Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Call Updates

Autoliv - ALV - close: 56.68 change: -1.41 stop: 54.99

The bears rampaged across the markets today and ALV was not spared. The stock lost another 2.4% following yesterday's pull back. So far we haven't been surprised and warned readers that Tuesday's session looked like a reversal. The question now is whether or not ALV will find support at $56.00 or will it dip to the 50-dma near 55.58 or fall even further? Our mid-June target is the $62.50-63.00 range. We're not suggesting new positions at this time.

Picked on May 04 at $ 57.53
Change since picked: - 0.85
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 513 thousand


B P Prudhoe Bay - BPT - close: 74.25 chg: -0.45 stop: 72.45

Uh-oh! Be careful here. This could be a worse case scenario. Another rise in crude oil this morning helped fuel a bullish breakout in BPT over resistance at $75.00. Our play was triggered at $75.05. Unfortunately, the market's widespread decline did not spare the oil stocks and BPT reversed course. We are not suggesting positions with BPT under $75.00. Currently our target is the $79.75-80.00 range.

Picked on May 11 at $ 75.05
Change since picked: - 0.80
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 120 thousand


Cleveland Cliffs - CLF - close: 96.29 chg: -2.94 stop: 94.45*new*

Watch out! CLF is flashing a big warning sign at us. The stock broke out over the $100 level but couldn't hold its gains given the market-wide breakdown. Shares of CLF ended the session down 2.9% with a bearish engulfing candlestick pattern (a.k.a. bearish reversal pattern). More conservative traders may want to exit immediately. We're going to watch and see if broken resistance at $95.00 acts as support. Please note we're raising our stop loss to $94.45. FYI: The stock is due to split 2-for-1 on June 30th.

Picked on May 08 at $ 95.11
Change since picked: + 1.18
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 692 thousand


Goldman Sachs - GS - cls: 159.28 chg: -4.81 stop: 157.95

We are suggesting that more conservative traders strongly consider exiting right now to avoid further losses in GS. The stock's recent strength and long-term up trend made it another target for profit taking during today's sell-off. We're not suggesting new plays. More aggressive traders might want to consider putting their stop loss under the 50-dma. We'll leave our stop at $157.95 for now.

Picked on May 07 at $164.39
Change since picked: - 5.11
Earnings Date 06/13/06 (unconfirmed)
Average Daily Volume = 3.9 million


Nexen - NXY - close: 59.52 chg: -1.48 stop: 56.75

Another rise in crude oil, this time to over $73 a barrel, was not enough to spare the oil stocks from a market-wide decline. NXY lost 2.4% and closed under what should have been short-term support at $60.00. We are still on the sidelines. We're going to suggest a trigger at $61.75 to open new positions. Our target will be the $67.00-68.00 range.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/13/06 (unconfirmed)
Average Daily Volume = 500 thousand


Omnicom - OMC - close: 91.62 chg: +0.17 stop: 89.99

We are a little bit surprised to see OMC showing relative strength considering the market decline. Shares of OMC spiked higher this morning but failed to breakout over resistance at $92.00. Our strategy remains in play. We want to catch any upward breakout so we're suggesting a trigger to buy calls at $92.05. If triggered our target will be the $97.50-98.00 range. The P&F chart is very bullish with a $110 target.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 1.1 million


Red Hat - RHAT - close: 30.03 chg: -1.50 stop: 28.99*new*

Another sell-off in the software and tech sectors finally unhinged some RHAT investors and the stock closed with a 4.75% loss. Yet so far the stock is clinging toward support near the $30.00 level. A bounce from here can be used as a new bullish entry point but we'd be careful about starting new positions. We are going to raise our stop loss to $28.99. Our target is the $34.75-35.00 range.

Picked on May 04 at $ 31.11
Change since picked: - 1.08
Earnings Date 06/27/06 (unconfirmed)
Average Daily Volume = 3.4 million


Schlumberger - SLB - cls: 71.51 chg: -1.55 stop: 69.59

SLB gapped open at $74.00 and rose to $74.75 before succumbing to some profit taking. Shares have painted what looks like a short-term bearish reversal. We would expect a dip toward $70.00. Wait and watch for a bounce near $70 before considering new bullish positions. Our target is the $78.50-80.00 range.

Picked on May 10 at $ 73.06
Change since picked: - 1.55
Earnings Date 07/21/06 (unconfirmed)
Average Daily Volume = 11.2 million

Put Updates

Amazon.com - AMZN - close: 33.53 chg: -0.63 stop: 35.51*new*

AMZN sank to another new relative low but shares were trying to make a comeback late in the session. We're going to adjust our stop loss to $35.51. Our target remains unchanged at $31.00-30.75.

Picked on May 01 at $ 34.85
Change since picked: - 1.32
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 6.3 million


Atheros Comm. - ATHR - close: 21.71 chg: -1.44 stop: 25.26*new*

Another sharp decline in the semiconductor stocks lead the NASDAQ lower but shares of ATHR under performed its peers again with a 6.2% loss. The stock is nearing our target in the $21.00-20.50 range. Prepare to exit. We are lowering our stop loss to $25.26.

Picked on May 01 at $ 23.77
Change since picked: - 2.06
Earnings Date 04/24/06 (confirmed)
Average Daily Volume = 1.6 million


Research In Motion - RIMM - cls: 73.07 chg: -0.61 stop: 79.01

RIMM officially announced it is launching its Blackberry service in China, which is something we've already warned our readers about. The news prompted some strength this morning but RIMM failed near the $75.00 level. Yet so far the selling is having trouble pushing through its 200-dma. We remain bearish given the stock's recent failed rallies and the market weakness but we're not suggesting new positions. Our target remains the $71.00-70.00 range. More conservative traders may want to exit near $71.70-71.60 due to the simple 200-dma.

Picked on April 30 at $ 76.63
Change since picked: - 3.56
Earnings Date 07/06/06 (unconfirmed)
Average Daily Volume = 5.8 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.)


Fedex - FDX - close: 117.27 chg: -0.82 stop: n/a

A decline in the transportation sector pushed on shares of FDX but the stock managed a bounce from the $116 level this afternoon. We're not suggesting new strangle positions at this time. 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: + 2.14
Earnings Date 06/21/06 (unconfirmed)
Average Daily Volume = 1.4 million

Dropped Calls

Apple Computer - AAPL - close: 68.15 chg: -2.45 stop: 68.45

We have been cautious on AAPL the last couple of days and the 2% sell-off in the NASDAQ composite was too much for the stock. Shares of AAPL fell 3.47% and broke down under the $70.00 level. We have been stopped out at $68.45. The weakness comes in spite of news that rival Sony has capitulated to AAPL's iTunes music format.

Picked on May 04 at $ 72.25
Change since picked: - 4.10
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 36.0 million


Bear Stearns - BSC - close: 137.48 chg: -3.40 stop: 137.99

We are dropping BSC as a bullish candidate. The market's sell-off today hit the brokerage stocks pretty hard since their gains made them a big target for profit taking. Today's breakdown and close under the 50-dma makes BSC look like a bearish candidate. We're closing BSC as an unopened call candidate. Our trigger to buy calls was at $144.10.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/15/06 (unconfirmed)
Average Daily Volume = 1.2 million

Dropped Puts


Dropped Strangles


Play Update Archives