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Call Updates

Cytec - CYT - close: 53.41 change: -1.53 stop: 52.45

Biotechs under performed the market today and CYT was a big under performer with a 2.78% pull back. It looks like investors took a dim view of CYT's news today. The company announced that it has agreed to buy out its partner Royal DSM in their joint venture for American Melamine Industries. CYT said the move will not affect earnings so the move in the stock price today may be an overreaction. We are still on the sidelines. Our strategy suggests that traders wait for a breakout over $55 and use a trigger to buy calls at $55.11. If triggered our target is the $59.00-60.00 range. We do expect to see some resistance near $57.50 so expect a pull back but broken resistance at $55 should become new support.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/20/06 (confirmed)
Average Daily Volume = 313 thousand

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Dominion - D - close: 78.48 change: -0.12 stop: 75.75

Dominion didn't make much progress today. The stock churned sideways above the $78 level. We are running low on time. The company is due to report earnings on August 3rd and we do not want to hold over the announcement. Right now we're planning to exit on Wednesday afternoon at the closing bell. More conservative traders may want to exit early as D could easily dip toward the 10-dma near $77.60. Our target is the $81.00-82.00 range

Picked on July 17 at $ 76.05
Change since picked: + 2.43
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 1.5 million

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Femsa Fomento - FMX - close: 87.80 chg: -0.10 stop: 85.85

The rebound in shares of FMX definitely stalled on Monday. The stock traded in a relatively narrow $1.00 range for most of the day. We suspect that FMX will eventually breakout over the $90 level. If shares can trade over $90.00 it would produce a new quadruple-top breakout buy signal on the P&F chart. We're going to suggest a trigger to buy calls at $90.05. More conservative traders may want to use a trigger at $90.25 or $90.50 just to see little more confirmation. If triggered our target will be the $97.00-100.00 range. Our time frame is four to six weeks.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/28/06 (confirmed)
Average Daily Volume = 524 thousand

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Goldman Sachs - GS - close: 152.75 chg: +1.03 stop: 144.95

Shares of GS displayed some relative strength on Monday. The stock broke out over technical resistance at its 100-dma and tagged a new eight-week high. We don't see any changes from our weekend update. If you're looking for a new entry point consider waiting for a dip toward the $150 level. Our conservative target is the $154.00 level. Our aggressive target is at $157.50. We'd suggest that readers exit a majority of their position at $154 and only keep a small play open for the $157.50 level.

Picked on July 25 at $148.05
Change since picked: + 4.70
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 5.2 million

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Ipsco - IPS - close: 94.11 change: +1.14 stop: 88.45

Our new call play in IPS is off to a decent start. The stock added another 1.22% on Monday. We would have liked to have seen more volume on the move but we're not going to complain. Stronger volume tends to suggest more strength behind a move. At this time we don't see any changes from our weekend play description. We do see potential resistance at the 100-dma (currently near $97.50) and its trendline of lower highs (around $100). Therefore we're going to target a run into the $97.00-100.00 range. The P&F chart is bullish and points to a $108 target.

Picked on July 30 at $ 92.97
Change since picked: + 1.14
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 674 thousand

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Petroleo.Brasiliero - PBR - cls: 91.88 chg: -0.84 stop: 87.49

Oil stocks trended higher today following a 1% gain in crude futures but shares of PBR took a breather. The stock churned sideways in a relatively narrow range. Don't be surprised to see a dip towards $90.00, which as broken resistance should act as new support. A bounce from or dip to $90 could be used as a new entry point to buy calls. Our target is the $99.50-100.00 range. We do not want to hold over the mid-August earnings report.

Picked on July 30 at $ 92.72
Change since picked: - 0.84
Earnings Date 08/11/06 (unconfirmed)
Average Daily Volume = 3.4 million

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The Houston Exp. - THX - cls: 63.86 chg: +0.34 stop: 59.99

THX is another oil stock that inched higher today. The MACD on the daily chart produced a new buy signal. Unfortunately, we're running out of time. THX is expected to report earnings on Thursday, August 3rd. We're planning to exit on Wednesday at the closing bell to avoid the earnings announcement. Our target is the $67.50-70.00 range.

Picked on July 25 at $ 62.60
Change since picked: + 1.26
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 667 thousand
 

Put Updates

Apollo Group - APOL - close: 47.32 chg: +0.07 stop: 50.05

APOL is still flirting with short-term technical resistance at its descending 10-dma. We do not see any changes from our weekend update at this time. We are not suggesting new put plays at this time. While we are going to leave our stop loss at $50.05 more conservative traders may want to adjust theirs toward the $48.50-48.25 region to reduce their risk. The 10-dma is near $47.55. Our target is the $45.50-45.00 range.

