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Call Updates

Chipolte Mex Grill - CMG - cls: 61.90 chg: -0.95 stop: 57.45

CMG, like the market, churned sideways last week. Overall shares of CMG are still trading inside its bullish, rising channel (see chart) and its Point & Figure chart points to a $78 target. We're not expecting much from CMG until after the FOMC meeting this coming week so traders might want to wait until we see what direction the market is going. If you're looking for an entry point you could buy calls here near $62 but we'd prefer trying to catch a dip and bounce near the $60.00 level (probably 60.50-60.60). Our target is the $67.50-70.00 range. We do not want to hold over the late July earnings report.

Suggested Options:
Given the sideways market and sideways trading in CMG we're not suggesting new bullish positions at this time although traders can see our suggestions on entries in the above play description. July options expire in four weeks!

Picked on June 18 at $ 61.76
Change since picked: + 0.14
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 384 thousand

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Cognizant Tech. - CTSH - close: 66.56 chg: +1.75 stop: 62.49

CTSH turned in a strong week. The stock displayed plenty of relative strength on Friday with a 2.7% gain to close over potential resistance at the $65.00 level again. Friday morning's move over $65.05 was a new entry point. We did not see any specific news to account for Friday's strength but we're not going to complain about it. Our only concern would be that volume was not very impressive on Friday's gain. At this time we would probably suggest looking for a dip back toward the $65.00 area as an entry point to buy calls. Our target is the May highs in the $69.50-70.00 range. The P&F chart has a triple-top breakout buy signal with an $80 target.

Suggested Options:
We are not suggesting new plays at this time but if an entry presents itself we'd pick the July or August calls. We do not want to hold over the late July earnings report. July options expire in four weeks!

Picked on June 24 at $ 65.05
Change since picked: + 1.51
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 1.4 million

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General Dynamics - GD - cls: 65.40 chg: +0.08 stop: 63.99

The major market averages churned sideways last week and shares of GD followed suit. The stock has been bouncing around the $65-66 range and we're not anticipating any change from that pattern until after the FOMC meeting. Yet that doesn't mean that readers can't be ready for a potential entry point if one appears. The midday strength on Friday looked like an entry point but the rally faded. Now we would look for a move past Friday's high (66.17) or a bounce from the $64.50 region to be used as a new bullish entry point to buy calls. Our target is the $69.00-70.00 range.

Suggested Options:
We are expecting more sideways trading next week so we're not listing any options at this time. However, if an entry point presents itself we'd pick the July or August calls. Just remember we want to exit ahead of the July earnings report. July options expire in four weeks!

Picked on June 18 at $ 66.12
Change since picked: - 0.72
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Google - GOOG - close: 404.86 chg: + 4.91 stop: 384.50

GOOG displayed some relative strength on Friday with a rally to $409.75. Unfortunately, some afternoon profit taking pared its gains leaving shares with a 1.2% gain. Volume came in pretty low. One concern we have is that the markets are likely to trade sideways until after the FOMC meeting concludes next week. Without any market support then GOOG may just continue to bounce around its slowly rising, bullish channel. It's easy to see on the hourly chart. If you start the channel around May 19th you can see that GOOG has rallied toward the top of the channel and now looks vulnerable to a pull back toward the bottom of the channel near $395-392.50 (maybe $390). We would hesitate to open new bullish positions at this time but a bounce from the 50-dma near $395 (or even the $400 level) could be used as an entry point. The Point & Figure chart remains bullish and points to a $444 target. Our target is the $440-445 range.

Suggested Options:
We are not suggesting new plays in GOOG due to our expectation of a sideways market but should an entry point appear we'd pick the July or August calls. Just remember that we want to exit ahead of the July earnings report. July options expire in four weeks!

