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Call Updates

Cymer Inc. - CYMI - close: 42.42 chg: -0.88 stop: 41.95

Our concerns are being realized. Tech stocks and especially semiconductor stocks are seeing more profit taking. What is really concerning is that the semiconductor SOX index has closed under what should have been support at the 450 level. Currently the SOX is testing (or in the process of breaking) its two-month trendline of support. The SOX's MACD new (two-day old) sell signal looks stronger. Shares of CYMI under performed its peers with a 2% loss and a dip back toward the $42.00 level. We expected the $42 region to offer some support and that's why our stop loss is at $41.95. However, we are not optimistic here and traders may want to heed our earlier suggestion to just bail out early and cut losses now. We're not suggesting new positions. The only reason we're not closing the play now is because CYMI still has a chance to bounce from the $42 level. We do note that the weekly chart and the Point & Figure chart still look bullish.

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



Picked on September 06 at $ 42.55
Change since picked: - 0.13
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.0 million

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Mettler Toledo - MTD - close: 64.15 chg: -0.05 stop: 61.99

We do not have anything new to report on for MTD. Our updates have been warning readers for the last several days to expect some profit taking. In reality MTD has shown some relative strength by limiting the profit taking to less than 2% last week. Shares managed to rebound from its intraday low on Friday. Our market bias is not bullish for the next few weeks and we still expect that any market weakness will likely pull MTD back toward support near $62.50-62.00. If you're feeling optimistic the bounce on Friday might be a new entry point. The stock rebounded from an almost perfect 38.2% Fibonacci retracement of its September rally. However, if you're considering new bullish positions you may also want to use a tighter stop loss. Currently our target is the $68-69 range. We do not want to hold over the late October earnings report.

Suggested Options:
We are not suggesting new call positions on MTD at this time.



Picked on September 13 at $ 63.66
Change since picked: + 0.49
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 169 thousand

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Omnicom - OMC - close: 90.19 chg: -1.21 stop: 89.89 *new*

OMC has now given back all of its gains since the bullish breakout over resistance near $90 in early September. We've been cautioning readers about a pull back toward broken resistance and what should be support at the $90 level. Shares dipped to $89.93 near its 100-dma on Friday afternoon. The ten-day sell-off in OMC has down some technical damage to the stock's upward trend. Friday's decline actually produced a new MACD sell signal on the daily chart. Normally we would expect a bounce from here, near support, but since our market bias is not very bullish we'd hesitate to open new plays right here. We are going to inch up our stop loss to $89.89. Currently our target is the $96-97 range.

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



Picked on September 10 at $ 90.97
Change since picked: - 0.78
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Burlington Nor.SantaFe - BNI - cls: 68.72 chg: +0.12 stop: 71.01

Our new put play on BNI has been opened but it looks like a false start. We had suggested a trigger to buy puts at $67.75 in an attempt to catch a bearish breakdown under $68 and its 50-dma. BNI did dip to $67.57 but rebounded back from its lows. Odds are good that the bounce will carry it back toward the $70 region. Readers can wait and watch for a failed rally under $70 as a new entry point or look for another decline under $68.00. We're reposting our original play description here:

In spite of plunging oil prices the transportation sector has not been able to breakout past resistance in the 4475-4500 region and its simple 200-dma. Now the sector is falling with today's 1.5% decline and breakdown under technical support at its 50-dma. The railroad stocks are performing worse with the Dow Jones railroad index falling 2.2% and also trading under its 50-dma. While momentum indicators are turning bearish we admit this may be a tough sell. Both the Transportation average and the railroad index have support that was built over the last couple of months. However, the railroads, including shares of BNI, have produced a third failed rally at its five-month trendline of resistance (see chart). This could be the beginning of a new leg lower. We are going to suggest a trigger to buy puts on BNI at $67.75, which is under the stock's 50-dma. We do expect some support near $64.00. Therefore we're going to list two targets. Our conservative target is $64.25 and our aggressive target is at $61.00. We do not want to hold over the late October earnings report.

