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Call Updates

Arch Cap. Grp. - ACGL - cls: 59.26 chg: +0.06 stop: 56.95 *new*

Time is growing short for our bullish play in ACGL. The stock did manage to hold on to its gains for the week but volume has been slipping and shares are nearing what could be resistance at the $60.00 level. We are not suggesting new bullish positions. ACGL is due to report earnings on April 27th and we do not want to hold over the announcement. We will plan to exit on Wednesday near the closing bell. Our target will remain at $62.50 but we're raising the stop loss to $56.95. More conservative traders might want to tighten their stops toward $57.50.

Suggested Options:
We are not suggesting new plays in ACGL.

Picked on April 03 at $ 58.15
Change since picked: + 1.11
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 195 thousand

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Cummins - CMI - close; 109.67 chg: -0.32 stop: 105.95*new*

CMI managed to set new highs this past week but unfortunately the stock failed to hold them. Short-term oscillators are starting to look more bearish given the two-day pull back. We are not suggesting new bullish positions at this time. CMI is expected to report earnings on Friday, April 28th and we plan to exit on Thursday near the closing bell to avoid holding over the announcement. We are going to try and reduce our risk by raising the stop loss to $105.95, which is just under technical support at the 50-dma near $106. Our target is the $112.00-112.50 range.

Suggested Options:
We are not suggesting new bullish positions in CMI.

Picked on April 16 at $106.75
Change since picked: + 2.92
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 804 thousand

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Lehman Brothers - LEH - close: 155.09 chg: -0.17 stop: 147.75*new*

Traders have another choice to make with LEH. The major averages look a little tired and could easily pull back next week. If that does occur then LEH could just as easily pull back and retest the $150 level. Your choice is between locking in profits here near $155 or enduring the potential ups and downs over the next couple of weeks for another $4.00 gain. We are not suggesting new bullish positions at this time and we have one week before LEH splits 2-for-1. We'd really like to exit ahead of the stock split, which is an event that could reduce LEH's volatility. We have been suggesting that readers consider selling half their positions at $153.00 and then sell the second half of their position at $159.00. Please note that we're adjusting the stop loss to $147.75. More conservative traders may want to place their stops near $150 or just exit early right here.

Suggested Options:
We are not suggesting new bullish positions in LEH.

Picked on March 22 at $144.61
Change since picked: +10.48
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million

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Acc. Home Lenders - LEND - cls: 56.31 chg: +0.91 stop: 52.95*new*

Thursday's afternoon rebound continued into Friday's session and LEND closed with a 1.6% gain. Unfortunately it looks like shares have hit new short-term resistance at $56.50. Overall the pattern remains very bullish for LEND with its inverse head-and-shoulders pattern and the breakout over resistance in the $54.00 and $55.00 region. The P&F chart is bullish with a quadruple top breakout buy signal and a $72.00 target. We are suggesting call positions with LEND above $54.00. Our target is the $59.75-60.00 range. Please note that we are raising our stop loss to $52.95. More conservative traders might want to try $53.49. We do not want to hold over the May 2nd earnings report and that gives us less than six trading days.

Suggested Options:
We are suggesting the May calls.

BUY CALL MAY 55.00 QFW-EK open interest=904 current ask $3.80
BUY CALL MAY 60.00 QFW-EL open interest=287 current ask $1.50

Picked on April 19 at $ 56.57
Change since picked: - 0.26
Earnings Date 05/02/06 (confirmed)
Average Daily Volume = 693 thousand

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Marvell Tech. - MRVL - close: 57.59 chg: -3.40 stop: 55.99

Watch out! MRVL has reversed course on us again. Last week the stock managed to rebound from its lows and breakout over resistance at $60.00 and its 50 and 100-dma's but it didn't last. Rival Broadcom (BRCM) reported earnings on Thursday night and the results were good. The bad news is that traders used it as an excuse to lock in profits and the selling hit MRVL too. Volume came in above average for Friday's decline in MRVL. That's a bearish development and we are not suggesting new bullish positions. Actually more conservative traders may just want to exit early right here or tighten stops toward Friday's low. We're going to leave our stop at $55.99 for now.

Suggested Options:
We are not suggesting new bullish positions in MRVL.

Picked on April 06 at $ 60.18
Change since picked: - 2.59
Earnings Date 05/25/06 (unconfirmed)
Average Daily Volume = 5.9 million
 

Put Updates

Overseas Shipping - OSG - cls: 48.71 chg: -0.02 stop: 50.01

We really don't see much change from our previous updates on OSG. This oil-tanker stock tried to breakout last Tuesday but the rally failed at its descending 40 & 50-dma's. The stock has been consolidating under this resistance for the last few sessions. This sort of failed rally at resistance looks like a new entry point for bearish positions but we'd wait for a decline under the $48.50 or $48.00 level before initiating positions. The P&F chart is bearish with a bearish catapult breakdown sell signal that points to a $43 target. We are targeting the $43.00-42.50 range. We do not want to hold over the early May earnings report so we only have about six trading days.

Suggested Options:
We are suggesting the May puts although we plan to exit ahead of the May earnings report.

BUY PUT MAY 50.00 OSG-QJ open interest=153 current ask $2.45
BUY PUT MAY 45.00 OSG-QI open interest=697 current ask $0.50

Picked on April 11 at $ 48.10
Change since picked: + 0.61
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 469 thousand
 

Strangle Updates

None
 

Dropped Calls

Amerada Hess - AHC - close: 154.45 chg: +6.32 stop: 141.65

Target achieved. Another big rally in crude oil pushed futures to record highs at $75.00 a barrel. This move fueled a widespread rally in the oil stocks and AHC finally broke out over resistance at the $150.00 level. Our target was the $154.00-155.00 range. More aggressive traders might want to think about keeping a small position open just to see how far AHC could run but bear in mind that crude now looks short-term overbought and due for a dip while AHC is nearing resistance in the $155-156 region.

Picked on April 05 at $146.51
Change since picked: + 7.94
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.5 million

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Cleveland Cliffs - CLF - close: 90.44 chg: +0.49 stop: 92.45

CLF has failed to breakout over resistance at the $95 level and we remain on the sidelines. Our plan was to catch a breakout higher with a trigger at $95.05. Unfortunately, we're running out of time. CLF is due to report earnings on Wednesday, April 26th. We do not want to hold over the report. However, more aggressive traders might want to consider a strangle or a straddle with CLF hugging the $90 level.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 650 thousand
 

Dropped Puts

None
 

Dropped Strangles

Encana Corp. - ECA - close: 51.32 chg: +0.82 stop: n/a

ECA continued to rally on Friday with oil hitting new highs at $75/a barrel but it wasn't enough to save this strangle play. April options have now expired. Our strangle strategy involved the April $50 calls (ECA-DJ) and the April $40 puts (ECA-PH). Our estimated cost was $3.45.

Picked on January 10 at $ 45.56
Change since picked: + 5.76
Earnings Date 02/15/06 (confirmed)
Average Daily Volume = 4.4 million

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Ryland Group - RYL - close: 68.27 change: -1.10 stop: n/a

Our strangle play in homebuilder RYL has finally expired with April option expiration. Our play involved the April $80 calls (RYL-DP) and the April $70 puts (RYL-PN).

Picked on January 22 at $ 75.19
Change since picked: - 6.92
Earnings Date 04/20/06 (confirmed)
Average Daily Volume = 1.1 million
 

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