Picked on June 21 at $401.00
Change since picked: + 3.86
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 9.8 million

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Legg Mason - LM - close: 100.90 chg: +0.90 stop: 96.99

The XBD broker-dealer index is flirting with a bullish breakout from its eight-week bearish channel and resistance at the 210 level. We would be cautious about buying calls in this group until the XBD does trade over the 210 level. Meanwhile shares of LM are still churning sideways between $98.50 and $102.00. The high on Friday was $101.92. We've been suggesting that readers wait for a move over $102.00 or $102.50 as a potential entry point to buy calls. More conservative traders may want to raise their stop loss toward $98.40 under the bottom of the current range. We are somewhat concerned that LM will hit resistance at its descending 50-dma, currently at 106.62. As an alternative we're going to list a new play in this sector with a trigger to catch any future breakout.

Suggested Options:
We are expecting more sideways trading next week so we're not listing any options at this time. However, if an entry point presents itself we'd pick the July or August calls. Just remember we want to exit ahead of the July earnings report. July options expire in four weeks!

Picked on June 18 at $102.45
Change since picked: - 1.55
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Manpower - MAN - close: 64.91 change: -0.33 stop: 63.99*new*

The rally in MAN is struggling to maintain any momentum. Shares broke out on Wednesday only to reverse course. It might be just profit taking or last week may have been a bull trap. The MACD on the daily chart is bullish but the MACD on the weekly chart is bearish. We rarely do it but we need to widen our stop loss. Our stop was at $64.45 and MAN almost hit our stop loss on Friday with a low of $64.47. More conservative traders may want to leave their stop where it's at. We're going to adjust our stop loss to $63.99, which is underneath short-term support at its 10-dma (64.14). We are not suggesting new bullish plays until MAN trades back above $66.00 (or 66.50). Our target is the $69.85-70.00 range. The P&F chart now points to an $80.00 target so more aggressive traders may want to aim higher. We do not want to hold over the mid-July earnings report.

Suggested Options:
We are not suggesting new plays at this time. If an entry point appears we'd pick the July calls. Don't forget that we want to exit ahead of the July earnings report. July options expire in four weeks!

Picked on June 21 at $ 66.05
Change since picked: - 1.14
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 959 thousand

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Reynolds American - RAI - cls: 110.66 chg: -0.49 stop: 107.75

We are urging a new sense of caution with RAI. Some of the momentum indicators are turning bearish. The stock has pulled back toward support near the $110 level and its 50-dma (110.25). RAI hit a low of $109.70 before bouncing on Friday. More conservative traders may want to put their stop loss under Friay's low. We're going to keep our stop under tested technical support at its rising 100-dma. However, a close under $110 would look pretty negative! We are suggesting two targets. Our conservative target is $115.00. Our aggressive target is $119.00. The P&F chart is still bullish and points to a $148 target.

Suggested Options:
We are not suggesting new plays in RAI at this time. We do not want to hold over the July earnings report. July options expire in four weeks!

Picked on June 15 at $111.15
Change since picked: - 0.49
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 632 thousand

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United Tech. - UTX - close: 62.28 chg: +0.39 stop: 59.95*new*

UTX displayed some relative strength on Friday with a breakout over short-term resistance at $62.00. Unfortunately, the stock is still trading under technical resistance at its 40 and 50-dma(s). We only have about three weeks left before UTX is expected to report earnings and that's with an unconfirmed announcement date. We may have less time. Keep that in mind when considering new plays. We are going to raise our stop loss to $59.95 since UTX should have support at $60.00 and its 100-dma near 60.25. Our target remains the $64.00-65.00 range.

Suggested Options:
We are not suggesting new plays at this time but traders might want to use a dip near its 10-dma (in the 61.00-60.85 region) as a new entry point.

