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Call Updates

Dominion - D - close: 75.78 change: +0.17 stop: 74.49

Our new bullish call play in D has been opened. The stock traded above resistance at $76.00 on an intraday basis and hit our trigger to buy calls at $76.05 opening the play. The move over $76.00 has produced a new double-top breakout buy signal on the Point & Figure chart that now points to an $87 target. Please note that we are NOT suggesting new plays with shares of D under $76.00. Wait for a new rise above this level before considering new call positions. Our target is the $81.00-82.00 range although more conservative types may want to exit near $80.00. Please note that we do not want to hold over D's early August earnings report.

Picked on July 17 at $ 76.05
Change since picked: - 0.27
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 1.5 million

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EOG Resources - EOG - close: 67.45 change: -2.70 stop: 69.90

We are still on the sidelines with EOG. Our plan is to buy calls if shares trade at $72.55 or higher. More aggressive traders might want to consider an early entry on a move over $71.00 and/or its 200-dma. If this sell-off in oil stocks continues then traders may want to consider switching directions and buying puts if EOG trades under potential support near $65.00 and its simple 50-dma. For more details see our weekend play description on EOG.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/01/06 (confirmed)
Average Daily Volume = 3.5 million

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Fortune Brands - FO - close: 70.55 change: -0.28 stop: 69.74

Lack of a real oversold bounce in the markets today is bad news. More conservative traders may want to exit early with this bullish play on FO before we're stopped out at $69.74. We're going to stock it out since the stock has not yet violated support at the $70.00 level yet. We are not suggesting new positions.

Picked on July 06 at $ 71.30
Change since picked: - 0.75
Earnings Date 07/21/06 (unconfirmed)
Average Daily Volume = 674 thousand

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Reynolds American - RAI - close: 119.82 chg: +0.38 stop: 117.45

Our new call play in RAI is now open. Investors may be moving money into RAI since the stock can be seen as a "safe haven" play. The stock provides a strong dividend and its product is seen as recession proof. The early July legal victory for the tobacco industry also removes an overhang above shares of RAI. The move over $120.00 and our trigger to buy calls at $120.20 has opened the play. Unfortunately, RAI failed to hold most of its gains. We are NOT suggesting new bullish positions with RAI under the $120.00 mark. Now that the play is open our target is the $124.50-125.00 range. We have a limited amount of time for this play to work since we plan to exit ahead of the late July earnings report.

Picked on July 17 at $120.20
Change since picked: - 0.38
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 636 thousand
 

Put Updates

Alcon Inc. - ACL - close: 94.68 chg: -1.05 stop: 100.05

It looks like Friday's session may have just been a pause for the bears to catch their breath. ACL lost more than 1% on Monday and is nearing the April low near $94.44. We are suggesting that traders open put plays with ACL under $98.00. More conservative traders might want to wait for a decline under $95.00 or the late April low near $94.44 before initiating positions. We're suggesting two targets. Our conservative target is the $90.50 mark. Our aggressive target is the $87.00-85.00 range. We do not want to hold over the July 24th earnings report so we don't have a lot of time.

Picked on July 13 at $ 95.61
Change since picked: - 0.93
Earnings Date 07/24/06 (confirmed)
Average Daily Volume = 805 thousand

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Air Products Chem. - APD - close: 61.51 chg: -0.44 stop: 65.01

Shares of APD have now closed under potential technical support at its simple 200-dma. We don't see any other changes from our weekend update. 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: - 1.44
Earnings Date 07/26/06 (confirmed)
Average Daily Volume = 1.2 million

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Apollo Group - APOL - close: 48.84 chg: +0.54 stop: 52.01

APOL produced a bit of an oversold bounce today but as long as APOL remains under $50.00 we're going to stay short-term bearish. A failed rally under $50 and its 10-dma could be used as a new entry point for puts. Our target is the $45.50-45.00 range. The P&F chart points to a $40.00 target. FYI: More conservative traders might want to consider tightening their stop loss (maybe around $51).

