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Call Updates

None
 

Put Updates

Apple Computer - AAPL - close: 63.65 chg: -0.42 stop: 70.01

The options backdating scandal is still looming over shares of AAPL. The company has delayed filing its 10-Q since it's reviewing the options issue and the delay has forced the NASDAQ to send AAPL a delisting notice. Investors didn't react much to the news. Shares lost 0.6% and spent most of the day trading sideways against technical support at its 100-dma. We remain bearish but we're not suggesting new positions at this time. There remains a chance that AAPL will produce a bounce and re-challenge the 10-dma and 200-dma as overhead resistance. Our short-term target is the $60.50-60.00 range. The top of the July gap near $59.70 could act as support.

Suggested Options:
We're not suggesting new positions in AAPL at this time.

Picked on August 08 at $ 64.78
Change since picked: - 1.13
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 28 million

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Autozone Inc. - AZO - close: 88.67 chg: +0.40 stop: 90.05

The good news with AZO on Friday is that the rebound appeared to fail at its simple 50-dma. Unfortunately, we're still on the defensive and we still don't see any news to account for Thursday's big reversal and bullish engulfing candlestick pattern. The only news we did find on Thursday was a negative earnings report from a rival. The overall trend remains bearish and the Point & Figure chart points to a $72 target. However, we would wait for another decline under Friday's low (87.75) before considering new put positions. Our target is the $82.50-80.00 range.

Suggested Options:
Remember, we would wait for a move under $87.75 before considering new positions. We like the September puts since we plan to exit ahead of the September earnings report.

BUY PUT SEP 90.00 AZO-UR open interest=1042 current ask $3.30
BUY PUT SEP 85.00 AZO-UQ open interest=4607 current ask $1.35

Picked on August 08 at $ 87.73
Change since picked: + 0.94
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 700 thousand

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Boeing - BA - close: 75.96 change: -0.24 stop: 80.85

BA's Thursday bounce from round-number support at $75.00 did not make much progress on Friday. Shares of BA drifted lower after testing Thursday's high. The relative weakness was a bit surprising after some positive analyst comments about BA probably taking market share from rival Airbus. Plus, there was further (good) news that BA had cinched a joint venture deal with Russia's VSMPO-Avisma to produce titanium components for BA's planes. We are still suggesting put plays with BA under $76.00 and its 200-dma(s) but more conservative traders might feel a lot better by waiting for a breakdown under $75.00 before initiating positions. Looking at the weekly chart and its long-term trendline of support is another reason why readers may want to wait for a drop under $75 first. Our target is the $70.50-70.00 range.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 80.00 BA-UP open interest=2499 current ask $4.80
BUY PUT SEP 75.00 BA-UO open interest=6760 current ask $1.80
BUY PUT SEP 70.00 BA-UN open interest= 705 current ask $0.50

Picked on August 10 at $ 75.75
Change since picked: + 0.21
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 4.2 million

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Burlington Nor.SantaFe - BNI - cls: 64.84 chg: -0.71 stop: 70.25*new*

The railroad and transportation stocks continue to show a lot of relative weakness. The Dow Jones Transportation index lost 1.7% on Friday. Shares of BNI fell just over 1% to close under potential round-number support at the $65.00 level. We remain bearish with BNI stuck in its descending channel but we wouldn't be surprised to see a bounce from the late July low near $64.50, especially with shares looking short-term oversold. At this time we're adjusting our stop loss to $70.25 since the top of the channel should be resistance near $70.00. Traders looking for a new entry point can watch for a bounce/failed rally in the $67.50 region. Our target is the bottom edge of the current channel in the $62.50-60.00 range.

Suggested Options:
We are not suggesting new put plays in BNI at this time.

Picked on August 08 at $ 68.06
Change since picked: - 3.22
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Chipotle Mex Grill - CMG - close: 49.29 chg: +0.62 stop: 54.01

CMG managed a minor oversold bounce on Friday but the stock was unable to recapture the $50.00 level. While most of the technical indicators are bearish we're not sure the bounce is over yet. We would consider opening new positions here but a better entry point would be to wait and see if CMG rebounds toward the $52.00-53.00 level. A failed rally under its 10-dma could be an attractive entry point to buy puts. The P&F chart is bearish with a $39.00 target. Our target is the $45.50-45.00 range.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 55.00 CMG-UK open interest=308 current ask $6.50
BUY PUT SEP 50.00 CMG-UJ open interest=397 current ask $3.10
BUY PUT SEP 45.00 CMG-UI open interest=803 current ask $1.10

Picked on August 09 at $ 50.28
Change since picked: - 0.99
Earnings Date 10/30/06 (unconfirmed)
Average Daily Volume = 414 thousand

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Cummins Inc. - CMI - close: 115.72 chg: -2.40 stop: 121.27*new*

Shares of CMI continue to see more profit taking. The RSI and stochastics were already bearish and now the MACD on the daily chart has produced a new sell signal. More conservative traders may want to lock in some profits now or plan on exiting early near the rising 50-dma near $113.35. Our plan is to exit at $112.75. We would not suggest new positions at this time but another failed rally under its 10-dma or the $118 level could be used as a new entry point. We are lowering the stop loss to just above last Wednesday's high at $121.27.

Suggested Options:
We are not suggesting new put plays on CMI at this time.