Suggested Options:
We are suggesting the November puts. We do not want to hold over the October earnings. Our trigger to open plays is at $67.75. Remember that it is you, the individual trader, who should decide which month and strike price best suits your trading style and risk.

BUY PUT NOV 70.00 BNI-WN open interest= 238 current ask $3.80
BUY PUT NOV 65.00 BNI-WM open interest=1289 current ask $1.65



Picked on September 22 at $ 67.75
Change since picked: + 0.97
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.8 million

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Caterpillar - CAT - close: 62.77 chg: -1.77 stop: 67.36

Our put play in CAT is off to a good start. Shares broke down under support on Thursday and hit our trigger to buy puts at $64.59 on rising volume. Friday's session saw another 2.7% decline on even stronger volume to confirm the breakdown. We probably wouldn't open new positions right here. Wait for a bounce/failed rally under $65 as an entry point. Our target is the $60.25-60.00 range but more aggressive traders may want to aim lower. The P&F chart does point to a $48 target.

Suggested Options:
We are not suggesting new positions at this time. See play details for new entry point ideas.



Picked on September 21 at $ 64.59
Change since picked: - 1.82
Earnings Date 10/20/06 (unconfirmed)
Average Daily Volume = 5.2 million

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EOG Resources - EOG - close: 62.19 chg: -0.31 stop: 64.15

EOG is at and has been at a pivotal point the last couple of days. The stock has been somewhat oversold, not as much as crude oil futures, but both could see a bounce higher. Yet at the same time EOG is struggling to breakout over resistance at $64.00 and its two-month trendline of lower highs, which is actually the top of its descending channel (see chart). If you read the market wrap this weekend then you know that odds are good oil stocks will continue to sell-off this week as funds manage their window dressing for the end of the quarter. This selling pressure should keep EOG inside its bearish channel and under resistance at $64.00. Yet we hesitate to suggest new put plays with the stock looking poised to move higher. Currently our target is the $57.50-55.00 range. Traders may want to consider new put positions on a breakdown under $61 and its 10-dma.

Suggested Options:
We are not suggesting new plays in EOG but the update does have suggestions on an entry point.



Picked on September 06 at $ 63.85
Change since picked: - 1.66
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 3.3 million

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Express Scripts - ESRX - close: 79.62 chg: -1.41 stop: 82.51

Good news! The afternoon bounce from Thursday's sell-off has failed. Shares of ESRX produced a failed rally near $81.50 and its 200-dma on Friday morning and traded lower to close under support near $80 and its 50-dma. This looks like a new entry point to buy puts. The stock is breaking down from a six-week trading range. The P&F chart has produced a triple-bottom breakdown sell signal with a $73 target. We're only aiming for a decline into the $75.50-75.00 range. We do not want to hold over the late October earnings report.

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 85.00 XTQ-WQ open interest=727 current ask $7.10
BUY PUT NOV 80.00 XTQ-WP open interest=713 current ask $4.10
BUY PUT NOV 75.00 XTQ-WO open interest=745 current ask $2.20



Picked on September 21 at $ 79.85
Change since picked: - 0.23
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Joy Global - JOYG - close: 33.17 change: +0.17 stop: 36.55*new*

Shares of JOYG produced a bit of an oversold bounce after three days of losses. Shares continue to look bearish following the breakdown under support near $35.00. The Point & Figure chart has produced a triple-bottom breakdown sell signal with a $19 target. Readers could open new put positions here but we'd prefer to see a failed rally under $35 or its 10-dma before opening new plays. Speaking of the 10-dma, we're going to inch our stop loss down to $36.55. Our target is the $30.50-30.00 range. Keep an eye on CAT, which is also breaking down. Weakness in CAT should also drag on JOYG.

Suggested Options:
We would suggest the November puts but see play details on entry point ideas.