Picked on June 08 at $ 60.13
Change since picked: + 2.15
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 3.7 million
 

Put Updates

Apple Computer - AAPL - close: 58.83 chg: -0.75 stop: 60.05

The technical picture for AAPL is looking more bullish. The MACD, RSI and stochastics have all produced bullish buy signals in the last couple of days. Yet the stock is struggling to see any follow through higher. We are going to keep AAPL on our play list as a bearish candidate for now although we'll probably drop it if shares close over the $60.00 level. On Thursday we suggested that more nimble and aggressive traders might want to consider buying calls if AAPL can breakout past the $60 level. We're keeping our strategy to buy puts if AAPL trades at $56.85 or lower. If triggered our target will be the $50.50-50.00 range. We do not want to hold over AAPL's mid July earnings report. FYI: The Point & Figure chart points to a $44 target.

Suggested Options:
We are not suggesting new plays at this time. Our trigger to buy puts is at $56.85. If triggered we are suggesting the July or August puts.

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 33.1 million

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Amgen Inc. - AMGN - close: 64.93 chg: -0.04 stop: 67.55 *new*

AMGN tried to bounce on Friday but shares ended up producing a new lower high. We only have about three weeks left before AMGN is expected to report earnings. If you are considering new bearish positions here you may want to use a tighter stop loss and aim for the $60.00 region. We are going to lower our stop to $67.55, just above the descending 50-dma. Currently our target is the $62.65-62.25 range although the P&F chart points to a $60 target. AMGN is due to present at another conference on Tuesday this week. That always increases the risk of some sort of news event moving the stock.

Suggested Options:
We're not suggesting new plays at this time. We do not want to hold over the mid July earnings report.

Picked on June 05 at $ 67.48
Change since picked: - 2.55
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 8.9 million

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Carpenter Tech. - CRS - close: 104.79 chg: +1.75 stop: 105.01

We are still in a wait-and-see mode with CRS. The stock, like most of the market, churned sideways last week. CRS' range was between $100 and $105.50. Some of the technical indicators on the daily chart are suggesting the next move may be higher. If that is the case then aggressive traders might want to consider buying calls on a move past $107.50 or $110 although we would expect some resistance at the 50-dma near $115 and then more resistance near $120. Currently the P&F chart is still bearish and points to a $76 target. Since we don't have a bullish market outlook we're going to keep CRS on the list as a put candidate with a trigger to buy puts at $99.25.

Suggested Options:
We are not suggesting new plays at this time. If triggered at $99.25 then we'd suggest the July or August puts. We do not want to hold over the July earnings report.

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/24/06 (unconfirmed)
Average Daily Volume = 651 thousand

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Digital River - DRIV - cls: 40.56 change: -0.85 stop: 42.05

This looks like a new entry point to buy puts on DRIV. The stock produced another failed rally under the $42.00 level on Friday. Volume came in below average. We would probably wait for a move under the 10-dma and the $40.00 level before actually initiating new put plays here. Our target is the $35.25-35.00 range. The Point & Figure chart points to a $26 target.

Suggested Options:
We are suggesting the July and August puts but we want to exit ahead of the July earnings report. July options expire in four weeks.

BUY PUT JUL 40.00 DQI-SH open interest=2462 current ask $1.50
BUY PUT JUL 35.00 DQI-SG open interest=1792 current ask $0.35

BUY PUT AUG 40.00 DQI-TH open interest=1292 current ask $2.55
BUY PUT AUG 35.00 DQI-TG open interest= 176 current ask $0.95

Picked on June 19 at $ 39.45
Change since picked: + 1.11
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 1.0 million

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Express Scripts - ESRX - cls: 67.27 chg: +1.47 stop: 70.10

ESRX is another stock that has consolidated sideways over the past week. It's worth noting that since shares were already a little oversold the sideways trading is pulling the technical indicators toward new bullish signals. Overall we remain bearish as long as ESRX remains under broken support, new resistance at the $70.00 level. Our conservative target at $65.25 was hit days ago and now we're aiming for the $60.50 mark. The Point & Figure chart points to a $52 target.

Suggested Options:
We are not suggesting new plays at this time. Our plan is to exit ahead of the July earnings report.

