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Call Updates

Bear Stearns - BSC - cls: 139.50 chg: +0.27 stop: 134.95

BSC held up pretty well during Monday's session. The stock managed a minor bounce from the simple 10-dma. We're still worried about the market's next move and would expect BSC to test the $136.50 or $135.00 level. If you don't want to endure that kind of pull back consider exiting early right now! Our target is the $144.50-147.50 range. The P&F chart is still bullish with a $184 target.

Picked on June 29 at $137.51
Change since picked: + 1.99
Earnings Date 09/14/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Fortune Brands - FO - close: 72.37 change: +0.74 stop: 69.74

FO continues to show relative strength. The stock added another 1% and closed over potential resistance at the $72.00 level. We're still aiming for the $74.00 mark but we might have to adjust it lower as the 50-dma falls. We're concerned the 50-dma may be overhead resistance. We do not want to hold over the July earnings report (21st - unconfirmed). FYI: more aggressive traders may want to use a wider stop like under Wednesday's low.

Picked on July 06 at $ 71.30
Change since picked: + 1.07
Earnings Date 07/21/06 (unconfirmed)
Average Daily Volume = 674 thousand

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Google - GOOG - close: 418.00 chg: - 2.45 stop: 399.00

GOOG received some positive analyst comments about its earnings estimates but that failed to stop the stock from seeing some minor profit taking. The upward momentum is starting to struggle a bit and shares dipped to and closed near its rising 10-dma. More conservative traders might want to lock in some profits right here! There is potential resistance in the $425-430 region with its trendline of lower highs. We are aiming for the $440 level.

Picked on June 21 at $401.00
Change since picked: +17.00
Earnings Date 07/20/06 (confirmed)
Average Daily Volume = 9.8 million

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Komag Inc. - KOMG - close: 45.33 change: -1.50 stop: 44.49

Technology stocks, specifically hardware stocks, were hammered today thanks to an earnings warning from EMC. The GHA hardware index lost 2.4%. Shares of KOMG lost 3.2% but on below average volume if it's any consolation. We warned readers over the weekend that we expected KOMG to dip the $45.00 level. A bounce from the 10-dma (45.21) or the $45.00 mark could be used as a new entry point. More conservative traders might want to tighten their stops toward $45.00.

Picked on July 06 at $ 47.54
Change since picked: - 2.21
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Union Pacific - UNP - close: 90.36 chg: +0.24 stop: 88.49

Bulls bought the dip in UNP this afternoon. The stock closed higher and the rebound back above the $90.00 mark might look like a new bullish entry point to buy calls. However, we're still concerned about weakness in the major indices and the transportation index. Our readers might want to wait for a move over $91.00 before considering new plays. Currently our target is the $96.00-97.00 range.

Picked on June 29 at $ 91.54
Change since picked: - 1.18
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 1.6 million
 

Put Updates

Apple Computer - AAPL - close: 54.96 chg: -0.44 stop: 58.55*new*

AAPL lost 0.79% and closed under the $55.00 level for the first time since last October. The daily chart's MACD indicator has produced a new sell signal today. The P&F chart remains bearish with a $44 target. We are targeting a decline into the $50.50-50.00 range. Please note that we're lowering our stop loss to $58.55.

Picked on June 28 at $ 56.85
Change since picked: - 1.89
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 33.1 million

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Air Products Chem. - APD - close: 63.29 chg: +0.34 stop: 65.01

APD produced a bit of an oversold bounce today in spite of news that one analyst firm lowered their earnings estimates for the company. Readers can use a failed rally under $64.00 or the 50-dma (64.44) as a new entry point to buy puts. Our short-term target is the $59.00-58.00 range. It's short-term because we do not want to hold over the late July earnings report.

Picked on July 09 at $ 62.95
Change since picked: + 0.34
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Apollo Group - APOL - close: 50.12 chg: +0.20 stop: 52.51

We don't see any changes from our weekend play description for APOL. The stock did produce a minor bounce but the rally failed twice under the $50.60 level. More conservative traders might want to wait for a new relative low (49.79) before initiating new put positions. The P&F chart is bearish and points to a $44 target. We are suggesting put options with APOL under $50.00 although more aggressive traders might want to consider a failed rally under $51.00 as a new entry point. We do expect some support near the $47.50 region (around the March lows) but our target is the $45.50-45.00 range.

Picked on July 09 at $ 49.92
Change since picked: + 0.20
Earnings Date 09/19/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Digital River - DRIV - cls: 40.14 change: +0.02 stop: 42.05

DRIV dropped to a new one-week low but a late day bounce pushed it back into the green. The move under $39.50 midday looked like a new entry point but we remain cautious given the bounce and would not suggest new plays at this time. We're aiming for a drop into the $35.25-35.00 range, which is under the simple 200-dma. We do not want to hold over the late July earnings report.

Picked on June 19 at $ 39.45
Change since picked: + 0.69
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 1.0 million

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Intl. Bus. Mach. - IBM - cls: 76.67 chg: +0.25 stop: 78.75

IBM spent most of the day trading sideways. There was an afternoon dip to a new relative low but someone decided to buy the dip and IBM closed in the green. We're surprised the stock was not weaker. UBS lowered their earnings estimates and price target on IBM this morning. We do not want to hold over the report and that doesn't give us a lot of time so we're not suggesting new plays right now. Currently our target is the $73.50 level. More aggressive traders might want to aim lower in the $72-70 region.

Picked on June 06 at $ 78.75
Change since picked: - 2.08
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 5.2 million

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IDEXX Labs - IDXX - close: 73.85 chg: -0.85 stop: 77.51

IDXX is sinking again. Shares lost 1.1% and closed under what has been minor support at the $74.00 level. More conservative traders may want to think about locking in some profits here. Our conservative target at $75.25 has already been hit and we're now aiming for the $72.00 level. Currently the Point & Figure chart points to a $64 target.

Picked on June 12 at $ 77.95
Change since picked: - 4.10
Earnings Date 07/28/06 (unconfirmed)
Average Daily Volume = 144 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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D.R.Horton - DHI - close: 23.50 change: -0.40 stop: n/a

Shares of DHI bounced around our suggested entry range this morning (23.75-24.25) before finally sinking lower. We think it's worth noting that volume was pretty low on the session. We're also surprised that DHI did not see more weakness after KBH and Dominion homebuilders said that the market continues to soften with more cancellations and weaker orders. We don't care which way DHI moves as long as it moves far enough before August expiration. Our estimated cost was about $1.70. Right now we're planning to exit if either option rises to $2.55 or more. The options in our strangle are the August $25 call (DHI-HE) and the August $22.50 put (DHI-TX).

Picked on July 09 at $ 23.90
Change since picked: - 0.40
Earnings Date 07/20/06 (confirmed)
Average Daily Volume = 3.7 million

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KB Home - KBH - close: 45.12 change: -0.64 stop: n/a

Is all the bad news already price into the homebuilders? KBH and Dominion released statements today saying that they continued to see weak trends with higher cancellations and a slow down in new orders. Yet shares of KBH only lost 1.39% and on very low volume. Normally a confession like that would see a much bigger reaction. The stock is still inside our suggested entry range ($44.00-46.00) to open strangle plays. Our estimated cost was about $1.45. The options we suggested were the August $50 call (KBH-HJ) and the August $40 put (KBH-TH). We would like to exit if either option rises to $2.45 or more.

Picked on July 09 at $ 45.76
Change since picked: - 0.64
Earnings Date 09/14/06 (unconfirmed)
Average Daily Volume = 2.4 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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