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Call Updates

Fortune Brands - FO - close: 72.01 change: +0.01 stop: 69.74

Shares of FO are actually holding up pretty well during the market sell-off. We're a little surprised by the relative strength. However, we don't think the market weakness is over yet so we're not suggesting new bullish positions in FO. Really conservative traders might want to abandon bullish call plays in FO right now as a dip toward $70 is still a big possibility. Our target is the $74.00 level. We do not want to hold over the July earnings report (21st - unconfirmed).

Picked on July 06 at $ 71.30
Change since picked: + 0.71
Earnings Date 07/21/06 (unconfirmed)
Average Daily Volume = 674 thousand

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Investment Tech - ITG - close: 50.61 chg: -1.98 stop: 48.95

Brokerage and investment-related stocks continued to get crushed today. The XBD index lost 2.5%. Shares of ITG, which had been showing relative strength, hit some profit taking with a 3.7% decline. Given the market weakness we are not suggesting new bullish positions at this time. More conservative traders may want to think about exiting early or raising their stop loss. Our short-term target will be the $54.95-55.00 range.

Picked on July 11 at $ 51.00
Change since picked: - 0.39
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 700 thousand
 

Put Updates

Apple Computer - AAPL - close: 52.22 chg: -0.74 stop: 57.05*new*

AAPL gapped open lower this morning but managed an intraday rally back toward $54 before rolling over again. Volume came in pretty heavy today. We are adjusting our stop loss to $57.05. More conservative traders may want to think about doing some profit taking here but given the violence in the Middle East we suspect there is more market weakness ahead. We are targeting a decline into the $50.50-50.00 range.

Picked on June 28 at $ 56.85
Change since picked: - 3.89
Earnings Date 07/19/06 (unconfirmed)
Average Daily Volume = 33.1 million

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Air Products Chem. - APD - close: 62.42 chg: -1.50 stop: 65.01

The Tuesday-Wednesday trading in APD is now looking like a tweezer-top type of bearish reversal. Today's 2.3% decline is a nice follow through. The MACD on the daily chart is nearing a new sell signal. The next hurdle for the bears is potential support near $62.00 and its 200-dma. We would consider new put plays here (August puts). Remember we don't want to hold over the late July earnings report. Our target is the $59.00-58.00 range.

Picked on July 09 at $ 62.95
Change since picked: - 0.53
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Apollo Group - APOL - close: 49.07 chg: -0.40 stop: 52.01

APOL is still sinking but we expected the decline to be faster. Shares only lost 0.8% today, which means the stock fared a lot better than most of the market. The big headline for APOL today was news that the company is requesting a hearing to appeal its NASDAQ delisting notice. Our target is the $45.50-45.00 range.

Picked on July 09 at $ 49.92
Change since picked: - 0.85
Earnings Date 09/19/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Caterpillar - CAT - close: 69.70 chg: -1.61 stop: 74.01

The market sell-off and triple-digit decline in the DJIA helped pull CAT to a 2.2% loss today. The stock broke down under potential support at the $70.00 level. Plus, the MACD indicator on the daily chart has produced a new sell signal. Our target is the $67.50-66.50 range. We do not want to hold over the company's earnings report on July 21st so this will be a short-term play.

Picked on July 12 at $ 71.31
Change since picked: - 1.61
Earnings Date 07/21/06 (confirmed)
Average Daily Volume = 5.1 million

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Intl. Bus. Mach. - IBM - cls: 74.24 chg: -1.24 stop: 78.75

Prepare to exit. IBM lost another 1.6% to close at a new multi-month low. Volume on the session was pretty heavy and the MACD on the daily chart has produced a new sell signal. Our target is the $73.50 level but more conservative traders may want to exit early right here or near $74.00. More aggressive traders might want to aim lower in the $72-70 region.

Picked on June 06 at $ 78.75
Change since picked: - 4.43
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 5.2 million

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IDEXX Labs - IDXX - close: 72.71 chg: -0.43 stop: 77.01

There are no changes from our previous update. IDXX continues to sink. The stock is nearing our target at $72.00. More conservative traders may want to seriously consider exiting early right here.

