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Call Updates

Cymer Inc. - CYMI - close: 44.79 chg: +0.39 stop: 41.95

Semiconductor stocks under performed the market today. The SOX index lost ground due to an earnings warning from PMCS. Yet a number of stocks in the group ignored the news and continued to rally higher. INTC was a big leader with a 2.8% rally, but if you look at INTC you'll notice that shares stalled right at significant resistance at the $20.00 level and its 200-dma. Shares of CYMI surged higher this morning and hit $45.77 but pared its gains and closed back under round-number resistance at the $45.00 level. This sort of move looks like a failed rally. We are not suggesting new positions. Our target is the $47.00-48.00 range.

Picked on September 06 at $ 42.55
Change since picked: + 2.24
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.0 million

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General Dynamics - GD - close: 72.06 change: +0.94 stop: 69.94

Defense stocks enjoyed another day of strength with the DFI index rising 0.75% and closing at another four-month high. Shares of GD out performed its peers with a 1.3% gain. The bounce from $70.00 in GD looks bullish but we are a little bit cautious with GD's inability to breakout over the September highs in the $72.30-72.50 region. Our target is the $74.00-75.00 range. We do not want to hold over the mid October earnings report.

Picked on September 24 at $ 70.61
Change since picked: + 1.45
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Mettler Toledo - MTD - close: 64.94 chg: -0.13 stop: 61.99

If you look at just the closing numbers then MTD under performed the market with a loss today. However, if you look at the intraday action in MTD, the session looks more bullish. The stock bounced from the $64.00 level and appears poised to move higher. This actually looks like an entry point to buy calls - or you could wait for a move over today's high at $65.06. If you do open new bullish positions here then you may want to tighten your stop to Friday's low (63.52). 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: + 1.28
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 169 thousand

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Omnicom - OMC - close: 92.83 chg: +1.03 stop: 89.89

The two-day bounce in OMC is doing a lot to improve the technical picture for the stock. Volume came in a little above average on today's gain, which is bullish. The breakout over $92 and its 10-dma is also bullish. Given the market's strength readers may want to buy the bounce in OMC but we'd be extra careful with our stops and be prepared to exit early. We're concerned that this rally may fade heading into the weekend and next week. Our target is the $96-97 range.

Picked on September 10 at $ 90.97
Change since picked: + 1.86
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Caterpillar - CAT - close: 65.90 chg: +1.57 stop: 67.36

We can blame the better than expected consumer confidence numbers if we want to but the bounce in economically sensitive stocks like CAT seems a bit overdone. Actually the rebound is looking rather dangerous! Broken support near $65.00 was supposed to act as new overhead resistance. Tuesday's 2.4% gain and breakout over this level on above average volume is bad news if you're holding puts. We don't see this move as any sort of window dressing. CAT was down about 13% for the quarter at the end of last week so we don't see funds buying the stock to paint their portfolios. If anything they should have been selling. Wait for a new decline under $64.50 before considering new put plays. Aggressive traders could jump in early under $65.00. 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: + 1.31
Earnings Date 10/20/06 (unconfirmed)
Average Daily Volume = 5.2 million

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Express Scripts - ESRX - close: 77.71 chg: +0.72 stop: 82.51

ESRX continues to under perform the market but it's hard for the stock to make any headway lower if the DJIA and S&P 500 are making new relative highs. A failed rally under $80.00 could be used as a new entry point to buy puts. 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: - 2.14
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Joy Global - JOYG - close: 35.38 change: +2.58 stop: 36.55

Ouch! JOYG just erased all of our unrealized gains in one day. JOY, like CAT, is another one of the "economically sensitive" stocks that enjoyed such a strong rally today. The stock's rally did stall near $36.00 and its 10-dma, both levels were expected to offer some resistance. We would hesitate to open new plays at this time but a new decline under $35.00 could be used as an entry point. Our target is the $30.50-30.00 range.

Picked on September 20 at $ 34.95
Change since picked: + 0.43
Earnings Date 11/30/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Las Vegas Sands - LVS - close: 67.90 change: +2.19 stop: 70.05

LVS also enjoyed a strong session with the stock adding 3.3%. The two-day bounce is improving the technical picture for LVS. We are not suggesting new positions at this time and traders may want to think about an early exit since the stock is not cooperating. We do not want to hold over the early November earnings report.

