Lehman Brothers - LEH - close: 156.01 chg: +2.82 stop: 147.75
The market rally on Thursday was partially led by the financials and LEH charged higher posting a 1.8% gain. Volume on the day was well above the daily average suggesting conviction behind the move. We've been suggesting that readers consider selling half their position at $153 and the other half at $159. That remains our plan but more conservative traders may want to give strong thought to exiting right here. We will definitely close the play if LEH trades at $159 tomorrow. LEH is due to split its stock 2-for-1 on Monday, May 1st. A stock split does not fundamentally change anything but LEH could see a decrease in volatility and some stocks, if they have a strong pre-split run up, can see a post-split depression. That's one reason why we would consider exiting tomorrow even if LEH doesn't hit $159. At this time we will hold over the stock split. That means on Monday your call positions should double the quantity of contracts while halving their value. The option symbols will change to reflect the post-split strike price. Our post-split price target will be $79.50.
Picked on March 22 at $144.61
Acc. Home Lenders - LEND - cls: 56.20 chg: +1.60 stop: 53.55*new*
LEND is another financial stock that performed well today. Shares added 2.9% on above average volume. Normally we would see today's rebound from the $54.00 level as a new bullish entry point. Unfortunately, LEND is due to report earnings on Tuesday, May 2nd. It is our plan to exit on Monday afternoon near the closing bell to avoid holding over the earnings announcement. Our target is the $59.75-60.00 range. We are going to raise our stop loss to $53.55, just under today's low.
Picked on April 19 at $ 56.57
Progressive - PGR - close: 107.22 chg: +0.82 stop: 103.95
PGR tried to rally today but failed to close over the $108 level or its simple 200-dma. We would remain cautious with the stock under $108. Keep 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
Strayer Educ. - STRA - close: 104.14 chg: -1.74 stop: 101.99
Uh-oh. This is bad news. STRA failed to produce any sort of follow through on yesterday's bullish breakout over resistance. Furthermore today's show of relative weakness came on a day that the major averages closed higher. Aggressive traders might want to buy a bounce from the $104.00 level. We would wait for a new move over $105 and we'd be extra careful at that since we have a very short time frame. We plan to exit on Wednesday, May 3rd near the closing bell.
Picked on April 26 at $105.88
Cbot Holdings - BOT - close: 108.72 chg: -3.63 stop: 113.01
Good news. BOT's bounce yesterday proved to be a failed rally under the simple 10-dma. Shares followed through with some relative weakness today. The stock lost 3.2% to close at a new low. Our trigger to buy puts was at $108.95. Now that the play is open our target is the $101.50-100.00 range, near the exponential 200-dma (101.47). The P&F chart is bearish and points to a $92 target. Our time frame is about three to four weeks.
Picked on April 27 at $108.95
Overseas Shipping - OSG - cls: 48.55 chg: -0.10 stop: 50.01
There is no change from our previous updates on OSG. The stock merely churned sideways in a $1.00 range. We are not suggesting new positions. Our plan is to exit on Monday, May 1st at the closing bell to avoid holding over the earning report Tuesday morning.
Picked on April 11 at $ 48.10
Whole Foods - WFMI - close: 61.25 chg: -0.62 stop: 65.05
WFMI continues to sink with another 1% loss today. The stock is getting closer to our target in the $60.25-60.00 range. We're not suggesting new plays at this time. We plan to exit near the closing bell on May 3rd to avoid holding over the earnings report later that day.
Picked on April 23 at $ 63.91
(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.