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Call Updates

Arch Cap. Grp. - ACGL - cls: 58.58 chg: -0.07 stop: 55.95

Hmmm... ACGL's failure to participate in the wide-spread market rally today is a concern. The stock was trading lower midday but managed to rebound in the last 30 minutes of trading. We do like the intraday bounce from the $58 region but remain cautious. 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: + 0.43
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 195 thousand

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Amerada Hess - AHC - close: 145.75 chg: +1.75 stop: 139.95

Crude oil has broken out over resistance near $70.00 to hit new all-time highs around $72 a barrel. This lifted the oil stocks and AHC added 1.2% on strong volume. If you can handle the short-term time frame this looks like another entry point. 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: - 0.76
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.5 million

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Burlington NrthSanta Fe - BNI - cls: 86.31 chg: +2.82 stop: 79.95

Transportation stocks ignored new highs in crude oil and participated in the market's biggest one-day gain in a year. Shares of BNI rallied 3.3% and broke out over short-term resistance near $84.50. 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: + 3.80
Earnings Date 04/25/06 (unconfirmed)
Average Daily Volume = 2.1 million

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CNOOC Ltd - CEO - close: 86.49 change: +2.19 stop: 79.45

CEO continues to rally and the stock added 2.59% on top of yesterday's gains. Our one concern would be volume, which came in below average today. 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: + 4.23
Earnings Date 04/29/06 (unconfirmed)
Average Daily Volume = 193 thousand

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Cummins - CMI - close; 109.74 chg: +2.65 stop: 104.99

CMI has hit our conservative target in the $109.85-110.00 range with today's 2.47% gain. The high today was $110.15 and the volume came in above average, which is bullish. We expect the breakout past resistance at the $110 level to continue. Our target is the $112.00-112.50 range. We don't want to hold over the April 26th 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: + 2.99
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 804 thousand

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Lehman Brothers - LEH - close: 154.95 change: +3.39 stop: 144.45

The market-wide rally and some positive earnings news from rival Merrill Lynch (MER) helped fuel a 2.2% gain in LEH. Shares of LEH broke out to a new all-time high and surpassed our conservative target at the $153.00 level. More conservative traders may want to exit now or significantly tighten their stops. 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. 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: +10.34
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million

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Marvell Tech. - MRVL - close: 59.11 change: +2.33 stop: 54.99

It is amazing the difference one day can make. Yesterday the semiconductor stocks were leading the tech sector lower. Today the semis lead the tech sector higher. The SOX added 3.4%. Shares of MRVL added 4.1%. Aggressive traders might want to consider new bullish positions here in MRVL. We are still suggesting that readers wait for a breakout over $60.00 and its 50-dma and 100-dma before starting new call positions.

Picked on April 06 at $ 60.18
Change since picked: - 1.07
Earnings Date 05/25/06 (unconfirmed)
Average Daily Volume = 5.9 million
 

Put Updates

Express Scripts - ESRX - close: 85.00 chg: +0.02 stop: 86.51*new*

We are definitely not suggesting new bearish entry points in ESRX at the moment given the market's show of strength. However, the bears can take some comfort in ESRX's relative weakness today and its third failed rally at the $86 level in the last three days. We want to reduce our risk significantly here so we're lowering the stop loss to $86.51. 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: - 0.39
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.6 million

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Overseas Shipping - OSG - cls: 49.43 chg: +1.86 stop: 50.01

Uh-oh! This could be bad news for the shorts. The stock spiked higher at the open, presumably on the new highs in crude oil, and the market-wide rally just fed the rebound in OSG all day long. Shares stalled under resistance near $50.00 and its 50-dma. We would watch for a decline back under $48.50 before considering new bearish positions.

Picked on April 11 at $ 48.10
Change since picked: + 1.33
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 469 thousand

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Reynolds American - RAI - cls: 105.98 chg: +1.62 stop: 106.75

Be careful here. The widespread rally today produced another bounce in RAI and this time shares managed to close over $105.00 and resistance at its simple 50-dma. Volume came in above average on the move. The close over $105 and its 50-dma could be signs of a bullish reversal but so far the stock remains in a four-week downtrend. We're not going to abandon the play just yet.

Picked on April 09 at $104.97
Change since picked: + 1.01
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 637 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: 50.46 chg: +1.95 stop: n/a

The bullish breakout in crude oil over resistance at $70.00 a barrel helped fuel a bullish breakout in ECA, which cleared resistance in the $49.00-50.00 region. April options expire this week and we need to exit before Friday's close. 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: + 4.90
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 70.50 change: +3.68 stop: n/a

Believe it or not homebuilders continued to show weakness today until about 2:00 P.M. EST when the group shot higher. RYL rallied more than 5.5% on huge volume and pretty much killed any chance of this play being successful (again). There is only a very slim chance that the company's earnings report on Thursday morning would be bad enough or good enough to jolt the stock far enough so that our strangle would even hit breakeven. 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: - 4.69
Earnings Date 04/20/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Anadarko Petrol. - APC - cls: 110.60 chg: +2.38 stop: 101.95

Target achieved. The rising price of crude oil helped fuel another day of big gains in APC. The stock broke out over resistance at the $110 level to hit new highs. Our target was the $109.50-110.00 range.

Picked on March 28 at $102.10
Change since picked: + 8.50
Earnings Date 04/28/06 (unconfirmed)
Average Daily Volume = 2.5 million

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ConocoPhillips - COP - close: 70.64 chg: +2.31 stop: 62.45

Target achieved. COP is another beneficiary of the rising price of oil. The stock pushed past round-number resistance at $70.00 with a 3.38% gain in spite of one analyst firm reiterating their under perform-rating. Our target was the $69.00-70.00 range.

Picked on March 29 at $ 64.80
Change since picked: + 5.84
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 10.5 million
 

Dropped Puts

Apollo Group - APOL - close: 54.26 chg: +1.62 stop: 53.31

After weeks of consolidating sideways shares of APOL finally broke through resistance at its 50-dma and the $54.00 level. The stock has additional resistance at $55.00 but we're going to drop the stock as a bearish candidate. APOL never hit our trigger to buy puts at $49.85.

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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Genzyme Corp. - GENZ - close: 65.78 chg: +1.43 stop: 65.71

We did not want to hold over tomorrow's earnings report and our plan was to exit today near the closing bell. However, the market rally pushed GENZ back above the $65.00 level and we were stopped out at $65.71. Wall Street expects earnings of 63 cents a share tomorrow.

Picked on April 10 at $ 63.97 *gap lower*
Change since picked: + 1.81
Earnings Date 04/19/06 (confirmed)
Average Daily Volume = 2.1 million

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Texas Ind. - TXI - close: 61.33 chg: +2.95 stop: 61.11

The biggest one-day rally in the last year for the markets was too much for TXI and the stock soared 5% today. We have been stopped out at $61.11.

Picked on April 11 at $ 58.34
Change since picked: + 2.99
Earnings Date 06/29/06 (unconfirmed)
Average Daily Volume = 423 thousand
 

Dropped Strangles

None
 

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