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Call Updates

Dominion - D - close: 78.23 change: -0.43 stop: 74.99

Shares of D continued to rally this morning and hit an intraday high of $79.65 before reversing course and closing in the red. This does look like a short-term bearish reversal and we'd expect a pull back toward the rising 10-dma, currently near $77.00. If you're looking for a new bullish entry point to buy calls consider waiting for a bounce from the 10-dma. 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: + 2.18
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 1.5 million

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EOG Resources - EOG - close: 70.62 chg: -1.21 stop: 67.49

Oil stocks were stronger this morning as investors reacted to XOM's record breaking earnings but the rally faded. Shares of EOG traded to $72.61 and then turned south. The close under the 200-dma is negative for the bulls. While we would like to see the $70.00 level hold as short-term, round-number support we would not be surprised to see a dip toward the simple 10-dma near $68.50-68.25. Our target is the $77.50 level but readers should bear in mind that we plan to exit on Monday afternoon (July 31st) to avoid holding over the company's earnings report on Tuesday.

Picked on July 26 at $ 71.01
Change since picked: - 0.39
Earnings Date 08/01/06 (confirmed)
Average Daily Volume = 3.6 million

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General Dynamics - GD - cls: 68.12 chg: +0.13 stop: 67.45

GD spent the session trading sideways but it's worth noting that the MACD indicator on the daily chart is turning bearish. We're going to keep GD as a bullish candidate for the moment but we'd drop it GD closes under Tuesday's low. Our strategy involves a trigger to buy calls at $70.05 to catch a bullish breakout over resistance at the $70.00 level. If triggered our target is the $74.50-75.00 range. The P&F chart for GD already points to a $75 target.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/19/06 (confirmed)
Average Daily Volume = 1.5 million

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Goldman Sachs - GS - close: 148.26 chg: +0.88 stop: 141.79

The broker-dealer stocks were one of the few sectors to close in the green today. The XBD index added just over 1% while GS closed with a 0.59% gain. More importantly for us GS closed back above its simple 50-dma but more conservative traders may still want to wait for a move over $150 before initiating positions. The $150 mark is holding as short-term resistance. Our target is the $154.00-155.00 range.

Picked on July 25 at $148.05
Change since picked: + 0.21
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 5.2 million

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The Houston Exp. - THX - cls: 63.27 chg: -0.05 stop: 59.99

Shares of THX displayed relative strength today by limiting its losses to just 5 cents. Most of the oil stocks experienced stronger profit taking following a morning spike higher. We remain bullish and would consider new call positions here but a dip back toward $62.00-62.25 might be a more attractive entry point. Our target is the $67.50-70.00 range. We do not want to hold over the early August earnings report. FYI: The Point & Figure chart is bullish and points to a $76 target.

Picked on July 25 at $ 62.60
Change since picked: + 0.67
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 667 thousand
 

Put Updates

Apollo Group - APOL - close: 46.20 chg: -0.43 stop: 50.05

APOL produced yet another failed rally at its falling 10-dma today. This would look like another entry point for puts but shares are quickly approaching our target in the $45.50-45.00 range so we're not suggesting new positions. More conservative traders may want to consider tightening their stops into the $49.00-48.50 region.

Picked on July 09 at $ 49.92
Change since picked: - 3.72
Earnings Date 09/19/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Chicago Merc. - CME - close: 445.00 change: - 4.66 stop: n/a

CME continues to show weakness. Today's 1% decline put the stock at a new one-month low and more importantly under Tuesday's intraday low. Short-term technicals definitely look bearish. We're not suggesting new put plays but aggressive traders might want to consider positions on a drop below Tuesday's low ($446). Currently we're aiming for a decline into the $420-400 range.

Picked on July 23 at $452.00
Change since picked: - 6.66
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 680 thousand

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Manpower Inc. - MAN - close: 59.12 chg: -0.14 stop: 62.25

We don't see any changes from our previous update on MAN. The stock continues to look bearish although today's session was mostly sideways. It will be interesting to see how shares react to tomorrow's GDP report. Our target is the $55.50-55.00 range. We suspect that the simple 200-dma near $55.00 will offer technical support.

