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Call Updates

Bucyrus - BUCY - close: 52.98 chg: +1.11 stop: 47.69

BUCY continued to rally higher on Thursday following yesterday's bullish breakout. Volume came in strong again, which is a good sign for the bulls. We remain positive and would consider new positions here. Yesterday we said a dip to $51 or $50 would be a good entry point and BUCY dipped to $51.03 this afternoon before bouncing higher. There is still a chance that another dip is in BUCY's future since the major averages are looking a little short-term overbought. BUCY appears to have some resistance near $58.00 and again near $60.00. We're going to target a run up into the $57.50-60.00 range.

Picked on August 16 at $ 51.87
Change since picked: + 1.11
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 697 thousand

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Goldman Sachs - GS - close: 154.45 chg: -0.54 stop: 149.40

Broker-dealer stocks were generally higher today. The XBD index added 1.4%. Unfortunately, the early rally in GS reversed midday and the stock closed near its lows. The move today looks like a short-term failed rally/bearish reversal. We would expect a drip towards $153-152 soon. Look for a dip and bounce combo as a new entry point to buy calls. Our conservative target is $160.00. Our secondary target is the $164.50 level. Consider selling half your position at $160 and the rest at $164.50. We do not want to hold over the late September earnings report. FYI: The P&F chart points to a $190 target.

Picked on August 16 at $154.99
Change since picked: - 0.54
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 5.3 million

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MicroStrategy - MSTR - close: 91.30 chg: +1.22 stop: 85.99

We did not have to wait very long for MSTR to hit our trigger and open the play. Shares continued to rally and a midday spike over $92.00 and its 200-dma hit our trigger at $92.05. Unfortunately, MSTR failed to hold on to these gains and the stock closed back under the 200-dma. This late day weakness is a concern. We would wait for another move over $92.00 or today's high (92.74) before considering new call positions. Now that the play is open our target is the $98.75-99.00 range.

Picked on August 16 at $ 92.05
Change since picked: - 0.75
Earnings Date 10/27/06 (unconfirmed)
Average Daily Volume = 431 thousand
 

Put Updates

Autozone Inc. - AZO - close: 88.19 chg: +0.07 stop: 90.05

There is no real change from our previous updates on AZO. The stock remains in a bearish pattern (descending channel) and under technical resistance at its 50-dma. However, we're getting a lot of mixed signals. The MACD on the weekly chart is nearing a bullish signal versus a the MACD on the daily nearing a sell signal. Other technical oscillators are mixed. AZO is poised for a breakout one way or the other with its short-term pattern of lower highs and higher lows (a pennant). We are not suggesting new put positions at this time. Our target is the $82.50-80.00 range.

Picked on August 08 at $ 87.73
Change since picked: + 0.46
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 700 thousand

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Boeing - BA - close: 78.59 change: -0.24 stop: 80.45

The rebound in BA stalled and the stock remains in its bearish pattern of lower highs. Meanwhile in the news BA announced it might shut down production of its C17 military cargo planes after the last one is built in 2008. The company also announced it was closing its in-air high-speed Internet service. We are not suggesting new positions.

Picked on August 10 at $ 75.75
Change since picked: + 2.84
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 4.2 million

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Burlington Nor.SantaFe - BNI - cls: 68.88 chg: -0.11 stop: 70.25

The bounce in the transports and in shares of BNI also took a breather today. BNI rallied to resistance near $70 and the top of its bearish channel before reversing direction. This looks like a new entry point to buy puts although traders might want to wait for a move under today's low (67.76) before initiating new put plays.

Picked on August 08 at $ 68.06
Change since picked: + 0.82
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Chipotle Mex Grill - CMG - close: 53.08 chg: -0.42 stop: 54.01

The rally also stalled in shares of CMG and the stock came close to but failed to breakout over the $54.00 level. We're not suggesting new bearish plays at this time. More aggressive traders may want to put their stop loss above $55.00 and/or its 50-dma.

Picked on August 09 at $ 50.28
Change since picked: + 2.80
Earnings Date 10/30/06 (unconfirmed)
Average Daily Volume = 414 thousand

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Intuitive Surgical - ISRG - cls: 97.00 chg: +0.05 stop: 101.55

The daily chart for ISRG shows a MACD indicator that's nearing a new buy signal but the stock really isn't seeing a lot of buying pressure right now. We are not suggesting new plays at this time. ISRG is still a volatile stock and any market rally could send shares soaring past the $100 level.

Picked on August 10 at $ 94.90
Change since picked: + 2.07
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.1 million

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NII Holdings - NIHD - close: 51.80 chg: +0.40 stop: 52.51

It was a close call but NIHD's rally today stalled at $52.49 before the stock pared its gains. Our stop loss is at $52.51. The move did produce a MACD buy signal on the daily chart but it looks like NIHD could go either direction from here. We are not suggesting new positions at this time but a drop back under the $50 level would look like a new entry point.

Picked on August 07 at $ 49.90
Change since picked: + 1.90
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 2.2 million

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Transocean Inc. - RIG - cls: 67.08 chg: -0.72 stop: 70.25

Another strong decline in crude oil futures sent the oil stocks lower. RIG's oversold bounce stalled and shares lost just over 1% today. We're not suggesting new positions at this time. The stock has already hit our conservative target at $65.25. Our secondary, aggressive target is the $61 level.

Picked on August 07 at $ 69.49
Change since picked: - 2.41
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: 46.74 change: +0.61 stop: n/a

We only have one day left before the August options expire on this strangle. Our estimated cost on the strangle was $2.15. 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: - 0.66
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.2 million

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3M Co. - MMM - close: 71.20 change: +0.41 stop: n/a

Tomorrow is the last day before August options expire on this strangle. Our estimated cost for our August strangle was $0.75. 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: + 0.48
Earnings Date 07/25/06 (confirmed)
Average Daily Volume = 3.7 million
 

Dropped Calls

None
 

Dropped Puts

Lam Research - LRCX - close: 41.19 change: -0.75 stop: 42.01

We have been stopped out of LRCX at $42.01. There was an unexpected spike higher around 10:00 a.m. this morning that quickly reversed but it was enough to tap our stop loss. Overall the move today looks like a failed rally/reversal and a potential entry point to buy puts again. We're going to keep an eye on LRCX for a breakdown under $40 again.

Picked on August 13 at $ 39.04
Change since picked: + 2.15
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 3.0 million

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MDC Holdings - MDC - close: 44.86 change: +0.14 stop: 45.15

We've been stopped out of MDC at $45.15. The homebuilders spiked higher this morning before paring their gains and shares of MDC hit a high of $45.43. The stock remains in a long-term bearish trend but short-term indicators are looking more bullish with this week's oversold bounce.

Picked on August 14 at $ 42.25
Change since picked: + 2.61
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 991 thousand
 

Dropped Strangles

None
 

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