Picked on September 20 at $ 34.95
Change since picked: - 1.78
Earnings Date 11/30/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Las Vegas Sands - LVS - close: 65.27 change: -1.14 stop: 70.05

LVS continues to look bearish. The stock erased Thursday's gain and produced a bearish engulfing candlestick pattern on Friday. The recent trading in LVS suggests the next move is lower. The P&F chart is bearish and currently points to a $57 target. We are suggesting new positions right here but more conservative traders may want to wait for a decline under $64, which might act as support. We suspect that the 200-dma will offer some technical support so we're targeting the $60.50-60.00 range. We do not want to hold over the early November earnings report.

Suggested Options:
We are suggesting the November puts but we do not want to hold over LVS's early November earnings report.

BUY PUT NOV 70.00 LVS-WN open interest= 96 current ask $7.20
BUY PUT NOV 65.00 LVS-WM open interest=205 current ask $4.30
BUY PUT NOV 60.00 LVS-WL open interest=518 current ask $2.30



Picked on September 19 at $ 65.99
Change since picked: - 0.72
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 2.2 million

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Nucor - NUE - close: 46.97 change: -0.70 stop: 50.01

We are seeing a number of the metal and steel-related stocks breaking down under support and we expect shares of NUE to join them soon. NUE broke down under a huge pennant pattern of lower highs and higher lows about two weeks ago. Since then NUE has consolidated sideways but the attempt at a bounce stalled out near $49.50. We suspect that the next move will be a new leg lower. Our plan is to catch a breakdown under $46.00 and we're suggesting a trigger to buy puts at $45.95. If triggered our target is the $40.50-40.00 range. We do not want to hold over the mid October earnings report. FYI: The P&F chart has a triple-bottom breakdown sell signal with a $41 target.

Suggested Options:
We are suggesting the October and November puts. However, traders should remember that October strikes expire in four weeks but we plan to exit ahead of NUE's earnings report in mid October. You, the individual trader, should choose which month and strike price best suits your trading style and risk.

BUY PUT OCT 50.00 NUE-VJ open interest=7531 current ask $4.80
BUY PUT OCT 47.50 NUE-VW open interest=5788 current ask $3.10
BUY PUT OCT 45.00 NUE-VI open interest=5322 current ask $1.85
BUY PUT OCT 42.50 NUE-VV open interest=2728 current ask $1.00

BUY PUT NOV 50.00 NUE-WJ open interest= 402 current ask $5.40
BUY PUT NOV 45.00 NUE-WI open interest= 394 current ask $2.55
BUY PUT NOV 40.00 NUE-WH open interest= 137 current ask $0.95



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

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Southern (Peru) Copper - PCU - cls: 86.92 chg: -0.59 stop: 92.51

Our new put play in PCU is now open. We had suggested a trigger to buy puts at $86.50, which was under support at the $87.00 level. Shares of PCU dipped to $85.66 on Friday afternoon before bouncing back. Don't be surprised to see the stock bounce back toward $90. A failed rally under $90 could be used as a new entry point. We don't see any other changes from our Thursday night new play description so we're reposting it here:

The trading in PCU has turned bearish. The stock has produced a bearish double-top pattern over the last couple of months and now shares are flirting with a breakdown under support in the $87.50-87.00 region. The P&F chart has already produced a breakdown sell signal with a $77 target. We do have a couple of concerns. PCU has potential support near $85 with its rising 200-dma. Plus, the price of copper has been rebounding since Wednesday's gap down. Shares of PCU and its rival PD can be somewhat volatile. Therefore we have to label this a more aggressive, higher-risk play. At this time we're suggesting a trigger to buy puts at $86.50. If triggered our target is the $81.00-80.00 range. Traders should also note that PCU is due to split 2-for-1 on October 3rd. This shouldn't have any big impact on our play but our post-split target would be the $40.50-40.00 range. More aggressive traders may want to aim lower.

