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Call Updates

Autoliv - ALV - close: 55.64 change: -0.87 stop: 54.99

Hmmmm... now may be a good time to worry. We can't find the news that sparked a gap down in shares of ALV today. Plus, the stock has closed under technical support at its 50-dma near $55.70. The MACD has produced a new sell signal. We are not suggesting new bullish positions at this time. Hopefully, if the major indices continue the late Monday afternoon bounce into Tuesday then ALV will rebound with them. A move back over $57.00 might be considered a new entry point. Our mid-June target is the $62.50-63.00 range.

Picked on May 04 at $ 57.53
Change since picked: - 1.89
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 513 thousand

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Omnicom - OMC - close: 92.11 chg: +0.30 stop: 89.99

We have been triggered in OMC. The stock continued to show strength today and broke out over resistance at the $92.00 level. Our trigger to buy calls was at $92.05. More conservative traders should monitor their stop losses carefully as OMC continues to look overbought and due for a dip. The MACD on the daily chart is somewhat worrisome. If shares do pull back we'd look for short-term support at $91.00 and again near $90.00. A bounce from either could be used as a new entry point. Our target is the $97.50-98.00 range. The P&F chart is very bullish with a $110 target.

Picked on May 15 at $ 92.05
Change since picked: + 0.06
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Amazon.com - AMZN - close: 32.78 chg: +0.05 stop: 35.51

AMZN spent most of the session churning sideways before finally bouncing in the last few minutes. We suspect that shares will continue to bounce tomorrow. Watch for overhead resistance near its 10-dma in the $34.00 region. We are not suggesting new positions. Our target is the $31.00-30.75 range.

Picked on May 01 at $ 34.85
Change since picked: - 2.07
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 6.3 million

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Apollo Group - APOL - close: 52.78 chg: +0.52 stop: 55.05

APOL temporarily broke down under support at the $52.00 level this morning but thankfully we remain on the sidelines. Shares hit $51.96 this morning but our trigger to buy puts is at $51.75. We remain bearish and if triggered will target the $47.75-47.50 range.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/22/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Black Box - BBOX - close: 43.10 chg: -1.29 stop: 45.55 *new*

BBOX continued to sink and hit $42.10 as the low today but like many stocks shares produced a decent oversold bounce. The bounce may not be over yet. Watch for the $45.00 level to offer resistance. We're lowering our stop loss to $45.55. Our target is the $40.75-40.00 range.

Picked on May 12 at $ 44.85
Change since picked: - 1.75
Earnings Date 06/01/06 (confirmed)
Average Daily Volume = 90 thousand

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Franklin Res. - BEN - close: 88.75 chg: -0.55 close: 92.55

BEN produced another failed rally this morning, this time at $90.35, before moving to a new two-week low. Volume was well above the daily average, which is bearish. The P&F chart for BEN points to a $77.00 target. We are suggesting puts here under $90.00 with a target in the $85.00-84.50 range. Be advised that we do expect a bounce at the $87.50 region.

Picked on May 14 at $ 89.30
Change since picked: - 0.55
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume = 1.1 million

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IDEXX Labs - IDXX - close: 76.44 chg: -0.59 stop: 79.51 *new*

Uh-oh! Traders need to be cautious here. IDXX spiked lower to $74.37 this morning but produced a strong rebound almost to unchanged. While it does look like the bounce was beginning to fail late this afternoon the overall pattern is one of a bullish reversal. We are not suggesting new bearish positions at this time and expect shares of IDXX to rebound back toward overhead resistance near its 10-dma (currently 78.50). We are lowering our stop loss to $79.51.

Picked on May 11 at $ 77.93
Change since picked: - 1.49
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 125 thousand

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Merrill Lynch - MER - close: 72.50 chg: -0.24 stop: 76.26*new*

MER continues to sink but we suspect a bounce tomorrow. Watch for overhead resistance near $74.00 and again at $75.00. We are lowering our stop loss to $76.26. The P&F chart points to a $67 target. We're going to target a decline into the $70.50-70.00 range.

Picked on May 11 at $ 74.00
Change since picked: - 1.50
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 4.7 million

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USG Corp. - USG - close: 96.66 chg: -5.29 stop: 105.05

Our play in USG is now open. Shares broke down under support at the 50-dma and the $100 level. Our trigger to buy puts was at $99.75. The breakdown was fueled by heavy volume almost twice the daily average, which is bearish. Bear in mind that we would not be surprised by an oversold bounce toward $100 but broken support near $100 should now act as resistance. Our target is the $92.00-90.00 range.