Picked on June 12 at $ 77.95
Change since picked: - 5.28
Earnings Date 07/28/06 (unconfirmed)
Average Daily Volume = 144 thousand

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Sears Holding - SHLD - cls: 144.10 chg: -4.27 stop: 152.05*new*

The market sell-off was bad enough but rising violence in the Middle East sent oil to record highs near $77 a barrel. This puts more pressure on gas prices and more pressure on consumers at the pump. Adding insult to injury SHLD's major rival Wal-Mart (WMT) was downgraded today. The analyst was concerned about macro headwinds slowing sales. We are adjusting the stop loss to $152.05 although the $150.00 level looks like a good spot. Our target is the $142.00-140.00 range but more aggressive traders may want to aim lower. We're concerned about potential support at the 100-dma ($142) and the exponential 200-dma ($138.50).

Picked on July 12 at $148.37
Change since picked: - 4.27
Earnings Date 08/17/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Whole Foods - WFMI - close: 59.81 chg: -1.39 stop: 64.01

Technicals continue to worsen for WFMI and today's 2.2% decline helped produce a new sell signal on the daily chart's MACD indicator. The stock is currently testing the June low (near 59.40). Again the escalating violence with Israel, Hezbollah, and Iran puts pressure on oil and that in turn pressures the consumer, which should lead to slower sales for WFMI. We would not be surprised to see a bounce in WFMI here but the $61-62 region should be short-term overhead resistance. Our target is the $56.00-55.00 range. The P&F chart points to a $43 target. We do not want to hold over the late July earnings report.

Picked on July 12 at $ 61.20
Change since picked: - 1.39
Earnings Date 07/31/06 (confirmed)
Average Daily Volume = 1.4 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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D.R.Horton - DHI - close: 22.86 change: +0.03 stop: n/a

Given the market weakness and rising geo-political tensions we don't see any reason to be buying the homebuilders here so we can't explain the minor gain in DHI today. However, those who did buy the stock today will probably wish they hadn't. After the closing bell the company reported their Q3 sales orders (not their full earnings expected on July 20th) that came in less than a year ago. Plus, DHI issued an earnings warning for fiscal year 2006. The stock was trading near $20.00 in after hours in reaction to the news. 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: - 1.04
Earnings Date 07/20/06 (confirmed)
Average Daily Volume = 3.7 million

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KB Home - KBH - close: 41.67 change: -0.73 stop: n/a

KBH lost another 1.7% and closed under the June low. The MACD indicator on the daily chart is on the verge of a new sell signal. After hours rival builder DHI cut their earnings forecast for fiscal year 2006. This may be the reason that shares of KBH were trading near $40.00 in after hours markets. 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: - 4.09
Earnings Date 09/14/06 (unconfirmed)
Average Daily Volume = 2.4 million
 

Dropped Calls

Halliburton - HAL - close: 73.73 chg: -1.15 stop: 71.99

Crude oil is surging to new all-time highs with the new violence in the Middle East. However oil stocks and oil service stocks like HAL are not responding yet to the rally in oil prices. Shares of HAL never hit our trigger to buy calls at $76.05 so we're going to drop the stock as a candidate. We are still looking for potential bullish plays in the oil sector.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 7.9 million

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Rio Tinto - RTP - close: 203.90 chg: -7.24 stop: 205.90

We have been stopped out of RTP at $205.90. Another rise in gold futures, which saw a surge higher as a safe haven amid the Middle East turmoil, was not enough to fuel any buying in RTP and other mining stocks. If you look at the intraday chart for RTP you can see that shares consolidated sideways between 206.50 and $209.00 for most of the day before the final sell-off in the last couple of hours.

Picked on July 11 at $213.71
Change since picked: - 9.81
Earnings Date 08/03/06 (unconfirmed)
Average Daily Volume = 492 thousand
 

Dropped Puts

None
 

Dropped Strangles

None
 

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