Picked on September 19 at $ 65.99
Change since picked: + 1.91
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 2.2 million

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Maxim Integrated - MXIM - close: 27.97 chg: -0.72 stop: 30.05

Good news! MXIM failed to see any upward follow through on yesterday's bullish reversal. Instead the stock lost 2.5% and closed back under support at the $28.00 level. The weakness was probably sympathy pains for fellow semiconductor company PMCS who issued a profit warning today. While this may look like a new entry point to buy puts in this market we would be hesitant to open new bearish plays until the market rally runs out of steam. 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: + 0.07
Earnings Date 11/03/06 (unconfirmed)
Average Daily Volume = 5.4 million

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Nucor - NUE - close: 49.47 change: +2.30 stop: 50.01

After yesterday's bullish reversal from support near $45.00 we kind of expected a bounce in NUE today. Unfortunately, we didn't expect such a big bounce with a 4.8% gain on above average volume. It was only yesterday morning that the stock was downgraded and one analyst was voicing their concern over high inventory levels. It seems that NUE and most of the steel-industry stocks are surging higher today after Reliance Steel (RS) issued a positive earnings warning by raising their earnings forecast. If there is any good news here it is that the rally stalled under round-number resistance at $50.00 and technical resistance at the 50-dma. The bad news is that shorts might get scared and NUE could see more short covering. We would wait for a new decline under $48.00 before considering new bearish positions. Our target is the $40.50-40.00 range. We do not want to hold over the mid October earnings report.

Picked on September 25 at $ 45.95
Change since picked: + 3.52
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 4.2 million

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Southern (Peru) Copper - PCU - cls: 90.89 chg: +3.64 stop: 92.51

Same story, different stock. Shares of PCU rallied sharply following yesterday's intraday bullish reversal. Volume came in above the daily average, which is bad news for the bears. We expected a bounce towards $90.00 not a breakout over $90.00. The rally did stall under resistance near $92.00 but we're in a dangerous position here. More conservative traders may want to cut their losses now. We are not suggesting new positions. 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.

Picked on September 22 at $ 86.50
Change since picked: + 4.39
Earnings Date 10/16/06 (unconfirmed)
Average Daily Volume = 1.3 million

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FreightCar Amer. - RAIL - close: 55.26 chg: +1.15 stop: 56.32

Shares of RAIL were caught up in the transports/railroad stock rally on Tuesday. The stock added 2.1% but remains under resistance near $56 and its 100-dma. We are not suggesting new positions at this time. 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: + 0.76
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 353 thousand

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SanDisk - SNDK - close: 54.05 chg: -0.79 stop: 60.05

SNDK failed to rally with the rest of the market on Tuesday and this show of relative weakness is good news for the bears. Unfortunately, if the market continues to rally we would expect SNDK to eventually join it. 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: - 2.64
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 9.9 million

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Textron - TXT - close: 84.26 change: +1.92 stop: 84.01

We are still sitting on the sidelines waiting for a breakdown under the $80.00 level. More aggressive traders might want to consider plays on a failed rally under $85.00. If triggered at $79.85 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: 57.57 chg: +2.58 stop: 60.05

Reversal alert! Two days ago (Friday) shares of X were looking pretty bearish with a breakdown under support near $56.00. Monday came and the stock gapped lower after an analyst downgrade yet shares bounced back sharply due to a strong market rally. Now the rally in the markets and shares of X continues with volume coming in above average for X. This isn't window dressing since X would qualify as a loser for the third quarter. It seems that X and most of the steel-industry stocks are surging higher today after Reliance Steel (RS) issued a positive earnings warning by raising their earnings forecast. We have to warn readers that the three-day candlestick pattern is another bullish reversal and given the volume on the bounce it would suggest more upside to come. Conservative traders may want to cut their losses. We still see overhead resistance near $60 with its 50-dma and 200-dma so we're going to keep the play open for now.

Picked on September 22 at $ 55.95
Change since picked: + 1.62
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 4.4 million
 

Strangle Updates

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Dropped Calls

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Dropped Puts

Burlington Nor.SantaFe - BNI - cls: 71.23 chg: +2.03 stop: 71.01

We have been stopped out of BNI at $71.01. Railroad stocks rallied strongly on Tuesday with a 2.8% gain in the Dow Jones railroad index and this contributed a lot to the Dow Transports 2.5% gain. Shares of BNI added 2.9% on strong volume to breakout over potential resistance at the 10-dma, the $70.00 level, the exponential 200-dma and its five-month trendline of lower highs. If shares trade over $72.50 readers may want to consider bullish positions just be careful with potential resistance at $75.00 and its simple 200-dma.

Picked on September 22 at $ 67.75
Change since picked: + 3.48
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.8 million
 

Dropped Strangles

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