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Call Updates

Goldman Sachs - GS - close: 152.94 chg: +5.62 stop: 146.75*new*

Looks like we weren't the only ones who thought GS made a tempting bullish candidate. Before the opening bell UBS upgraded the stock to a "buy" and raised their price target $5 to $180. The market responded by sending GS to a 3.8% gain, which fueled another strong day of gains for the XBD broker-dealer index. Shares of GS closed right at their highs for the session, which is normally a bullish sign for the next day of trading. We are not suggesting new positions since our target is the $153.50-154.00 range. More aggressive traders may want to aim higher. The 50-dma makes a potential target near $157. Please note we're raising our stop loss to $146.75.

Picked on May 25 at $147.32
Change since picked: + 5.62
Earnings Date 06/13/06 (confirmed)
Average Daily Volume = 4.5 million

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Halliburton - HAL - close: 73.65 chg: -0.15 stop: 68.65

The rebound in HAL took a vacation on Friday. Shares churned sideways in a $1.15 range. As expected the intraday move over $74.00 produced a new P&F chart buy signal, which now points to an $85 target. We do not see any changes from our Thursday night play description so we're reposting it here:

We are going to try again with the oil stocks. The OIX oil index is bouncing from technical support near its rising 200-dma. The OSX oil services index never fell much past its 100-dma and it appears to be turning around. Lending strength to the group is a rally in crude oil back to $71.00 a barrel. HAL is one of the biggest oil service companies in the world so if the oil stocks catch fire again HAL should be leading the charge. Currently shares of HAL are bouncing after spending four days consolidating above support at its rising 200-dma. Should the stock trade over $74.00 it will produce a new Point & Figure chart buy signal. We are going to target a move back into the $80.00-82.00 range. Please note that HAL is due to split 2-for-1 on July 17th.

Suggested Options:
We are suggesting the June or July calls. Right now our preference would be for Julys. The June options have three weeks left until expiration.

BUY CALL JUN 70.00 HAL-FN open interest=2361 current ask $4.80
BUY CALL JUN 72.50 HAL-FA open interest=1205 current ask $3.10
BUY CALL JUN 75.00 HAL-FO open interest=7709 current ask $1.80
BUY CALL JUN 80.00 HAL-FP open interest=7154 current ask $0.50

BUY CALL JUL 70.00 HAL-GN open interest=13737 current ask $6.40
BUY CALL JUL 72.50 HAL-GA open interest= 4858 current ask $4.90
BUY CALL JUL 75.00 HAL-GO open interest=17153 current ask $3.60
BUY CALL JUL 80.00 HAL-GP open interest=21258 current ask $1.85

Picked on May 25 at $ 73.80
Change since picked: - 0.15
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 7.1 million

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Holly Corp. - HOC - close: 81.44 chg: +0.24 stop: 75.95

Friday's session saw HOC's MACD indicator produce a new buy signal and the Point & Figure chart target has risen from $96 to $99. Other than those two items we do not see any changes from our new play description from Thursday night so we're reposing it here:

HOC is another oil stock we're adding to the play list as a call candidate. What makes HOC interesting is that shares held up better than a lot of its peers during the oil-sector profit taking over the last few weeks. Now that the market and the oil sectors are bouncing shares of HOC are breaking out over resistance at its trendline of lower highs. The MACD is near a new buy signal and short-term technicals look positive. The P&F chart points to a $96.00 target. The one item that concerns us is HOC's upcoming stock split. Shares are due to split 2-for-1 on June 2nd. Now in the past stocks tend to rise into their split and then see a post-split depression. Plus, stocks tend to be less volatile post-split and that's not great for our options. We're going to go forward with HOC as a candidate but keep these things in mind. Our target will be the $89.00-90.00 range or 44.50-45.00 post-split.

Suggested Options:
We are suggesting the June and July options. We prefer Julys. June options only have three weeks left until expiration.

BUY CALL JUN 80.00 HOC-FP open interest=606 current ask $3.90
BUY CALL JUN 85.00 HOC-FQ open interest=419 current ask $1.45

BUY CALL JUL 80.00 HOC-GP open interest= 99 current ask $6.20
BUY CALL JUL 85.00 HOC-GQ open interest=222 current ask $3.80

Picked on May 25 at $ 81.20
Change since picked: + 0.24
Earnings Date 08/07/06 (unconfirmed)
Average Daily Volume = 475 thousand

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iShares Global Energy - IXC - cls: 104.66 chg: +0.99 stop: 99.49

The IXC continued to rebound on Friday adding almost 1%. If you prefer to buy a dip then look for a pull back toward $102.50-102.00. We are expecting some resistance in the gap from May 15th so the $106.50-107.75 region could see some volatility. Overall we don't see any changes from our new play description from Thursday night so we're reposting it here:

Instead of considering a call position on one individual energy stock we're going to suggest calls on the global energy iShares (IXC). This will protect us from any individual stock news from killing the position and give us exposure to any rebound in the sector. While we're not excited about the extremely low volume or the low option volume it's worth considering as a candidate. Technically the IXC has consistently found support at its rising 200-dma in the past and shares are bouncing from the 200-dma again. Short-term technicals are turning positive. We are going to suggest calls with the IXC above $102.00. More conservative traders may want to wait for a move over $104.50 or $105.00 before initiating positions. Our target will be the $110.00-112.00 range.

