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Call Updates

Cigna - CI - close: 93.19 change: -1.33 stop: 91.99

Normally healthcare-related stocks tend to be seen as defensive and that may have insulated shares of CI from today's sell-off. Of course there has been so much selling in CI lately that those investors who were going to sell probably have already but that's not to suggest that CI can't go any lower. The stock did lose 1.4% but overall shares still look poised to bounce. The MACD indicator even produced a new buy signal today. We would hesitate to open new call positions with the major averages looking so bearish so we'd wait for signs of a bounce first. Be advised that we do expect some resistance at the $100.00 mark so we're setting our target at $99.75-100.00. More aggressive traders may want to aim higher since the $105 level looks like more serious resistance and the P&F chart points to a $108 target.

Picked on May 16 at $ 94.52
Change since picked: - 1.33
Earnings Date 08/02/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Getty Images - GYI - cls: 64.57 chg: -0.38 stop: 62.49

GYI held on pretty well today considering the market sell-off. Those stocks hit hardest were the high-flyers. Shares of GYI have already been beat up so most of the bad news has already been priced in. We are going to suggest a trigger at $65.21, which is above Tuesday's high (65.15). If triggered then we'll target a rally into the $69.50-70.00 range. We're worried that the $70.00 level and the descending 50-dma, currently at 70.29, will act as overhead resistance. It is imperative that you use a stop loss. GYI has produced these bottoming formations before only to have the nascent rally get squashed, usually under the 50-dma.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 997 thousand

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Omnicom - OMC - close: 91.54 chg: -0.38 stop: 89.99

We are still amazed by OMC's relative strength. Given its recent gains we thought for sure it would be a target of profit taking on a day like today. Shares traded mostly sideways all session under the $92.00 level. We are still urging caution. The MACD on the daily chart has produced a new sell signal. Odds are growing that OMC will dip toward the $90.00 level. We're not suggesting new positions. 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: - 0.51
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Amazon.com - AMZN - close: 31.61 chg: -1.15 stop: 34.85*new*

The INX Internet index lost 1.75% and broke down under technical support at its simple and exponential 200-dma(s), which is a bearish development. Contributing to the index's weakness was AMZN, which lost 3.5% to close near its lows of the session. We're going to lower our stop loss to breakeven at $34.85. More conservative traders may want to consider a stop closer to $34.00 or consider taking profits right here. Our target is the $31.00-30.75 range.

Picked on May 01 at $ 34.85
Change since picked: - 3.24
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 6.3 million

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Apollo Group - APOL - close: 51.97 chg: -0.72 stop: 55.05

Our bearish play in APOL is now open. Shares broke down under support at the $52.00 level and hit our trigger to buy puts at $51.75. Technically this is a breakdown under the neckline of its bearish head-and-shoulders pattern but there did not seem to be a lot of follow through selling. Our stop loss is at $55.05 but more conservative traders might want to consider one closer to $53.50. Our target is the $47.75-47.50 range.

Picked on May 17 at $ 51.75
Change since picked: + 0.22
Earnings Date 06/22/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Franklin Res. - BEN - close: 87.69 chg: -1.30 close: 92.55

Investment-related stocks were big losers today with the XBD index losing 2.9%. Shares of BEN did better than some of its peers with a 1.46% decline. It looks like the bounce from its lows this afternoon was struggling with the $88.00 level so we're looking for some more weakness tomorrow assuming the major averages don't bounce too high. Volume continues to come in above average, which is bearish. Our target is the $85.00-84.50 range.

Picked on May 14 at $ 89.30
Change since picked: - 1.61
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume = 1.1 million

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IDEXX Labs - IDXX - close: 77.15 chg: -0.67 stop: 79.51

We have been very cautious on IDXX the last couple of days given the bullish reversal but today's market crash helped stall the rebound. Shares remain under short-term resistance at its 10-dma. We're still not comfortable suggesting new put positions here. More conservative traders may want to exit early right now or significantly tighten their stops.

Picked on May 11 at $ 77.93
Change since picked: - 0.78
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 125 thousand
 

Strangle Updatess

(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: 109.92 chg: -5.51 stop: n/a

The high-flying transport stocks got crushed today. The DJ Transportation index lost 2.65%. Leading the way was FDX, which fell 4.77% and is testing support near $110 and its simple 100-dma. Volume on today's sell-off was nearing three times the daily average. We are not suggesting strangle positions at this time. The options involved in our strangle are 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 was about $2.60. We would exit if the puts rose to $4.55 or higher. More aggressive traders may want to aim higher since the puts are currently trading in the $4.10/4.20 range.

Picked on April 30 at $115.13
Change since picked: - 5.81
Earnings Date 06/21/06 (unconfirmed)
Average Daily Volume = 1.4 million
 

Dropped Calls

Autoliv - ALV - close: 54.70 change: -2.00 stop: 54.99

ALV's recent bullish reversal was no match for a market-wide sell-off. The stock plunged through potential support at the 50-dma and the $55.00 level. We would have been stopped out at $54.99. Nimble traders may now want to consider bearish positions given today's breakdown! Look for support near the 100-dma and again near $50.00. We offer kudos to any traders who exited at our conservative target near $60.00 several days ago.

Picked on May 04 at $ 57.53
Change since picked: - 2.83
Earnings Date 04/27/06 (confirmed)
Average Daily Volume = 513 thousand
 

Dropped Puts

Merrill Lynch - MER - close: 70.49 chg: -2.21 stop: 75.55

Target achieved. MER lead the brokers lower with a high-volume 3% decline. Volume came in about twice the daily average. Shares hit $69.85 before bouncing. Our target was the $70.50-70.00 range.

Picked on May 11 at $ 74.00
Change since picked: - 3.51
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 4.7 million

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USG Corp. - USG - close: 91.97 chg: -0.78 stop: 100.01

Target achieved. It was another volatile day for USG. Shares dipped to $90.45 before bouncing back to challenge the $95.00 level and then fail again. Currently shares are resting on technical support at its 100-dma. Our target was the $92.00-90.00 range.

Picked on May 15 at $ 99.75
Change since picked: - 7.78
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 888 thousand
 

Dropped Strangles

None
 

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