Suggested Options:
We are suggesting the October and November puts. Please note that we do not want to hold over the mid October earnings report. Don't forget that October strikes expire in four weeks.

BUY PUT OCT 90.00 PCU-VR open interest=1156 current ask $5.50
BUY PUT OCT 85.00 PCU-VQ open interest=3275 current ask $2.95
BUY PUT OCT 80.00 PCU-VP open interest=3483 current ask $1.35

BUY PUT NOV 90.00 PCU-WR open interest= 53 current ask $8.60
BUY PUT NOV 85.00 PCU-WQ open interest= 213 current ask $5.70
BUY PUT NOV 80.00 PCU-WP open interest= 196 current ask $3.50



Picked on September 22 at $ 86.50
Change since picked: + 0.42
Earnings Date 10/16/06 (unconfirmed)
Average Daily Volume = 1.3 million

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FreightCar Amer. - RAIL - close: 53.84 chg: -0.66 stop: 56.32

We do not see any changes from our Thursday night new play description on RAIL so we're reposting it here:

RAIL is another play in the railroad sector that we think is headed lower. The stock did show some relative strength Thursday but the rally failed near (recent) support near $56 and its descending 100-dma. This sort of failed rally looks like a low-risk entry point to buy puts. We'll put our stop loss just above Thursday's high and the 100-dma. We're going to list two targets. We suggest selling half or more of your position at our first target in the $50.25-50.00 range. Sell the rest at our second target in the $46.00-45.00 range.

Suggested Options:
We are suggesting the November puts although Octobers and Decembers could also work. We do not want to hold over the late October earnings report.

BUY PUT NOV 55.00 RQN-WK open interest= 0 current ask $4.60
BUY PUT NOV 50.00 RQN-WJ open interest=133 current ask $2.30



Picked on September 21 at $ 54.50
Change since picked: - 0.66
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 353 thousand

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SanDisk - SNDK - close: 55.38 chg: -2.31 stop: 60.05

Our new play in SNDK is now open. The stock continued to show weakness on Friday with a 4% loss on above average volume. Friday's decline was also a bearish breakdown under technical support at its 200-dma. This confirms the breakdown under its trendline of support on Thursday. The weekly chart's latest candlestick is a both a failed rally and a bearish engulfing candlestick pattern. Our suggested entry point to buy puts was at $56.69. If you missed the entry point on Friday morning we would still consider new put plays right here. Our target is the $51.50-50.00 range. We do not want to hold over the mid October earnings report so that only gives us about four weeks.

Suggested Options:
We are suggesting the October puts although Novembers would work well. We plan to exit before October strikes expire to avoid SNDK's earnings report.

BUY PUT OCT 60.00 SWF-VL open interest= 7702 current ask $6.30
BUY PUT OCT 57.50 SWF-VY open interest=11444 current ask $4.60
BUY PUT OCT 55.00 SWF-VK open interest=12907 current ask $3.20
BUY PUT OCT 52.50 SWF-VX open interest= 9476 current ask $2.15
BUY PUT OCT 50.00 SWF-VJ open interest=10076 current ask $1.35



Picked on September 22 at $ 56.69
Change since picked: - 1.31
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 9.9 million

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Steel Dynamics - STLD - close: 47.84 chg: -2.13 stop: 52.05

Our put play in STLD is now open. As expected the stock continued to show weakness and shares broke down under support on Friday. The move confirms the bearish technical pattern and rising volume also adds some conviction behind the drop. We had a suggested trigger to buy puts at $49.40. If you missed the entry point you can choose to chase it here or wait for a possible bounce back toward $49-50. Our short-term target is the $45.15-45.00 range. More aggressive traders may want to aim lower. The P&F chart shows a triple-bottom breakdown sell signal with a $42 target. We do not want to hold over the mid October earnings report.

