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Call Updates

Arch Cap. Grp. - ACGL - cls: 59.27 chg: +0.69 stop: 55.95

Good news. ACGL's relative weakness yesterday has been replaced with some relative strength today. The stock broke out over minor resistance at the $59.00 level to close at a new high. Our target is currently the $62.50-63.00 range but we plan to exit ahead of the April 27th earnings report. ACGL is announcing after the closing bell.

Picked on April 03 at $ 58.15
Change since picked: + 1.12
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 195 thousand

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Amerada Hess - AHC - close: 148.62 chg: +2.87 stop: 141.65*new*

The OIX and OSX oil indices have pushed to new all-time highs just as crude oil closes over $72.00 a barrel for the first time ever. This helped AHC to a 1.9% gain on above average volume. The stock is now challenging resistance near the $150 level. Our target is the $154.00-155.00 range. We do not want to hold over the April 26th earnings report. Please note that we're raising our stop loss to $141.65.

Picked on April 05 at $146.51
Change since picked: + 2.11
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.5 million

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Cummins - CMI - close; 111.77 chg: +2.03 stop: 104.99

So far so good. CMI continues to show relative strength and the stock broke out over resistance at the $110 level today. The stock has passed our conservative target in the $110 region and is headed toward our main target in the $112.00-112.50 range. More aggressive traders may want to aim higher (say $115.00) but keep in mind we do not want to hold over the earnings report next Friday, April 28th.

Picked on April 16 at $106.75
Change since picked: + 5.02
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 804 thousand

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Lehman Brothers - LEH - close: 155.32 change: +0.37 stop: 144.45

Broker stocks continue to rally and the XBD index hit another new all-time high today. Fueling the move today has been more positive news and positive earnings reports from stocks in the industry. Meanwhile shares of LEH took a bit of a break today to digest yesterday's gains. The stock has 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: +10.71
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million

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Marvell Tech. - MRVL - close: 60.89 chg: +1.78 stop: 55.99 *new*

Breakout alert! The SOX semiconductor index turned in another strong session (+1.74%) and broke out over technical resistance at its 50-dma. This helped pave the way for MRVL's breakout session where the stock pushed past the $60.00 level and its 50-dma and 100-dma. Volume came in above average and we see this as a new bullish entry point to buy calls. Our target is the $65.50-66.00 range. We are raising the stop loss to $55.99.

Picked on April 06 at $ 60.18
Change since picked: + .71
Earnings Date 05/25/06 (unconfirmed)
Average Daily Volume = 5.9 million
 

Put Updates

Express Scripts - ESRX - close: 84.40 chg: -0.60 stop: 86.51

ESRX continues to show relative weakness and shares produced another failed breakout attempt at the $86.00 level this morning. Volume was definitely above average on today's pull back. Our target is the $80.25-80.00 range. We want to exit ahead of the April 26th earnings report.

Picked on April 09 at $ 85.39
Change since picked: - 0.99
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.6 million

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Overseas Shipping - OSG - cls: 48.99 chg: -0.44 stop: 50.01

OSG failed to produce any sort of follow through on yesterday's rally. That's good news but we are still suggesting that readers wait for a decline under $48.50 before considering new put positions. Our target is the $43.00-42.50 range. We do not want to hold over the early May earnings report.

Picked on April 11 at $ 48.10
Change since picked: + 0.89
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 469 thousand

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Reynolds American - RAI - cls: 105.65 chg: -0.33 stop: 106.75

We do not see any change from yesterday's update. RAI is still trading at a pivotal level where the stock will either roll over and confirm the relatively new bearish trend or the stock will push higher and probably retest resistance at the $110 level. We are not suggesting new plays at the moment. Bear in mind that tomorrow could be a crucial day. Larger rival Altria (MO) is due to report earnings tomorrow morning and MO's results and investor reaction to it will have an affect on shares of RAI. Wall Street is looking for $1.27 a share from MO.

Picked on April 09 at $104.97
Change since picked: + 0.68
Earnings Date 04/26/06 (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: 51.12 chg: +0.66 stop: n/a

Volume in ECA was decent for the second day in a row, which should help confirm the recent bullish breakout. We have two more days before April options expire. Traders can choose to exit now and recoup some of their trading capital or hope that ECA marks new gains into the weekend and then exit near 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: + 5.56
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 68.58 change: -1.92 stop: n/a

Homebuilders were weak again today on interest rate fears but today's move is too late to help RYL. We have one more (slim) chance that tomorrow's earnings report for RYL will produce enough volatility that we can potential recoup more of our trading capital. 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: - 6.61
Earnings Date 04/20/06 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Calls

Burlington NrthSanta Fe - BNI - cls: 85.78 chg: -0.53 stop: 79.95

Target achieved. BNI displayed some relative strength this morning. The stock gapped open higher at $86.99 and hit an intraday high of $87.99 before paring its gains and finally closing lower. Our target was the $87.50-90.00 range. More aggressive traders may want to aim for the $90 mark given the new MACD buy signal but we're closing the play. BNI is expected to report earnings next Tuesday. It would not surprise us to hear the company announce a stock split but then again its last stock split (a 3-for-1) was back in September 1998 around $130.00 a share.

Picked on March 27 at $ 82.51
Change since picked: + 3.27
Earnings Date 04/25/06 (confirmed)
Average Daily Volume = 2.1 million

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CNOOC Ltd - CEO - close: 87.40 change: +0.91 stop: 79.45

Target achieved. Another strong day for crude oil futures pushed the oil indices to new all-time highs. Shares of CEO hit an intraday high of $88.00. Our target was the $87.50-88.00 range. The $88 level looks like potential resistance so we'd keep an eye on CEO for a pull back and a potential entry point for new bullish plays.

Picked on April 17 at $ 82.26
Change since picked: + 5.14
Earnings Date 04/29/06 (unconfirmed)
Average Daily Volume = 193 thousand
 

Dropped Puts

None
 

Dropped Strangles

None
 

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