude oil, but overall the oil-tanker/shipping industry has seen its share price disconnected from the price of crude. Look for a failed rally under $50.00 (and maybe $49.00 or $48.00) as a new bearish entry point. We do not want to hold over the early May earnings report. Our target is the $43.00-42.50 range, which coincides with the bearish P&F chart target.

Picked on April 11 at $ 48.10
Change since picked: - .53
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 469 thousand

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Reynolds American - RAI - cls: 104.36 chg: -0.04 stop: 106.75

RAI is still consolidating under and struggling with overhead resistance near $105-106 and its simple 50-dma. We remain short-term bearish but the lack of follow through lower makes us wary and hesitant to suggest new positions. Our target is the 100-dma near the $100.00 mark. We'll use an exit range of $100.50-100.00. We do not want to hold over the late April earnings report. In the news RAI announced that it had paid more than $2 billion to satisfy its annual payment for 2006 as required by the Master Settlement Agreement but the company put $647 million into escrow as it continues to dispute some payments required by certain states.

Picked on April 09 at $104.97
Change since picked: - 0.61
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 637 thousand

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Texas Ind. - TXI - close: 58.38 chg: +0.02 stop: 61.11

Volume in TXI continues to be abnormally low and there is no follow through lower on the recent failed rally/bounce, which is bad news for the bears. The stock did trade under $57.90, a suggested entry point for new puts, but TXI managed to rebound by the closing bell. Our target will be the simple 200-dma in the $54.00-53.50 range. A move under $57.00 would produce a new P&F chart sell signal.

Picked on April 11 at $ 58.34
Change since picked: + 0.04
Earnings Date 06/29/06 (unconfirmed)
Average Daily Volume = 423 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.)

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Encana Corp. - ECA - close: 48.51 chg: +0.76 stop: n/a

ECA is flirting with a breakout over resistance near $49.00. Our strangle play has almost run out of time. April options expire this week. That gives us four trading days for ECA to trade significantly above $50 or under $40. Our strangle strategy involves the April $50 calls (ECA-DJ) and the April $40 puts (ECA-PH). Our estimated cost is $3.45.

Picked on January 10 at $ 45.56
Change since picked: + 2.95
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 66.82 change: -1.00 stop: n/a

Traders have a decision to make. The recent weakness in the homebuilders, spurred by rising interest rates, is good news for the put side of our strangle. Unfortunately, RYL is now down six days in a row and the decline is starting to get oversold and due for a bounce. The decision to make is do you exit here and sell the April 70 puts and recoup some of your trading capital or do you hope the sell-off continues. Currently the April $70 put (RYL-PN) is trading at $3.30bid/$3.40ask. More conservative traders may want to give some serious thought to exiting here. Our play involves the April $80 calls (RYL-DP) and the April $70 puts (RYL-PN). April options expire this week.

Picked on January 22 at $ 75.19
Change since picked: - 8.37
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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