Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Call Updates

Lehman Brothers - LEH - close: 153.19 chg: +2.24 stop: 147.75

A bullish session for the DJIA closing at new multi-year highs helped inspire some dip-buying in LEH. LEH added 1.48% as traders bought the dip near $150. We're not suggesting new bullish positions at this time but if you were looking for one this is probably a good spot to consider buying calls again in LEH. Our biggest concern would be the bearish signals we see in some of the technical indicators. Our suggested plan was to sell half the bullish position near $153 and the rest near $159. Don't forget that LEH has a stock split coming on May 1st. We are considering an early exit to avoid any post-split depression in the stock.

Picked on March 22 at $144.61
Change since picked: + 8.58
Earnings Date 06/14/06 (unconfirmed)
Average Daily Volume = 2.0 million


Acc. Home Lenders - LEND - cls: 54.60 chg: -0.16 stop: 52.95

Short-term technicals are turning bearish in LEND with the stock's three-day pull back (or five day consolidation) following its recent breakout. The $54.00 level was previous resistance so we're expecting it to act as new support. A bounce from $54.00 can be used as a new bullish entry point but we're running out of time. LEND is expected to report earnings on May 2nd and we don't want to hold over the report. Our target is the $59.75-60.00 range. More conservative traders may want to think about tightening their stop losses.

Picked on April 19 at $ 56.57
Change since picked: - 1.98
Earnings Date 05/02/06 (confirmed)
Average Daily Volume = 693 thousand


Progressive - PGR - close: 106.40 chg: +1.48 stop: 103.95

PGR turned in a decent rebound today with a 1.4% gain. We are fortune that the stock managed to bounce. As of Tuesday's close the situation did not look very promising. Currently the stock is still trading under its simple 200-dma and resistance near $108. If you are looking for a new entry point it might pay off to just wait for a breakout over $108 before considering positions. However, bear in mind that we do not want to hold over the May 8th earnings report. PGR's 4-for-1 stock split is due on May 19th.

Picked on April 23 at $106.46
Change since picked: - 0.06
Earnings Date 05/08/06 (unconfirmed)
Average Daily Volume = 846 thousand

Put Updates

Cbot Holdings - BOT - close: 112.35 chg: +0.85 stop: 113.01

We do not see any change from our Tuesday night play description. The stock did produce a bounce today but remains in a bearish H&S pattern. The P&F chart, which eliminates some of the noise seen on the daily chart, is bearish with a sell-signal pointing to a $92 target. We are going to suggest a trigger at $108.95, which is under Monday's low. If triggered then we'll target a decline into the $101.50-100.00 range. Our time frame is about three to four weeks.

Picked on April 25 at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/19/06 (confirmed)
Average Daily Volume = 322 thousand


Overseas Shipping - OSG - cls: 48.65 chg: +0.00 stop: 50.01

Hmmm... OSG's consolidation seems to be narrowing or coiling for a breakout. Unfortunately, we can't tell which direction the breakout might go. It's bearish that OSG failed to participate in the rally today but we would not be surprised by a move higher. The P&F chart remains bearish. We are not suggesting new put positions at this time. More conservative traders might want to think about adjusting their stops toward technical resistance at the 50-dma near 49.67. We do not want to hold over the early May earnings report.

Picked on April 11 at $ 48.10
Change since picked: + 0.55
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 469 thousand


Whole Foods - WFMI - close: 61.87 chg: -0.19 stop: 65.05 *new*

WFMI tried to bounce this morning but failed. Today's relative weakness is good news for the bears. We are going to lower our stop loss to $65.05. Our target is the $60.25-60.00 range but more aggressive traders may want to aim lower. The biggest challenge is probably the time frame. We do not want to hold over the May 3rd earnings report.

Picked on April 23 at $ 63.91
Change since picked: - 2.04
Earnings Date 05/03/06 (confirmed)
Average Daily Volume = 1.8 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.)


There are currently no strangle plays.

Dropped Calls

Arch Cap. Grp. - ACGL - cls: 60.10 chg: +0.85 stop: 58.49

A generally widespread market rally on Wednesday helped ACGL breakout past the $59.50 level and close at a new high. It was or plan to close the play today near the closing bell to avoid holding over the company's earnings report expected tomorrow. Volume was pretty strong today on the mini breakout. Aggressive traders might want to hold ACGL one more session since the company doesn't report until after the market close tomorrow.

Picked on April 03 at $ 58.15
Change since picked: + 1.95
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 195 thousand


Alliance Res. Ptrnrs - ARLP - cls: 41.95 chg: +0.66 stop: 37.95

Target achieved. Coal-producer ARLP posted another positive session today and traded to $42.12 midday. Our target was the $42.00-42.50 range. We remain bullish on the coal producers. With crude oil so high it puts additional focus on alternative energy plays. However, right now ARLP looks short-term overbought so we'd look for a dip before considering new bullish positions.

Picked on April 23 at $ 38.98
Change since picked: + 2.97
Earnings Date 04/24/06 (confirmed)
Average Daily Volume = 101 thousand

Dropped Puts


Dropped Strangles


Play Update Archives