Suggested Options:
We are suggesting the June or July calls. While Junes have more open interest but for time reasons we'd prefer the Julys. June options are due to expire in three weeks.

BUY CALL JUN 100.00 IXC-FT open interest=30 current ask $6.00
BUY CALL JUN 105.00 IXC-FA open interest=68 current ask $2.75

BUY CALL JUL 100.00 IXC-GT open interest= 0 current ask $7.50
BUY CALL JUL 105.00 IXC-GA open interest= 0 current ask $4.50
BUY CALL JUL 110.00 IXC-GB open interest= 0 current ask $2.35

Picked on May 25 at $103.67
Change since picked: + 0.99
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 47 thousand

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Komag - KOMG - close: 43.21 chg: -0.03 stop: 41.99

We find it interesting that shares of KOMG are not participating in the market rebound. Instead the stock has been consolidating sideways in a narrowing range. It is the narrowing range or coiling pattern that suggests we'll see a breakout (either direction) soon. For the moment we're going to keep KOMG on the play list as a call candidate with our trigger to buy calls at $46.11. This would require KOMG to breakout past resistance at the 50-dma (45.32), the 100-dma (45.77) and the $46.00 level. If triggered at $46.11 our target will be the $49.75-50.00 range. The P&F chart points to a $57 target but appears to have produced a bull trap pattern, which is another reason we want to use a trigger.

Suggested Options:
If triggered we would suggest the July calls.

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: 94.02 chg: -0.06 stop: 90.64

OMC's relative strength may have temporarily run out of steam. The stock spiked higher this morning but ended up producing a failed rally under round-number, psychological resistance at the $95.00 level. If OMC produces any sort of follow through on this failed rally (a.k.a. short-term bearish reversal) then we'd expect shares to dip back toward the $92.00-91.00 region before attempting a bounce. Therefore we're not suggesting new call plays at this time but readers can be on the look out for a pull back and bounce. The Point & Figure chart points to a $119.00 target. We are aiming for the $97-98 range. More aggressive traders may want to aim for $100.00.

Suggested Options:
We are not suggesting new bullish positions in OMC at this time.

Picked on May 15 at $ 92.05
Change since picked: + 1.97
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Priceline.com - PCLN - close: 31.40 chg: +0.73 stop: 29.25

Friday saw PCLN spike to $32.16 before paring its gains and closing with a 2.3% gain on the session. Volume was about three times the daily average, which is bullish. The move higher pushed the Point & Figure chart target from $50.00 to $53.00. Internet stocks produced a big breakout on Thursday and that's what helped PCLN breakout past the $30.00 level. We are suggesting calls with PCLN above $30.00. Our target will be the $34.50-35.00 range.

Suggested Options:
We are suggesting the July calls.

BUY CALL JUL 30.00 PUZ-GF open interest=1429 current ask $2.50
BUY CALL JUL 35.00 PUZ-GG open interest= 115 current ask $0.60

Picked on May 25 at $ 30.67
Change since picked: + 0.73
Earnings Date 08/02/06 (unconfirmed)
Average Daily Volume = 432 thousand
 

Put Updates

Amgen Inc. - AMGN - close: 68.81 chg: +0.65 stop: 70.01

It was a bullish day for biotech stocks on Friday. The BTK biotech index added 2% and marked its third big gain in a row. Instead of leading, shares of AMGN followed the sector index higher with a 0.9% gain. The big bounce in the BTK index does concern us but the index is just now testing one of its trendlines of resistance (lower highs). The real test of strength will be next week. More conservative traders may want to exit AMGN as a bearish play anyway but we're not going to give up just yet. Shares have been under performing its peers and the stock remains under its long-term trend of lower highs. Plus, there is overhead resistance at the simple 50-dma (currently 69.47). We are not suggesting new positions at this time. The Point & Figure chart still points to a $60 target.

Suggested Options:
We are not suggesting new bearish positions in AMGN at this time.

