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Call Updates

Petroleo.Brasiliero - PBR - cls: 94.62 chg: -0.07 stop: 89.49

Oil stocks are still churning sideways. The trend remains upward for PBR but the momentum is slowing. We are not suggesting new bullish positions at this time. The next move is looking like a dip towards the 10-dma - maybe lower. Broken resistance at $90.00 should offer some support. Please note that the only earnings date we have for PBR is August 11th but it is unconfirmed. To protect ourselves we're going to exit on Thursday afternoon at the close to avoid holding over any earnings announcement.

Picked on July 30 at $ 92.72
Change since picked: + 1.90
Earnings Date 08/11/06 (unconfirmed)
Average Daily Volume = 3.4 million
 

Put Updates

Apple Computer - AAPL - close: 63.59 chg: -1.19 stop: 70.01

Shares of AAPL appeared to confirm yesterday's breakdown under $65.00 and its 10-dma and 200-dma with another decline on above average volume. The move under $64.00 has produced a new P&F chart sell signal that points to a $58 target. Our short-term target is the $60.50-60.00 range. The top of the July gap near $59.70 could act as support. We don't see any changes from yesterday's play description.

Picked on August 08 at $ 64.78
Change since picked: - 1.19
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 28 million

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Autozone Inc. - AZO - close: 86.32 chg: -1.41 stop: 90.05

AZO continued lower on Wednesday following Tuesday's reversal. Shares fell 1.6% today although volume continues to come in below average. We don't see any changes from Tuesday's new play description. Our target is the $82.50-80.00 range.

Picked on August 08 at $ 87.73
Change since picked: - 1.41
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 700 thousand

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Burlington Nor.SantaFe - BNI - cls: 65.77 chg: -2.29 stop: 72.05

The Dow Jones transportation sector index was hit hard today with a 2.9% decline. The railroads paced the decline with a 2.9% loss as well. Shares of BNI under performed its peers with a 3.3% loss on above average volume. The stock might see a bounce near $65.00 or its July low near $64.50 but traders can use the bounce as a new entry point. We don't see any changes from our Tuesday new play description. Our target is the bottom edge of the current channel in the $62.50-60.00 range.

Picked on August 08 at $ 68.06
Change since picked: - 2.29
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Cummins Inc. - CMI - close: 117.00 chg: -2.77 stop: 123.51

Our aggressive put play in CMI is off to a good start. Shares lost 2.3% on decent volume today. The decline appears to break the short-term trendline of higher lows. Our target is the $112.75 mark but some traders may want to exit near the 50-dma, currently near $113.15.

Picked on August 08 at $119.77
Change since picked: - 2.77
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 1.2 million

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US Airways - LCC - close: 40.78 chg: -1.17 stop: 45.26 *new*

Target achieved in LCC. Airlines were getting crushed today. The XAL airline index lost just over 4%, making it the second worst performing industry group. Shares of LCC dipped to $39.54 before bouncing. We have two targets and our conservative target was $40.25. We hope traders took some profits. LCC now looks short-term oversold and ready to bounce from round-number support at $40. We expect the bounce to fail near $45.00 and we're lowering our stop loss to $45.26. Our aggressive target is the $36.00 level.

Picked on August 01 at $ 43.54
Change since picked: - 2.76
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 1.6 million

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NII Holdings - NIHD - close: 49.49 chg: +0.34 stop: 52.51

NIHD tried to rebound this morning but the rally stalled at its short-term trendline of lower highs (and under its 10-dma and 200-dma). Readers can use this as a new entry point to buy puts. We do expect some sort of bounce near $47.50 but our target is the $45.50-45.00 range since $45.00 looks like stronger support.

Picked on August 07 at $ 49.90
Change since picked: - 0.41
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 2.2 million

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Transocean Inc. - RIG - cls: 67.03 chg: -0.62 stop: 75.25

RIG hit another new relative low today and on strong volume again. We keep expecting an oversold bounce but it remains elusive. The pattern is very bearish but traders need to be ready and expect a bounce sooner rather than later. The $70-72 region is probably where RIG will first encounter new overhead resistance. We are suggesting two targets: a conservative target at $65.25 and a more aggressive target at $61.00. The P&F chart points to a $59 target.

Picked on August 07 at $ 69.49
Change since picked: - 2.46
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 6.4 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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Bausch Lomb - BOL - close: 45.35 change: -0.68 stop: n/a

Even though BOL received a downgrade today we do not see any changes from our previous updates on BOL. We're not suggesting new positions. We have less than two weeks left before August options expire and need to see a bigger move in BOL soon. Our estimated cost on the strangle was $2.15. 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: - 2.05
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.2 million

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3M Co. - MMM - close: 68.30 change: -0.26 stop: n/a

We do not see any changes from our previous updates on MMM. We're not suggesting new positions. Our estimated cost for our August strangle 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: - 2.42
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 3.7 million
 

Dropped Calls

Femsa Fomento - FMX - close: 87.84 chg: -2.17 stop: 85.85

Red alert! Shares of FMX just fell off a cliff in the last 45 minutes of trading on Wednesday. We do not see any specific news to account for the weakness in FMX but the volume came in well above the daily average. This may have been a late day reaction to a 280-point (1.3%) sell-off in the Mexican stock market today. All we know is that the move in the U.S.-traded shares of FMX is bearish. The stock has produced another failed rally and now a breakdown under $90.00 and its 10-dma. There is a chance that FMX might bounce near the $86.50 region but we're choosing to exit early and limit our losses.

Picked on August 04 at $ 90.50 *gap higher*
Change since picked: - 2.66
Earnings Date 07/28/06 (confirmed)
Average Daily Volume = 524 thousand

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Goldman Sachs - GS - close: 150.01 chg: -1.44 stop: 146.95

We're calling it quits with GS right now. The stock has failed to hold any gains over the $155 level for the last four days in a row. Now the stock has produced a bearish engulfing-type of candlestick pattern and a breakdown below its simple 10-dma. The technical indicators are deteriorating. Our conservative target was the $154.00 level, which was hit multiple times. Our aggressive target was the $157.50 mark.

Picked on July 25 at $148.05
Change since picked: + 1.96
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 5.2 million
 

Dropped Puts

Manpower Inc. - MAN - close: 55.38 chg: -2.06 stop: 60.76

Target achieved. MAN hit a new relative low and broke down under both its simple 200-dma and its exponential 200-dma with today's 3.5% decline. Our recently adjusted target was the $56.00-55.75 range. The play is now closed but more aggressive traders may want to aim lower since the P&F chart points to a $48 target.

Picked on July 20 at $ 59.42
Change since picked: - 4.04
Earnings Date 07/19/06 (confirmed)
Average Daily Volume = 1.0 million
 

Dropped Strangles

L-3 Comm. - LLL - close: 66.58 chg: -3.08 stop: n/a

Target achieved. Investors reacted negatively to news that the company won a 10-year contract with the army. The stock initially gapped open higher and then plunged to new 52-week lows on heavy volume. This pushed the August $70 put (LLL-TN) to an intraday high of $3.44 and it's currently trading at $3.50bid/$3.60ask. It was our plan to sell if either option in our strangle hit $2.25 or more. Our estimated cost was $1.35.

Picked on July 23 at $ 75.26
Change since picked: - 8.68
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 1.2 million
 

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