Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Beazer Homes - BZH - close: 39.89 change: -0.75 stop: 37.90

The homebuilders slipped lower after today's economic report came in worse than expected with new home construction falling 6%. The DJUSHB home construction index fell 1.69% and BZH pulled back 1.8%. This was on top of news last night that MTH had issued an earnings warning. If there is any good news here it is that traders bought the dip in BZH near $39.00, which supports a very short-term bullish trend of higher lows. We would wait for another move over $40.50 or $41.00 before considering new call positions. Our target is the $46-47 range. We do not want to hold over the November earnings report.

Picked on September 18 at $ 40.75
Change since picked: - 0.86
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.2 million

---

Cymer Inc. - CYMI - close: 43.31 chg: -0.69 stop: 41.95 *new*

The SOX semiconductor index tumbled today falling 2.2%. The index managed to bounce from its lows of the session near the 450 level, which acted as support (the 450 level is also broken resistance). CYMI followed the sector lower but only lost 1.56% and traders bought the dip at $42.43. We remain cautious and we're going to raise our stop loss to $41.95 to reduce our risk. Placing the stop under $42.00 should still put the stop under its four-week trendline of rising lows.

Picked on September 06 at $ 42.55
Change since picked: + 0.76
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.0 million

---

Hartford Finc. - HIG - close: 85.78 chg: -0.31 stop: 82.99

HIG experienced some intraday weakness but managed to reduce most of its losses by the closing bell. Volume came in pretty low for the second day in a row suggesting a lack of real selling pressure. The technical indicators aren't looking so hot since HIG's upward momentum is waning a bit. More conservative traders might want to adjust their stop loss higher (maybe towards the $85 level). We would wait for another move over $86.25 before considering new positions. Our target is the $91.50-92.00 range, near its May highs. However, we do expect some resistance in the $89-90 region. We do not want to hold over the early November earnings report.

Picked on September 12 at $ 86.29
Change since picked: - 0.51
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.4 million

---

Manpower - MAN - close: 60.28 chg: -0.48 stop: 57.99

This afternoon there was a small article released by AP saying Merrill Lynch believes that staffing firms might benefit in a slowing economy as corporations deal with rising labor costs. It didn't look like shares of MAN enjoyed any benefit from this opinion. As we discussed yesterday shares of MAN dipped toward its rising 10-dma before bouncing. Today's volume came in pretty low probably due to investors not willing to place any bets ahead of the FOMC meeting tomorrow. We would probably look for a bounce from here (over $61.00) before considering new call positions. More conservative traders may want to tighten their stops if you're worried about a "sell the news" reaction on tomorrow's FOMC report. Currently our target is the $65.00-66.00 range.

Picked on September 12 at $ 60.28
Change since picked: + 0.00
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 900 thousand

---

Mettler Toledo - MTD - close: 65.07 chg: -0.07 stop: 59.99

MTD continues to show relative strength. Traders bought the dip at $64.15 and the stock almost erased all of today's losses by the closing bell. Be advised that if the markets are not happy with the Fed's decision tomorrow or the Fed's comments that MTD would become a big target for profit taking given the current rally. Hopefully broken resistance in the $62.00-62.50 region will act as new support. More conservative traders may want to tighten their stops. We're not suggesting new plays at this time. Our target is the $68.00-69.00 range. Please note that we normally try to avoid playing stocks with average volume this low so traders may want to consider this a higher-risk play. We do not want to hold over the late October earnings report.

Picked on September 13 at $ 63.66
Change since picked: + 1.41
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 169 thousand

---

Omnicom - OMC - close: 90.88 chg: -0.79 stop: 89.75 *new*

We have been warning readers to expect a potential dip back toward the $90 region and OMC produced that dip today. Shares fell to an intraday low of $90.27 before bouncing. Volume came in above average and the stock closed under its 10-dma and both events would be considered bearish. Short-term technicals are also turning bearish at this point. OMC needs to see a bounce from here (the 90 region) to support its bullish pattern. We are going to raise our stop loss to $89.75. Wait for signs of a rebound before considering new call plays. We do not want to hold over the late October earnings report.

Picked on September 10 at $ 90.97
Change since picked: - 0.09
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million

---

United Ind. - UIC - close: 53.60 change: -1.55 stop: 51.77 *new*

Uh-oh! UIC's bullish trend is suddenly showing signs of trouble. We expected the pull back and the bounce during the first two weeks of September but today's 2.8% decline was unexpected and we cannot see any specific news to account for the weakness. We are raising the stop loss to breakeven at $51.77. More conservative traders may want to tighten their stops even further. A move under $51.50 and especially a move under $50.00 would suggest that UIC may have produced a bearish (mini-) double-top pattern in September.