Picked on July 09 at $ 49.92
Change since picked: - 1.08
Earnings Date 09/19/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Cardinal Health - CAH - cls: 63.20 chg: +0.40 stop: 65.25

There is no change from our weekend new play description on CAH. Our trigger to buy puts is at $62.25, under the recent support. If triggered then we'll target a decline into the $57.75-57.00 range. More aggressive traders might want to aim for the $55 region. The P&F chart points toward $40. We do not want to hold over the early August earnings report.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 1.6 million

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Caterpillar - CAT - close: 69.19 chg: -0.00 stop: 74.01

Shares of CAT tried to bounce today but the rally stalled near $70.00. The stock closed unchanged. We're down to the last three days for this play. The company is due to report earnings on the morning of Friday, July 21st. We do not want to hold over the report. Our target is the $67.50-66.50 range, which is just above the rising, simple 200-dma. Readers should be prepared for a bounce in CAT if the DJIA bounces from its June low.

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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Express Scripts - ESRX - cls: 70.67 chg: +0.82 stop: 71.51

Be extra careful here. ESRX spiked lower this morning and hit our trigger to buy puts at $69.30. Unfortunately, the stock quickly bounced after hitting our trigger and closed back above the $70.00 level. The play is now open but we are not suggesting new put plays with the stock above $70.00. Look for a new decline under $69.75 or $69.25 before initiating new positions. Our target is the $64.50-64.00 range. We do not want to hold over the July 26th earnings report.

Picked on July 17 at $ 69.30
Change since picked: + 1.37
Earnings Date 07/26/06 (confirmed)
Average Daily Volume = 2.0 million

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IDEXX Labs - IDXX - close: 73.06 chg: +0.24 stop: 76.51

We want to repeat our previous suggestion that traders consider locking in a profit now. The BTK biotech index lost 0.8% today but IDXX out performed its peers with a minor, oversold bounce on Monday. We're not suggesting new positions. Our conservative target at $75.25 has already been hit and we're aiming for the $72.00 level.

Picked on June 12 at $ 77.95
Change since picked: - 4.91
Earnings Date 07/28/06 (unconfirmed)
Average Daily Volume = 144 thousand

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Jacobs Engineering - JEC - cls: 71.88 chg: -1.87 stop: 77.55

JEC continues to show weakness and the stock lost 2.5% on Monday closing near its lows for the session, which is typically bearish for the following open. The P&F chart now points to a $63 target. Our target is the $69.00 level near the June lows. More conservative traders may want to exit at $70 while aggressive traders may want to aim lower. Bear in mind that we do not want to hold over the July 25th earnings report so we only have five trading days.

Picked on July 16 at $ 73.75
Change since picked: - 1.87
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 583 thousand

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Whole Foods - WFMI - close: 58.92 chg: +0.53 stop: 63.01

Over the weekend we told readers to watch for a bounce and failed rally under $60 or $61. It looks like WFMI may be providing that failed rally under $60. Shares hit $59.75 before paring its gains this afternoon. Readers can open new put positions here but we would be careful and probably hesitate about opening new plays if the major averages turn positive again tomorrow. 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: - 2.28
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: 20.72 change: -0.48 stop: n/a

The homebuilders continued to sink on Monday. The DJUSHB index fell 0.99% while DHI lost another 2.2% on strong volume. We are aiming for an exit at $2.55. The high for the put side of our strangle was $2.30 on Monday. Our estimated cost was about $1.70. We're still planning to exit if either options rises to $2.55 or more. We're not suggesting new strangle plays. The options in our strangle are the August $25 call (DHI-HE) and the August $22.50 put (DHI-TX). Don't forget that DHI is expected to report earnings on Thursday, July 20th and we do plan on holding over the report.

Picked on July 09 at $ 23.90
Change since picked: - 3.18
Earnings Date 07/20/06 (confirmed)
Average Daily Volume = 3.7 million
 

Dropped Calls

Baker Hughes - BHI - close: 79.27 change: +4.38 stop: 79.75

Oil stocks, and specifically oil-service stocks, were clobbered today following a 2.3% pull back in crude oil futures toward $75 a barrel. Honestly, we don't see why oil stocks sold off today. This conflict with Israel is not going to end soon and neither is the ongoing drama with Iran and N. Korea. However, the "market" is always right and traders decided to sell oil stocks today. Next time we'll use a trigger. More conservative traders, if they took our suggestion to wait for a move over $84.00, would still be on the sidelines. If you opened new plays this morning then we would have been stopped out at $79.75.

Picked on July 16 at $ 83.65
Change since picked: - 4.38
Earnings Date 07/28/06 (confirmed)
Average Daily Volume = 4.3 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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