Picked on June 08 at $ 69.59
Change since picked: - 2.32
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 1.8 million

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Group 1 Auto - GPI - close: 54.26 chg: +0.99 stop: 58.46

We are not suggesting new plays with GPI. Instead for the last few sessions we've been suggesting that traders lock in profits before the stock produces an oversold bounce. It looks like that oversold bounce may have begun on Friday. Shares of GPI added 1.85% but the bounce did struggle wit resistance near $55.00. If you're not willing to endure a rebound to potential resistance in the $57.00-58.00 region then consider exiting now for a gain. Our target is the $51.50-50.00 range.

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

Picked on June 11 at $ 58.46
Change since picked: - 4.20
Earnings Date 08/01/06 (unconfirmed)
Average Daily Volume = 498 thousand

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Intl. Bus. Mach. - IBM - cls: 77.10 chg: -0.09 stop: 80.05

IBM continues to flirt with a breakdown under support in the $76.75-77.00 range. As long as the stock continues to trade under its current six-week trendline of lower highs we're going to remain bearish. Our target is the $73.50-73.00 range. Please note that we will be running into a time crunch soon. We don't want to hold over the mid-July earnings report expected in about three weeks.

Suggested Options:
Until we see a new relative low we'd probably hesitate to open new put plays.

Picked on June 06 at $ 78.75
Change since picked: - 1.65
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 5.2 million

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IDEXX Labs - IDXX - close: 75.12 chg: +0.98 stop: 78.05

Friday saw IDXX produce an oversold bounce following Thursday's breakdown. The stock has reclaimed the $75 level and its 200-dma(s). We would expect the bounce to hit its 10-dma near $76 before failing. Our conservative target at $75.25 has already been hit. Now we're aiming for the $72.00 level.

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

Picked on June 12 at $ 77.95
Change since picked: - 2.83
Earnings Date 07/28/06 (unconfirmed)
Average Daily Volume = 144 thousand

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Oshkosh Truck - OSK - close: 49.15 chg: +0.30 stop: 51.51

OSK is another stock that spent last week consolidating sideways with the major averages. However, what makes OSK different is that the consolidation had a bearish tone to it with a failed rally near $50 and its 200-dma. We remain bearish but traders looking for new positions might want to wait for a drop under $48.00 before initiating plays. Our target is the $45.50-45.00 range. The P&F chart points to a $34 target. In the news OSK announced it would purchase AK Specialty Vehicles for $140 million from HealthTronics (HTRN).

Suggested Options:
We're not suggesting new plays at this time.

Picked on June 13 at $ 49.49
Change since picked: - 0.34
Earnings Date 08/01/06 (unconfirmed)
Average Daily Volume = 737 thousand
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

Intuitive Surgical - ISRG - cls: 107.51 chg: +2.89 stop: 108.25

We have been stopped out of ISRG at $108.25. We warned readers that this was an aggressive plays and that shares were volatile. It looks like the recent breakdown under its 200-dma and the $100 level was nothing but a bear trap (and a bounce from its P&F chart support). The weekly chart now has a bullish-reversal candlestick. Traders might want to switch directions and buy calls if ISRG can trade over $110 or its 50-dma near $113.00.

Picked on June 19 at $102.45
Change since picked: + 5.06
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Supertex - SUPX - close: 36.62 change: +0.25 stop: 37.05

The SOX semiconductor index is still stuck inside its seven-week bearish channel. Meanwhile shares of SUPX are still consolidating between $35.00 and its 200-dma near $37.00. Unfortunately, the intraday rally on Friday in SUPX hit $37.19 and the night before we had lowered our stop loss to $37.05 to reduce our risk. The stock continues to look bearish. We would still consider put positions here or on a breakdown below the $35.00 level.

Picked on June 19 at $ 35.99
Change since picked: + 0.63
Earnings Date 08/03/06 (unconfirmed)
Average Daily Volume = 263 thousand
 

Dropped Strangles

None
 

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