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Call Updates

Anadarko Petrol. - APC - close: 98.70 chg: -0.74 stop: 97.99

APC's volume on Monday was huge. The battle between the bulls and bears is getting pretty heated and as they duel over control the stock is bouncing between the 200-dma and the $100 region. It was a volatile session but shares remain under the $100 mark and today's loss failed to confirm Friday's bullish reversal pattern. That's a big warning flag for the bulls! We are still expecting an oversold bounce so we're going to stick to our trigger at $100.15 for now. However, nimble traders may want to be ready to buy puts if APC continues lower and trades under $95.00. If triggered at $100.15 we are targeting a move into the $104.50-105.00 range. FYI: APC is due to split 2-for-1 on May 29th.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume = 2.3 million

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Carpenter Tech. - CRS - cls: 109.11 chg: -6.14 stop: 111.45

The sell-off in steel stocks continues. Shares of CRS gapped down to open at $106.84 and then churn sideways in a volatile $5.00 range all day. Volume was very big at close to four times the daily average. The close under its simple 50-dma is bearish but since we're still sitting on the sidelines we'll keep CRS as a bounce candidate for now. Our trigger remains at the $116.51 to buy calls. More aggressive traders may want to consider buying calls near $114.50-115.00. If triggered we'll target a rebound into the $123.00-125.00 range.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/24/06 (unconfirmed)
Average Daily Volume = 448 thousand

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Deere Co - DE - close: 83.28 chg: -0.88 stop: 83.29

Uh-oh. We might need to buy puts instead. DE had pulled back toward rising technical support at its 50-dma but today's decline is a close under that moving average. We still expect the market to bounce eventually so we're going to leave our trigger to buy calls at $84.71 for now. More conservative traders may want to use a trigger over $85.00. Our target will be the $88.00-88.50 range.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/15/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Getty Images - GYI - cls: 64.65 chg: +0.39 stop: 62.49

GYI displayed some relative strength today with a 0.6% gain. We are still spectators at this point. We are suggesting a trigger at $65.21 to buy calls. This trigger is above last Tuesday's high of $65.15. It is imperative that readers trade with a stop loss. GYI has produced these bottoming patterns before only to quickly reverse course when it nears technical resistance at its 50-dma. Currently the 50-dma has declined to $69.27 so we are going to adjust our target to $69.00-65.50. More conservative traders may want to put their stop under Thursday's low near $63.00.

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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Komag - KOMG - close: 44.40 chg: -1.30 stop: 41.99

KOMG failed to produce a follow through on last week's bullish breakout over $45.00 and its 100-dma. The stock spiked lower at the open today and traded sideways under $44 for most of the session before a late day bounce. In the news today Komag and Seagate "reaffirmed their strategic relationship. Seagate has recently completed its acquisition of Maxtor Corp. Both Seagate and Maxtor are customers of Komag" (source: KOMG press release). We are going to keep KOMG as a bullish candidate for now with our trigger to buy calls at $46.11. Our short-term target will be the $49.75-50.00 range. More aggressive traders may want to aim higher.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Omnicom - OMC - close: 91.52 chg: -0.33 stop: 90.64 *new*

Taking into account the ongoing market-wide weakness we are raising the stop loss on OMC to $90.64, which is just under today's low. We are not suggesting new positions at this time.

Picked on May 15 at $ 92.05
Change since picked: - 0.53
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Occidental Petrol. - OXY - cls: 93.11 chg: -0.95 stop: 91.99

OXY produced a similar session to APC. The stock gapped lower before rising late this afternoon. The move is a failure to confirm Friday's bullish engulfing candlestick pattern. We're going to keep OXY as a bullish candidate for now. We're suggesting a trigger to buy calls at $95.05. We're only looking for an oversold bounce into the $99.00-100.00 range. Remember, this is an aggressive play because our short-term outlook on crude oil is bearish with an expectation crude will slide toward the $66-65 range before moving higher again. That will put pressure on the oil stocks.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 3.4 million
 

Put Updates

Apollo Group - APOL - close: 51.77 chg: +0.51 stop: 54.65

APOL produced a bit of an oversold bounce today. The stock struggled to break through old support, now new resistance, at the $52.00 level. Our target is the $47.75-47.50 range near its early March lows. We do expect some support at the $50.00 level so it would not surprised us to see shares bounce around the $50-52 region for a while.