Picked on August 27 at $ 51.77
Change since picked: + 1.83
Earnings Date 08/01/06 (confirmed)
Average Daily Volume = 198 thousand
 

Put Updates

Caterpillar - CAT - close: 66.56 chg: -0.43 stop: 67.36

Lack of follow through higher on yesterday's rally in CAT supports our bearish outlook for the stock. We are still waiting for a breakdown under $65.00 to open the play. Our suggested entry point is a trigger at $64.59. The P&F chart points to a $48 target. If triggered our short-term target is the $60.25-60.00 range.

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/20/06 (unconfirmed)
Average Daily Volume = 5.2 million

---

EOG Resources - EOG - close: 61.90 chg: -0.79 stop: 64.15

Oil stocks reversed lower (again) after today's punishing 3.3% decline in crude oil futures. Shares of EOG lost 1.2% on above average volume. This might qualify as a failed rally under the $64.00 level and traders looking for an entry point into the group may want to consider positions here. We still see the biggest risk here as the Iran-vs.-West conflict over its nuclear program. Our target for EOG is the $57.50-55.00 range. The P&F chart points to a $48 target.

Picked on September 06 at $ 63.85
Change since picked: - 1.95
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 3.3 million

---

Express Scripts - ESRX - close: 82.77 chg: -0.33 stop: 82.51

There is no change from our weekend update on ESRX. We are still sitting on the sidelines waiting for a breakout in ESRX. The stock has been trading sideways in the $80-85 range for six weeks. Taking into account that the next four weeks are usually a very bearish time period for stocks odds are definitely growing in favor of a breakdown. We're suggesting a trigger to buy puts at $79.85. If triggered our target is the $75.50-75.00 range.

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.6 million

---

Johnson Controls - JCI - close: 70.98 chg: +0.24 stop: 74.16

Investors choose to stick to the sidelines on JCI ahead of tomorrow's FOMC report in spite of a positive analyst report on the stock. An analyst at Bank of American raised his price target and earnings estimates for the company and reiterated their "buy" rating on the stock (source: AP). Lack of movement on the news would normally be considered bearish. We're not suggesting new positions at this time. Our target remains the $68.50-67.50 range. The P&F chart is more bearish with a $56 target.

Picked on August 22 at $ 72.96
Change since picked: - 1.98
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 1.3 million

---

Jacobs Engineering - JEC - cls: 77.30 chg: -1.67 stop: 82.26

News that JEC had landed two new big contracts today was not enough to stop the selling pressure. Shares of JEC fell another 2.1% on strong volume. Today's trading showed a drop under its exponential 200-dma. Our target is the $72.50-70.00 range.

Picked on September 18 at $ 79.45
Change since picked: - 2.15
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 416 thousand

---

Joy Global - JOYG - close: 36.89 change: -0.63 stop: 37.51

We are still on the sidelines waiting for JOYG to breakdown under support near $35.00. Our suggested trigger to buy puts is at $34.95. If triggered our target is the $30.50-30.00 range.

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/30/06 (unconfirmed)
Average Daily Volume = 2.6 million

---

Las Vegas Sands - LVS - close: 65.61 change: -1.24 stop: 70.05

LVS continued to sink on Tuesday and this time the stock broke down under short-term support at the $66 level. Shares lost 1.8% on the session with volume coming in above average, which is bearish. Today's decline is also a breakdown below the 50-dma and the MACD on the daily chart is strengthening the new sell signal. The play is now open since our trigger to buy puts was at $65.99. Our target is the $60.50-60.00 range. We do not want to hold over the early November earnings report.

Picked on September 19 at $ 65.99
Change since picked: - 0.38
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 2.2 million

---

Nucor - NUE - close: 48.14 change: -0.63 stop: 50.01

NUE's lack of follow through higher on yesterday's rally is not a good sign for the bulls. Aggressive traders may want to consider this a failed rally under $50 and a potential entry point. We are still waiting for a breakdown under support near $46.00. Our suggested trigger to buy puts is at $45.95. If triggered our target is the $40.50-40.00 range. The P&F chart has a relatively new triple-bottom breakdown sell signal with a $41 target. We do not want to hold over the mid October earnings report.

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 4.2 million

---

Steel Dynamics - STLD - close: 51.82 chg: -1.01 stop: 52.05

STLD's story is similar to NUE's. The lack of follow through on yesterday's rise is not a good sign and helps support our bearish bias. We're still on the sidelines waiting for a bearish breakdown under support. Our suggested entry point to buy puts is at $49.40. If triggered our target is the $45.15-45.00 range. We do not want to hold over the mid October earnings report.

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 1.5 million
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

Wynn Resorts - WYNN - close: 68.63 chg: -2.30 stop: 76.61

Target achieved. The sell-off in WYNN is picking up speed. Shares dropped to an intraday low of $67.31 and closed with a 3.2% loss on very strong volume. WYNN did manage (barely) to close above its rising 200-dma. Our target was the $68.50-68.00 range so the play is closed but more aggressive traders may want to consider letting a small position ride (with a tighter stop) since WYNN looks so bearish here.

Picked on September 18 at $ 72.51 *adjusted
Change since picked: - 3.88
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.3 million
 

Dropped Strangles

None
 

Play Update Archives