Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Call Updates

Apple Computer - AAPL - close: 69.60 chg: -0.79 stop: 68.45

AAPL gave into the tech weakness on Monday and failed to breakout over the $72.00 level. This was a bit disappointing following some bullish analyst comments suggesting that AAPL is lined up to have a strong second half in 2006. We remain on the sidelines. Our strategy is using a trigger to buy calls at $72.25. If triggered then we'll target a rally into the $77.45-80.00 range.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 36.0 million


Progressive - PGR - close: 107.33 chg: -1.20 stop: 103.95

PGR failed to produce any follow through on last Friday's bullish breakout over the 200-dma. Instead the stock produced a failed rally at its descending 100-dma, which we mentioned as a potential hazard. The broad-market's reversal this afternoon did not help matters. PGR's 4:1 split is due May 19th but we plan to exit ahead of the May 8th earnings report. That only gives us four trading days before we exit therefore we're not suggesting new positions at this time. Our target is the $114.00-115.00 range.

Picked on April 23 at $106.46
Change since picked: + 0.87
Earnings Date 05/08/06 (unconfirmed)
Average Daily Volume = 846 thousand


Rackable Systems - RACK - close: 50.72 chg: -0.67 stop: 47.39

After Friday's big gain we are not surprised by today's pull back in RACK. In fact the dip to $50.00 could be used as a new bullish entry point. However, today the NASDAQ composite broke down through significant support and this could be bad news for any tech-related stock no matter how strong it is individually. We are suggesting that traders in RACK use extra caution and monitor their stops carefully. You might want to tighten your stop loss to further minimize your risk. Our target for RACK is the $57.25-58.00 range.

Picked on April 30 at $ 51.39
Change since picked: - 0.67
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 825 thousand

Put Updates

Amazon.com - AMZN - close: 34.59 chg: -0.62 stop: 36.51

AMZN has broken down to a new nine-month low under support at the $35.00 level. Our trigger to buy puts was at $34.85 so the play is now open. Our target is the $31.00-30.75 range. In the news today AMZN made headlines by switching from Google (GOOG) to Microsoft (MSFT) to provide results for its Alexa search toolbar.

Picked on May 01 at $ 34.85
Change since picked: - 0.26
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 6.3 million


Research In Motion - RIMM - cls: 73.03 chg: -3.60 stop: 79.01*new*

Wow! We thought RIMM looked bearish but we didn't expect Monday's session to produce a 4.6% decline. The move lower today was fueled by news that priviately-held Visto has filed an intellectual property lawsuit against RIMM. This comes just weeks after RIMM settled its legal battle with NTP. The sell-off in RIMM today did stall near $72 and its simple 200-dma. We probably wouldn't suggest new bearish positions right here. Look for a bounce and a failed rally. Our target is the $71.00-70.00 range but more aggressive traders may want to aim lower. We are going to lower our stop loss to $79.01.

Picked on April 30 at $ 76.63
Change since picked: - 3.60
Earnings Date 07/06/06 (unconfirmed)
Average Daily Volume = 5.8 million


Whole Foods - WFMI - close: 61.46 chg: +0.08 stop: 64.55

We have just two days left before WFMI announces earnings. Our plan is to exit on Wednesday near the closing bell. More conservative traders may want to exit right now. The stock's downward momentum is stalling and traders might just be in a holding pattern as they wait for WFMI's earnings report.

Picked on April 23 at $ 63.91
Change since picked: - 2.45
Earnings Date 05/03/06 (confirmed)
Average Daily Volume = 1.8 million


XM Satellite Radio - XMSR - cls: 18.71 chg: -1.56 stop: 20.55

Right on cue shares of XMSR continue to show relative weakness. The stock lost 7.7% today on very strong volume. The breakdown under support at the $20.00 level is pretty bearish. We were suggesting a trigger to buy puts at $19.65. Now that the play is open our target is the $17.55-17.45 range. More aggressive traders may want to aim lower.

Picked on May 01 at $ 19.65
Change since picked: - 0.94
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 7.9 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.)


Fedex - FDX - close: 113.60 chg: -1.53 stop: n/a

Our new strangle play has begun. FDX churned sideways between $114.50 and $115.00 for a while this morning and then tried to bounce back into that range again this afternoon before finally breaking down below the $114.00 level. Our suggested entry point to buy options for this strangle was the $114.50-115.50 zone. If you missed the entry point you might get another chance as FDX is nearing the 50-dma, which might act as support. We were suggesting the June $120 calls and the June $110 puts. This is a bet that FDX will trade significantly north of $120 or under $110 by June option expiration. Our estimated cost is about $2.60.

Picked on April 30 at $115.13
Change since picked: - 1.53
Earnings Date 06/21/06 (unconfirmed)
Average Daily Volume = 1.4 million

Dropped Calls

Acc. Home Lenders - LEND - cls: 55.24 chg: -2.55 stop: 53.55

A sell-off in financial stocks hit shares of LEND pretty hard today. The stock lost 4.4% by the closing bell ahead of tomorrow's earnings report. Our plan was to exit today near the closing bell to avoid holding over the announcement. Wall Street expects profits of $1.62 a share.

Picked on April 19 at $ 56.57
Change since picked: - 1.33
Earnings Date 05/02/06 (confirmed)
Average Daily Volume = 693 thousand

Dropped Puts

Cbot Holdings - BOT - close: 96.75 chg: -9.20 stop: 113.01

Target achieved. Actually, shares of BOT have completely surpassed our target in the $101.50-100.00 range. The company announced its April volume numbers and the market wasn't happy with the results. BOT lost 8.68% by the closing bell to breakdown below the $100 level and its exponential 200-dma.

Picked on April 27 at $108.95
Change since picked: -12.20
Earnings Date 04/19/06 (confirmed)
Average Daily Volume = 322 thousand


Overseas Shipping - OSG - cls: 48.50 chg: -0.33 stop: 49.26

Shares of oil tanker stock OSG never amassed much downside momentum despite the bearish trend of lower highs and failed rallies under resistance at the 50-dma. It was our plan to exit today near the closing bell to avoid holding over tomorrow's earnings report.

Picked on April 11 at $ 48.10
Change since picked: + 0.40
Earnings Date 05/02/06 (confirmed)
Average Daily Volume = 469 thousand

Dropped Strangles


Play Update Archives