Picked on May 23 at $ 66.85
Change since picked: + 1.96
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 8.8 million

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Apollo Group - APOL - close: 51.38 chg: +0.11 stop: 54.45

Shares of APOL are still trying to bounce from the $50 level. A week ago shares broke down under support near $52.00, which was the neckline to its bearish head-and-shoulders pattern. We warned readers to expect a bounce from $50 potentially back to the $52 level, which should now act as overhead resistance. APOL is still rebounding and we expect it to trade near $52 before fading lower again. If APOL can trade under $50.00 again it will produce a new Point & Figure chart sell signal. Our target is the $47.75-47.50 range near its early March lows.

Suggested Options:
We would consider the July puts but keep in mind that we plan to exit ahead of the late June earnings report. Wait for the bounce to fail before initiating new plays.

Picked on May 17 at $ 51.75
Change since picked: - 0.37
Earnings Date 06/20/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Franklin Res. - BEN - close: 90.39 chg: +1.62 close: 92.55

An upgrade for GS helped fuel another bounce in the investment-related stocks and the XBD index rose 2%. Shares of BEN followed with a 1.8% gain although volume came in relatively low. We have been warning readers to expect a rebound into the $90.00-92.00 range and it is occurring now. While we expected the bounce that does not make it any less painful if you're holding put positions. Short-term technicals are turning bullish and we do expect shares to challenge the 200-dma (91.86) and potentially the $92.00-92.50 region. BEN should find resistance in the $92.00-92.50 zone near the top of its descending channel (see chart). More conservative traders may want to consider an early exit right now to minimize any losses. One can always re-enter a bearish position on a failed rally.

Suggested Options:
We are not suggesting new bearish positions at this time.

Picked on May 14 at $ 89.30
Change since picked: + 1.09
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume = 1.1 million

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3M Co. - MMM - close: 83.26 chg: -0.56 stop: 85.01

MMM's downward momentum has stalled with the market's two-day bounce. While MMM has been consolidating sideways, sort of an under performance compared to its peers, we are not suggesting new bearish positions at this time. We're going to leave our stop loss at $85.01 for now but more conservative traders may want to consider a tighter stop (maybe 84.26).

Suggested Options:
We are not suggesting new plays in MMM at this time.

Picked on May 23 at $ 83.44
Change since picked: - 0.18
Earnings Date 07/21/06 (unconfirmed)
Average Daily Volume = 3.2 million

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SanDisk - SNDK - close: 59.64 chg: +0.80 stop: 63.05

The technology-rich NASDAQ index may be bouncing from its lows but the index's strength is not having much affect on SNDK, at least not yet. Shares of SNDK have been under performing and remain under minor resistance at the $60 level for now. The technical pattern remains bearish and the P&F chart continues to point to a $53 target. If SNDK does bounce we'd look for a rise into the $61.00-61.50 region. However, we would only consider put positions with SNDK under $60.00 but considering the bounce in the major averages we'd hesitate to open new put positions right now. Our target remains the $53.00-52.50 range. We do expect an initial bounce at the $55.00 level. Next week could be some news. SNDK is due to present at a semiconductor company conference on June 1st.

Suggested Options:
We would be cautious about opening new put positions at the moment. If you do buy puts we'd suggest the July strikes.

Picked on May 23 at $ 58.98
Change since picked: + 0.66
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 11.1 million
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

Burlington NorSantaFe - BNI - close: 77.44 chg: +0.99 stop: 77.51

Volume has been light on the recent bounce but that did not stop shares of BNI from hitting our stop loss at $77.51 on Friday morning. We would keep an eye on BNI for a failed rally near $80.00 as a potential entry point for new puts. A breakout over $80 could be used as an entry for call positions.

Picked on May 23 at $ 75.06
Change since picked: + 2.38
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 2.0 million

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IDEXX Labs - IDXX - close: 76.51 chg: +0.54 stop: 77.05

IDXX is trying to bounce and another strong day for the biotech index on Friday helped push IDXX to short-term resistance at its 10-dma. Studying the intraday chart shares of IDXX look poised to move higher next week. While the stock remains under the 10-dma shares produced a bullish engulfing candlestick on Friday so we're suggesting that readers exit early right now. We would keep an eye on IDXX for future plays if the stock fails to breakout over the $80 level.

Picked on May 11 at $ 77.93
Change since picked: - 1.42
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 125 thousand

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Ipsco Inc. - IPS - close: 94.70 chg: +1.50 stop: 97.55

We are going to cut our losses in IPS right here. The stock added another 1.6% and broke out over the simple 10-dma. The stock does appear to have some resistance near $96.00 and again at the 100-dma (97.42) and the $100 level but we don't want to endure that kind of bounce holding puts. We can always consider re-entering bearish plays if IPS produces a failed rally near $100. What concerns us is the weekly chart's "hammer" candlestick, which is typically seen as a bullish reversal.

Picked on May 18 at $ 93.95
Change since picked: + 0.75
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 459 thousand
 

Dropped Strangles

None
 

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