Picked on May 15 at $ 99.75
Change since picked: - 3.09
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 888 thousand
 

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.)

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Fedex - FDX - close: 115.44 chg: +0.38 stop: n/a

FDX spent almost the entire session bouncing sideways inside our suggested entry zone of $114.50-115.50. If you were looking for a new entry point to consider a strangle position then this is it! 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: - 0.31
Earnings Date 06/21/06 (unconfirmed)
Average Daily Volume = 1.4 million
 

Dropped Calls

B P Prudhoe Bay - BPT - close: 70.90 chg: -1.84 stop: 72.45

Oil stocks continued to get hammered today. A drop in crude oil prices to under $70 a barrel just poured fuel on the profit-taking fire that began last week. Shares of BPT gapped open lower at $71.74, which is under our stop loss at $72.45. Shares dipped to $70.30 before reversing course near support at $70.00. More aggressive traders might want to use a bounce from $70 as a new entry point. We're closing the play at this morning's open.

Picked on May 11 at $ 75.05
Change since picked: - 4.15
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 120 thousand

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Nexen - NXY - close: 55.22 chg: -2.16 stop: 56.75

NXY is another oil stock that was hit hard today. The stock gapped lower and open at $55.03. Shares eventually dipped to $53.64 before bouncing late this afternoon. This play was never opened because shares never hit our trigger to buy calls at $61.75. More aggressive traders might want to consider new positions soon if NXY continues to rebound since the 100-dma has
been technical support in the past.

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

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Red Hat - RHAT - close: 29.15 chg: -0.37 stop: 28.99

Tech stocks continued to feel the selling pressure today and the NWX networking index slid under its 200-dma late this afternoon before bouncing. In a similar pattern shares of RHAT slowly consolidated lower until the stock finally dipped under the $29.00 level and stopped us out at $28.99 before bouncing. We would keep an eye on a bounce back above the $30.00 or $31.00 levels as potential (aggressive) entry points for new bullish positions.

Picked on May 04 at $ 31.11
Change since picked: - 1.96
Earnings Date 06/27/06 (unconfirmed)
Average Daily Volume = 3.4 million
 

Dropped Puts

Allegheny Tech - ATI - close: 75.50 chg: -2.95 stop: 82.55

We are going to abandon the ATI play early. We expected some weakness today but we did not expect a gap down to open at $73.25. The stock spent the session bouncing sideways in a three dollar range. Should the major averages produce an oversold bounce soon then ATI could easily fill the gap and maybe more. We'd rather exit early. More aggressive players may want to keep the play open but tighten their stops significantly.

Picked on May 14 at $ 78.45
Change since picked: - 2.95
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 2.2 million

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Bear Stearns - BSC - cls: 133.85 chg: -0.65 stop: 142.55

We are going to suggest an early exit in BSC. Our target was the $132.00-130.00 range and we were cautiously worried about support at its rising 100-dma (currently 131.85). It's possible that some investors were looking to the 100-dma as an entry point for a bounce and some of them jumped in early. BSC's low today was $132.20. We remain bearish on the stock but suspect BSC is due for a bounce. We'd rather exit early than see BSC bounce higher enough to stop us out. We'll keep an eye on BSC for a failed rally near its 50-dma or the $140.00 level as a potential entry point for new put plays. Aggressive traders who can stomach the volatility might want to keep the play open and just adjust their stop loss.

Picked on May 11 at $137.48
Change since picked: - 3.63
Earnings Date 06/15/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Research In Motion - RIMM - cls: 70.66 chg: -3.60 stop: 77.55

Target achieved. RIMM suddenly lost its footing on Monday and broke down under support near $72.00 and its simple 200-dma. Our target was the $71.00-70.00 range. More aggressive traders may want to aim lower since this looks like a significant break down under a long-term trendline of support (see a weekly chart) but keep in mind that the $70 level might offer additional support.

Picked on April 30 at $ 76.63
Change since picked: - 5.97
Earnings Date 07/06/06 (unconfirmed)
Average Daily Volume = 5.8 million
 

Dropped Strangles

None
 

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