Picked on August 08 at $119.77
Change since picked: - 4.05
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Fastenal - FAST - close: 35.02 chg: -0.66 stop: 37.51*new*

The pattern on FAST is still bearish. The stock rallied higher in early August to "fill the gap" from its July gap down on earnings. The rally reversed at its descending 50-dma. Now shares look poised to begin a new leg lower. Short-term technicals like the RSI and stochastics are bearish and the MACD is hinting at a new sell signal soon. Traders can choose to open put positions here, wait for a failed rally under $36.00 or wait for a new decline under Friday's low at $34.78. We're adjusting our stop loss to $37.51, which is above the descending 50-dma. Our target is the $30.75-30.00 range.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 40.00 FQA-UH open interest=105 current ask $5.40
BUY PUT SEP 35.00 FQA-UG open interest=241 current ask $1.65
BUY PUT SEP 30.00 FQA-UF open interest=376 current ask $0.30

Picked on August 10 at $ 34.90
Change since picked: + 0.12
Earnings Date 10/11/06 (unconfirmed)
Average Daily Volume = 1.2 million

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Hartford Fincl - HIG - close: 80.61 chg: +0.03 stop: 82.01

Insurance stocks have managed to rally higher in the last two days on a stronger than expected earnings report from AIG. We noticed that HIG has been under performing its peers with an anemic bounce. We're going to keep the stock on the newsletter as a bearish candidate. Our plan is to buy puts on a breakdown below support in the $79.25-79.50 region. Our trigger is at $79.20. More conservative traders may want to wait for a drop under $79.00 before initiating positions. Our short-term target is going to be the $75.25-75.00 range. More aggressive traders may want to aim for the $72.50-70.00 range. The P&F chart points to a $73 target.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 85.00 HIG-UQ open interest=1319 current ask $5.00
BUY PUT SEP 80.00 HIG-UP open interest=2699 current ask $1.75
BUY PUT SEP 75.00 HIG-UO open interest=1742 current ask $0.45

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Intuitive Surgical - ISRG - cls: 94.40 chg: -1.02 stop: 101.55

ISRG is an aggressive, higher-risk put play. The stock can be very volatile at times and traders need to be careful and expect reversals. We thought that Thursday's trading had produced a short-term bullish reversal but thankfully there was no follow through on Friday. Shares lost just over 1% but volume was pretty low on Friday's session. We remain bearish and the move under $95 could be used as a new entry point to buy puts. Our target is the March lows in the $87.75-87.50 range. ISRG's P&F chart points to a $60 target.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 100.0 AXQ-UT open interest= 404 current ask $8.60
BUY PUT SEP 95.00 AXQ-US open interest= 519 current ask $5.70
BUY PUT SEP 90.00 AXQ-UR open interest= 517 current ask $3.50

Picked on August 10 at $ 94.90
Change since picked: - 0.50
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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US Airways - LCC - close: 37.19 chg: -3.33 stop: 42.85*new*

The XAL airline index hit new lows for the year with a 4.9% sell-off. Shares of LCC helped lead the way with an 8.2% drop on Friday. LCC broke down under the $40.00 level (again) and its simple and exponential 200-dma. Volume on the session was very high and shares hit an intraday low of $36.80. The stock has already hit our conservative target at $40.25 and now it's quickly approaching our aggressive target at $36.00. More conservative traders may just want to exit early right now! We're not suggesting new plays and we're adjusting the stop loss to 42.85. FYI: LCC is looking short-term oversold and due for a bounce soon.

Suggested Options:
We are not suggesting new plays in LCC at this time.

Picked on August 01 at $ 43.54
Change since picked: - 6.35
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 1.6 million

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NII Holdings - NIHD - close: 48.73 chg: -0.85 stop: 52.51

We do not have anything new to report on for NIHD. The stock is still inching lower in a narrow channel. The overall pattern looks bearish with the lower highs and the breakdown under its 200-dma and the $50.00 level. The P&F chart is also bearish. We are suggesting puts with the stock under $50.00 but if you're patient we may get another chance to enter positions closer to the $50 level. 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.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 55.00 QHQ-UK open interest= 407 current ask $6.80
BUY PUT SEP 50.00 QHQ-UJ open interest=1192 current ask $3.20
BUY PUT SEP 45.00 QHQ-UI open interest= 773 current ask $1.00

Picked on August 07 at $ 49.90
Change since picked: - 1.17
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 2.2 million

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Transocean Inc. - RIG - cls: 66.80 chg: +0.55 stop: 72.25

We have been warning readers for days that RIG was short-term oversold and due for a bounce. The bounce finally appeared on Friday with a 0.8% gain to end its seven-day losing streak. The stock has been sinking on very strong volume, which is bearish. However, the bounce may not be over and honestly we don't expect it to be over very quickly. RIG could rebound back toward broken support and what should be new resistance at the $70.00 level. We are not suggesting new put plays at this time. Chart readers will notice that the P&F chart's bearish target has grown from $59 to $51. We are suggesting two targets: a conservative target at $65.25 and a more aggressive target at $61.00.

Suggested Options:
We are not suggesting new put plays in RIG at this time.

Picked on August 07 at $ 69.49
Change since picked: - 2.69
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: 45.01 change: -0.02 stop: n/a

We are quickly running out of time with this strangle play on BOL. There are only five more trading days left until August options expire. We are not suggesting new positions. 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). FYI: Traders may want to plan an early exit on any spike that brings the put towards breakeven.

Suggested Options:
We are not suggesting new positions on BOL.

Picked on July 23 at $ 47.40
Change since picked: - 2.39
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.2 million

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3M Co. - MMM - close: 68.53 change: +0.12 stop: n/a

Our strangle play in MMM is also running out of time. There are just five days left before August options expire. 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). FYI: Traders may want to plan an early exit on any spike that brings the put towards breakeven.

Suggested Options:
We are not suggesting new positions on MMM.

Picked on July 23 at $ 70.72
Change since picked: - 2.19
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 3.7 million
 

Dropped Calls

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Dropped Puts

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Dropped Strangles

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