Picked on July 09 at $ 49.92
Change since picked: - 2.60
Earnings Date 09/19/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Chicago Merc. - CME - close: 461.20 change: + 7.70 stop: n/a

Alert! Today's move in CME is very bad news for the bears. The stock managed to breakout over the $460 level and its simple 50-dma and 100-dma. The MACD indicator on the daily chart is now suggesting a new buy signal soon. If you were thinking about an early exit this would probably be it. We're not closing the play since it was a high-risk, speculative gamble and we're going to wait out the next three weeks.

Picked on July 23 at $452.00
Change since picked: + 9.20
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 680 thousand

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Itron - ITRI - close: 46.54 chg: -5.04 stop: 50.55 *new*

We thought ITRI looked ready to move lower but we were hoping for a better entry point. The stock gapped down this morning to open at $48.01. Shares closed with a 9.77% loss as investors showed their disappointment with the company's announcement to sell $300 million in convertible notes. It was our plan to buy puts on a breakdown under $50 with a trigger to open positions at $49.75. Unfortunately, the gap down today put our entry at $48.01. Now we're at risk for an oversold bounce and "fill the gap" type of move so we're not suggesting new positions at this time. Our target is the $45.10-45.00 range but more aggressive traders may want to aim lower. Please note we're adjusting the stop loss to $50.55.

Picked on July 31 at $ 48.01 *gap lower*
Change since picked: - 1.47
Earnings Date 07/26/06 (confirmed)
Average Daily Volume = 424 thousand

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Manpower Inc. - MAN - close: 59.48 chg: -0.91 stop: 62.25

Shares of MAN gapped open lower this morning. The stock was reacting to a downgrade from Merrill Lynch who reduced their rating from a "buy" to a "neutral". We are still not suggesting new put positions at this time. Currently our target is the $55.50-55.00 range. We suspect that the simple 200-dma near $55.00 will offer technical support. FYI: The P&F chart points to a $48 target.

Picked on July 20 at $ 59.42
Change since picked: + 0.06
Earnings Date 07/19/06 (confirmed)
Average Daily Volume = 1.0 million

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Union Pacific - UNP - close: 85.00 chg: -0.22 stop: 86.26

The transportation sector, including the railroads, were lower today presumably on the rise in crude oil. We don't see any changes from our weekend update on UNP and bears are still in danger here. The technical picture is turning more bullish. We're not suggesting new plays at this time. Our target is the $80.10-77.65 range.

Picked on July 21 at $ 83.75
Change since picked: + 1.25
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: 47.30 change: -0.53 stop: n/a

BOL is inching closer to a breakdown under support at the $47.00 level. We do not see any changes from our weekend update. We're not suggesting new plays. More conservative traders may want to just cut their losses right here. Our estimated cost on the strangle was $2.15. If you could sell today the options would go for about $1.55. We're keeping the play open but bear in mind that August options are due to expire in there weeks. Our goal will be to sell if either option rises to $3.25 or more. 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: - 0.10
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.2 million

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L-3 Comm. - LLL - close: 73.65 chg: -0.90 stop: n/a

LLL lost 1.2% on Monday and the MACD on its daily chart is nearing a new sell signal. We're not suggesting new strangle plays 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: - 1.61
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 1.2 million

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3M Co. - MMM - close: 70.40 change: -0.12 stop: n/a

There is still no change from our previous updates on MMM. The stock continues to hover around support at the $70.00 level. There are only three weeks left before August options expire. Due to our time crunch we're not suggesting new 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: - 0.32
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 3.7 million
 

Dropped Calls

EOG Resources - EOG - close: 74.15 chg: +2.09 stop: 69.59

Oil stocks continued to rally following an up tick in crude oil prices. It is our plan to exit this Monday at the closing bell to avoid holding over EOG's earnings report, which is expected tomorrow morning. Wall Street will be looking for earnings of $1.07 a share.

Picked on July 26 at $ 71.01
Change since picked: + 3.14
Earnings Date 08/01/06 (confirmed)
Average Daily Volume = 3.6 million
 

Dropped Puts

None
 

Dropped Strangles

Phelps Dodge - PD - close: 87.34 change: +5.84 stop: n/a

Target achieved. Shares of PD soared today with a 7.1% gain on big volume after Prudential upgraded the stock. There was also talk of PD being a potential takeover target. Our estimated cost for the strangle was at $2.15. Our goal was to exit if either option hit $3.15 or more. The call side, with the August $85 calls (DPB-HQ), hit an intraday high of $5.60 and is trading at $4.50bid/$4.80ask.

Picked on July 23 at $ 77.20
Change since picked: +10.14
Earnings Date 07/26/06 (confirmed)
Average Daily Volume = 7.8 million
 

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