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Call Updates

Cymer Inc. - CYMI - close: 44.37 chg: +1.95 stop: 41.95

The semiconductor stocks were the second best performing sector on Monday. The SOX index rose about 2.5% but it failed to keep up with the 3.4% gain in homebuilders. Shares of CYMI definitely out performed the market and its peers. The stock added 4.59% and managed to close above technical resistance at the 100-dma and 200-dma but failed to breakout over resistance at the $45.00 mark. We are a little surprised by the show of strength and wonder how much of today's gain was fueled by short covering. We're still not suggesting new positions at this time. Our target is the $47.00-48.00 range.

Picked on September 06 at $ 42.55
Change since picked: + 1.82
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.0 million

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General Dynamics - GD - close: 71.12 change: +0.51 stop: 69.94*new*

The DFI defense index added 1.3% and closed near new four-month highs. Unfortunately, shares of GD under performed its peers. The stock added 0.7% but the trading today almost looks bearish. Shares of GD gapped open and spiked to $71.95 before reversing course. We did see GD bounce midday after filling the gap from this morning and chart readers will notice that volume spiked on today's session. We were counting on some end of quarter window dressing to help push GD higher. We remain bullish with GD over $70.00 but today's action did not inspire a lot of confidence. We're inching up our stop loss to $69.94. The P&F chart has a triple-top breakout buy signal and a $75 target. We agree with the target and will aim for the $74.50-75.00 range. We do not want to hold over the mid October earnings report.

Picked on September 24 at $ 70.61
Change since picked: + 0.51
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Mettler Toledo - MTD - close: 65.07 chg: +0.92 stop: 61.99

MTD's intraday bounce from Friday continued into Monday's session and the stock added 1.4%. Volume came in below average, which is normally not a good sign but shares did close near their best levels of the day and that tends to be bullish for the next day. We hesitate to suggest new positions but this could be used as a new entry point. If you do open new plays we'd suggest a tighter stop loss. Currently our target is the $68-69 range. 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

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Omnicom - OMC - close: 91.80 chg: +1.61 stop: 89.89

Against our expectations shares of OMC did rebound on Monday. This bounce is consistent with support in the $90 region. Aggressive traders might want to consider new positions here but we are not suggesting new positions at this time. Our target is the $96-97 range.

Picked on September 10 at $ 90.97
Change since picked: + 0.83
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Burlington Nor.SantaFe - BNI - cls: 69.20 chg: +0.48 stop: 71.01

Transports and railroad stocks managed to rally on Monday but it wasn't very convincing. Shares of BNI dipped to a new relative low this morning before bouncing back. If you look at the daily chart this is starting to look a potential entry point for calls wit today days of bounces relatively close to its 50-dma. We want to remind readers that BNI is still trading under its five-month trendline of resistance near last week's highs. A failed rally under $70 could be used as a new entry point however, we'd wait for another decline under $68 or today's low of $67.24 before opening positions. 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.

Picked on September 22 at $ 67.75
Change since picked: + 1.45
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.8 million

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Caterpillar - CAT - close: 64.33 chg: +1.56 stop: 67.36

A strong day for big caps and the DJIA helped shares of CAT produce a 2.4% oversold bounce. However, you'll notice that the rally stalled near broken support and what should be new resistance near $65.00. This may end up being a new entry point to buy puts. Traders could open positions now or wait for a new decline under $64.00. 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.

Picked on September 21 at $ 64.59
Change since picked: - 0.26
Earnings Date 10/20/06 (unconfirmed)
Average Daily Volume = 5.2 million

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Express Scripts - ESRX - close: 76.99 chg: -2.63 stop: 82.51

Talk on the street today was that drug stores and pharmacy benefit mangers like ESRX were trading lower as investors continue to react to last week's news about Wal-Mart offering 300 generic drugs at $4.00. Shares of ESRX lost another 3.3% on strong volume on Monday following Friday's bearish breakdown and sell signal. The drop has increased the P&F chart's bearish target from $73 to $69. We're aiming for a decline into the $75.50-75.00 range. We do not want to hold over the late October earnings report.

Picked on September 21 at $ 79.85
Change since picked: - 2.86
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Joy Global - JOYG - close: 32.80 change: -0.37 stop: 36.55

JOYG lost another 1.1%, potentially due to end of quarter window dressing, but it's worth noting that shares rebounded from their lows of the session (31.32). We do not see any changes from our weekend update. 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.

Picked on September 20 at $ 34.95
Change since picked: - 2.15
Earnings Date 11/30/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Las Vegas Sands - LVS - close: 65.71 change: +0.44 stop: 70.05

LVS also bounced from its lows of the session. We can probably expect another rebound toward the 10-dma, currently near $67.25. Wait and watch for a failed rally under the 10-dma or $68 before considering new bearish put plays. 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.