Picked on May 17 at $ 51.75
Change since picked: + 0.02
Earnings Date 06/22/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Franklin Res. - BEN - close: 87.56 chg: -1.19 close: 92.55

Brokerage and investment-related stocks took a beating today with the XBD index falling 2.4%. Shares of BEN closed with a 1.3% decline. We do not see any changes from our weekend update. We are not suggesting new positions at this time. Our target remains the $85.00-84.50 range.

Picked on May 14 at $ 89.30
Change since picked: - 1.74
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume = 1.1 million

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CB Richard Ellis - CBG - cls: 76.56 chg: -0.85 stop: 82.71

CBG lost another 1.09% today but shares failed to hit a new relative low. We are concerned that the stock's next move will be an oversold bounce back toward the $80.00-82.00 region. We'd wait for the bounce to appear and begin to stumble before considering new bearish plays. We will continue to target the 100-dma, currently at 73.46. To account for our moving target we'll use an exit range of $73.75-73.00.

Picked on May 17 at $ 77.93
Change since picked: - 1.37
Earnings Date 05/02/06 (confirmed)
Average Daily Volume = 613 thousand

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IDEXX Labs - IDXX - close: 76.05 chg: -0.56 stop: 78.05 *new*

We are still concerned about a potential bounce in IDXX. We're going to adjust the stop loss to $78.05, which is above short-term resistance at $78.00 and its 10-dma. We are not suggesting new put positions at this time. Our target is the $74.00-73.50 just above the simple 200-dma. FYI: the P&F chart points to a $64 target.

Picked on May 11 at $ 77.93
Change since picked: - 1.32
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 125 thousand

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Ipsco Inc. - IPS - close: 89.70 chg: -4.58 stop: 100.26

Steel and materials stocks continued to see heavy selling on Monday. IPS lost 4.85% on very heavy volume that was more than double the daily average. The stock closed under potential round-number support at the $90.00 level. This aggressive, high-risk play is moving in our favor but we are wary that shares could snap-back in an oversold bounce. We'll leave our stop at $100.26 for now but more conservative traders may want to adjust theirs toward the $96-97 region. The P&F chart points to an $83 target. We are targeting the $85.50-84.50 range, which is above what we suspect will be support at its rising 200-dma.

Picked on May 18 at $ 93.95
Change since picked: - 4.25
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 459 thousand

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Nucor - NUE - close: 100.25 chg: -4.70 stop: 110.26 *new*

NUE is another metals stock that experienced heavy selling today. Shares dipped to $96.63 before seeing a bounce back toward the $100 level. That was almost to our target in the $95.50-95.00 range. We are a little bit concerned by the sharp rebound and would expect the bounce to continue tomorrow. Look for short-term resistance in the $105-106 region. We are going to adjust our stop loss to $110.26. More conservative traders may want to tighten their stop even more. The P&F chart is bearish and points to an $82 target. NUE is due to split 2-for-1 on June 1st.

Picked on May 17 at $105.40
Change since picked: - 5.15
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 2.5 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.)

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Fedex - FDX - close: 110.05 chg: +0.71 stop: n/a

We do not see any changes from our weekend update for FDX. 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 plan on exiting if shares of either option rose to $4.50 or more.

Picked on April 30 at $115.13
Change since picked: - 5.08
Earnings Date 06/21/06 (unconfirmed)
Average Daily Volume = 1.4 million
 

Dropped Calls

Cigna - CI - close: 92.62 change: -0.63 stop: 91.99

We have been stopped out of CI with the stock's gap down this morning. Unfortunately, we could not find any specific news to account for shares gapping lower to open at $91.17 today. Our stop was at $91.99 so we should have been taken out immediately.

Picked on May 16 at $ 94.52
Change since picked: - 1.90
Earnings Date 08/02/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Eagle Materials - EXP - close: 48.89 chg: -3.32 stop: 49.45

EXP was a new play from our weekend newsletter. It looks like we should have used a trigger to enter the position and confirm the bounce. We did not and the sell-off in materials hit full force again on Monday. Shares of EXP were weak from the open and closed with a 6.3% loss. We would have been stopped out at $49.45.

Picked on May 21 at $ 52.21
Change since picked: - 3.32
Earnings Date 08/01/06 (unconfirmed)
Average Daily Volume = 1.2 million
 

Dropped Puts

Amazon.com - AMZN - close: 34.83 chg: +0.89 stop: 34.35

AMZN's oversold bounce marked its third gain in a row today thanks in part to an analyst upgrade this morning. Volume was pretty heavy on the rebound, which is bad news for the bears. We are stopped out at $34.35.

Picked on May 01 at $ 34.85
Change since picked: - 0.02
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 6.3 million
 

Dropped Strangles

None
 

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