Suggested Options:
Traders can choose the October or November puts but don't forget we want to exit ahead of STLD's earnings report that is expected ahead of October expiration in four weeks.



Picked on September 22 at $ 49.40
Change since picked: - 1.56
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 1.5 million

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U.S.Steel - X - close: 55.76 chg: -1.39 stop: 60.05

Our new put play in X is now open. The stock broke down under support in the $57-56 range and hit our trigger to buy puts at $55.95. Volume on the sell-off was strong, which is a bearish sign. We do not see any changes from our Thursday night new play description so we're reposting it here:

X is another stock in the iron and steel sector that looks poised to breakdown. Shares have been consolidating in bearish fashion with a pattern of lower highs while it bounces from support near $56.00. More recently the trendline of lower highs has been bolstered by a descending 50-dma and now the $60.00 level with its 200-dma. Volume came in strong on Thursday's failed rally under $60 and the technical indicators are bearish. More aggressive traders may want to open put plays right here. We want to wait for a breakdown under support at $56.00. Therefore we're suggesting a trigger to buy puts at $55.95. If triggered our target is the $50.25-50.00 range. We do not want to hold over the late October earnings report. FYI: We already have a couple of put candidates on the newsletter (NUE, STLD) in the steel and metals sector. We would suggest only trading one or two to prevent overexposure to one specific sector.

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 60.00 X-WL open interest=485 current ask $6.50
BUY PUT NOV 55.00 X-WK open interest=533 current ask $3.60
BUY PUT NOV 50.00 X-WJ open interest=379 current ask $1.75



Picked on September 22 at $ 55.95
Change since picked: - 0.19
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 4.4 million
 

Strangle Updates

None
 

Dropped Calls

Hartford Finc. - HIG - close: 84.94 chg: -0.66 stop: 84.95

We have been stopped out of HIG at $84.95. It shouldn't be a surprise. We warned readers on Thursday that HIG had produced a bearish reversal and we raised our stop loss to just under support near $85 and its 100-dma. The stock's bullish breakout over resistance and from a (bullish) inverse head-and-shoulders pattern just didn't see enough follow through. Friday's decline also produced a new MACD sell signal on the daily chart. We would keep an eye on HIG for a potential play. A breakdown under the 50-dma might be a bearish entry point while a new high over $87 might be a bullish entry point.



Picked on September 12 at $ 86.29
Change since picked: - 1.35
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Manpower - MAN - close: 59.55 chg: -0.92 stop: 59.45

We have been stopped out of MAN at $59.45. The intraday low on Friday was $59.41. We warned readers to beware any breakdown under the $60 level. There is a chance that MAN might bounce from technical support at its 50-dma near $59.00. The lack of volume on the recent pull back does not lend a lot of emphasis behind the move. However, it does look like the bullish breakout and buy signal from mid September has been reversal, especially now with the close under old resistance and what should have been support at the $60.00 level.



Picked on September 12 at $ 60.28
Change since picked: - 0.73
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 900 thousand
 

Dropped Puts

Johnson Controls - JCI - close: 68.40 chg: -0.79 stop: 74.16

Target achieved. Actually our target has been surpassed. JCI gapped open lower on Friday morning to open at $67.49, which was under the low end of our $68.50-67.50 target range. The stock dipped to $66.75 before bouncing. Our play is closed but more aggressive traders may want to aim lower.



Picked on August 22 at $ 72.96
Change since picked: - 4.56
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Jacobs Engineering - JEC - cls: 72.12 chg: -1.14 stop: 80.15

Target achieved. The sell-off in JEC has now reached seven days in a row. Volume on the decline has consistently come in strong, which is bearish. The stock is definitely looking oversold now and due for a bounce. Traders should note that JEC is nearing potential support at its trendline of higher lows (see chart). Our target was the $72.50-70.00 range. The play is closed.



Picked on September 18 at $ 79.45
Change since picked: - 7.33
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 416 thousand
 

Dropped Strangles

None
 

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