Picked on July 20 at $ 59.42
Change since picked: - 0.30
Earnings Date 07/19/06 (confirmed)
Average Daily Volume = 1.0 million

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Union Pacific - UNP - close: 83.77 chg: +0.67 stop: 87.01

The railroad index was one of the few sectors to close higher today. The move was powered by a big 4.5% oversold bounce in shares of NSC today. UNP didn't see that strong of a bounce and shares of UNP remain under resistance at the $85.00 level and its 10-dma and 200-dma. We have two targets. Our conservative target is $80.10. Our more aggressive target is the $77.65 level.

Picked on July 21 at $ 83.75
Change since picked: - 0.65
Earnings Date 07/20/06 (confirmed)
Average Daily Volume = 1.7 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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Bausch Lomb - BOL - close: 47.43 change: -1.09 stop: n/a

There are no changes from our previous update on BOL except that we are not suggesting new strangle positions at this time. There is still no news on the company's next earnings date. Our estimated cost for the strangle was $2.15. Our goal will be to sell if either option rises to $3.25 or more. More aggressive traders may want to aim higher. The options in our suggested strangle are the August $50 call (BOL-HJ) and the August $45 put (BOL-TI).

Picked on July 23 at $ 47.40
Change since picked: + 0.03
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.2 million

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L-3 Comm. - LLL - close: 73.79 chg: -2.44 stop: n/a

LLL reported earnings this morning. The headline number beat analysts' estimates by 3 cents. Unfortunately, it looks like the company's guidance wasn't good enough and investors sold the news. The stock lost 3.2% on above average volume. We are not suggesting new strangle positions at this time. Our estimated cost for the strangle was $1.35. We will plan to sell if either option rises to $2.25 or more. The options in our LLL strangle are the August $80 call (LLL-HP) and the August $70 put (LLL-TN).

Picked on July 23 at $ 75.26
Change since picked: - 1.47
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 1.2 million

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3M Co. - MMM - close: 69.75 change: +0.69 stop: n/a

We are a little bit surprised by MMM's relative strength today but the stock is still struggling to close back above the $70 mark and its 10-dma. We are not suggesting new strangle plays at this time. Our estimated cost was $0.75. We are planning to exit if either options rises to $1.50 or more. The options in our strangle are the August 65 put (MMM-TM) and the August 75 call (MMM-HO).

Picked on July 23 at $ 70.72
Change since picked: - 0.97
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 3.7 million

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Phelps Dodge - PD - close: 78.08 change: +0.26 stop: n/a

PD continues to consolidate sideways with today's session producing a failed rally at its descending 50-dma. The more shares of PD coil the bigger we expect the breakout to be. Unfortunately, instead of earnings being the catalyst for any move it looks like investors are waiting on news for PD's attempted acquisition of Inco (N). We are not suggesting new plays at this time. Our estimated cost for the strangle was at $2.15. We're planning to sell if either option rises to $3.15 or more. The options in our strangle are the August $85 call (DPB-HQ) and the August $70 put (PT-TN).

Picked on July 23 at $ 77.20
Change since picked: + 0.88
Earnings Date 07/26/06 (confirmed)
Average Daily Volume = 7.8 million
 

Dropped Calls

None
 

Dropped Puts

IDEXX Labs - IDXX - close: 75.10 chg: -0.45 stop: 76.05

Time has finally run out. It was our plan to exit today at the closing bell to avoid holding over the company's earnings report expected tomorrow. Wall Street is looking for an earnings profit of 63 cents a share.

Picked on June 12 at $ 77.95
Change since picked: - 2.85
Earnings Date 07/28/06 (confirmed)
Average Daily Volume = 144 thousand
 

Dropped Strangles

None
 

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