Picked on September 19 at $ 65.99
Change since picked: - 0.28
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 2.2 million

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Maxim Integrated - MXIM - close: 28.69 chg: +0.40 stop: 30.05

Red alert! The SOX semiconductor index and MXIM both dipped lower this morning before rebounding strongly. The SOX was actually the second best performing index behind the homebuilders. The move in MXIM looks like a perfect bear trap! The stock dipped under support at $28.00, hit our trigger to buy puts at $27.90, and then bounced from $27.76 back above the $28 level. This is bad news and more conservative traders, if you did open positions this morning, might want to exit immediately to cut your losses. There is still a chance that MXIM will fail to trade over resistance at $30.00 so we're going to keep the play open. Traders can choose to wait and watch for another failed rally under $30.00 or a new low under $27.75 as a new entry point to buy puts. Currently our target is the $24.00 level although we would expect a bounce near $26 and traders may want to do some profit taking at $26 to take some money off the table. We do not want to hold over the early November earnings report.

Picked on September 25 at $ 27.90
Change since picked: + 0.79
Earnings Date 11/03/06 (unconfirmed)
Average Daily Volume = 5.4 million

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Nucor - NUE - close: 47.17 change: +0.20 stop: 50.01

Monday morning shares of NUE were downgraded. This news propelled the stock through support at $46.00 and hit our trigger to buy puts at $45.90. Unfortunately, the market's strength helped NUE rebound from the $45.00 level (already potential round-number support) and the stock closed back in the green. The play is now open but we would not suggest new positions at this time. Wait and watch for a new failed rally under the $49.00-49.50 region or a new low under $46.00 (or 45.00) again. 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.

Picked on September 25 at $ 45.95
Change since picked: + 1.22
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 4.2 million

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Southern (Peru) Copper - PCU - cls: 87.25 chg: +0.33 stop: 92.51

We saw a similar pattern in PCU. The stock dipped lower this morning only to reverse higher and close in the green. A failed rally under $88.00 would be preferred but odds are we expect PCU to bounce back toward the $90 region. Watch for a failed rally under $90.00 as a new entry point to buy puts. 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.

Picked on September 22 at $ 86.50
Change since picked: + 0.75
Earnings Date 10/16/06 (unconfirmed)
Average Daily Volume = 1.3 million

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FreightCar Amer. - RAIL - close: 54.11 chg: +0.27 stop: 56.32

Railroad-related stocks under performed the market today and RAIL under performed its peers. We remain bearish and traders can choose to open positions here or watch for a failed rally under $55.00 or $56 as a new entry point to buy puts. 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.

Picked on September 21 at $ 54.50
Change since picked: - 0.39
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 353 thousand

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SanDisk - SNDK - close: 54.84 chg: -0.54 stop: 60.05

An analyst downgrade before the opening bell sparked a gap down in SNDK. Shares opened at $54.00 and dipped to $53.15 before bouncing back with the market's rally. It's probably not a coincidence that the low today was near the converging 40-dma, 100-dma and exponential 200-dma. At this time we would expect SNDK to rebound back toward the $56.00-57.50 region. A failed rally under $57.50 could be used as a new entry point to buy puts. 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.

Picked on September 22 at $ 56.69
Change since picked: - 1.85
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 9.9 million

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Textron - TXT - close: 81.61 change: -1.98 stop: 84.01

There is no change from our weekend play description on TXT. We're still waiting for a breakdown under very significant support at the $80.00 level. Our trigger to buy puts is at $79.85. More conservative traders may want to use a trigger around $79.50 to reduce the risk of being triggered on an intraday under $80.00. If triggered we're suggesting two targets. Our first target is the $75.50-75.00 range. Our second target is the $71.00-70.00 region. Plan on selling half or more at the first target to lock in a gain. 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 (confirmed)
Average Daily Volume = 829 thousand

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U.S.Steel - X - close: 54.99 chg: -0.77 stop: 60.05

This morning before the opening bell one analyst firm downgraded shares of X and NUE and raised concerns over rising inventories in the steel industry. Shares of X gapped open lower at $54.80 and traded to $53.63 before bouncing back. Volume was pretty heavy on the session. We remain bearish but there is a good chance that X will see a rebound back toward broke support and what should be new resistance near $56.00-57.00. We'd wait for a failed rally in that range as a new entry point to buy puts.

Picked on September 22 at $ 55.95
Change since picked: - 0.96
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 4.4 million
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

EOG Resources - EOG - close: 63.30 chg: +1.11 stop: 64.15

Crude oil saw a steep intraday dip but managed to rebound strongly as word spread that OPEC might call an "emergency" meeting to discuss production cuts. This lifted the oil stocks out of the read and shares of EOG bounced for a 1.78% gain, which out performed its peers. The stock has not yet broke out above resistance at the $64.00 level but we're going to exit early and avoid or limit our losses.

Picked on September 06 at $ 63.85
Change since picked: - 0.55
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 3.3 million

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Steel Dynamics - STLD - close: 47.22 chg: -0.62 stop: 52.05

Target achieved. This morning the steel industry was under pressure after some negative analyst comments about rising inventories and two downgrades (for X and NUE). Shares of STLD traded down in sympathy with a gap lower and an intraday low of $45.15. STLD bounced back with the rest of the market and the move today, with the rebound from round-number support near $45.00, looks like a short-term bullish reversal. We would expect the bounce to try for the $50 region again, where we would look for the bounce to fail and traders may want to try new put positions again. Our target was the $45.15-45.00 range.

Picked on September 22 at $ 49.40
Change since picked: - 2.18
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 1.5 million
 

Dropped Strangles

None
 

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