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Call Updates

Cymer Inc. - CYMI - close: 45.32 chg: +0.53 stop: 41.95

The SOX index failed to rally again even though its largest component, Intel (INTC), managed to breakout over technical resistance at the $20.00 level on some positive legal news. Shares of CYMI out performed its peers with a 1.18% gain. More importantly the stock actually closed over resistance at the $45.00 level for the first time in months. This relative strength is good news for the bulls! Our target is the $47.00-48.00 range.

Picked on September 06 at $ 42.55
Change since picked: + 2.77
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.0 million

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General Dynamics - GD - close: 71.45 change: -0.61 stop: 69.94

Shares of GD witnessed some early strength this morning with a surge to $72.67, which was a new all-time high for the stock. Unfortunately, the rally quickly failed. Impeding GD's upward trek may be the DFI defense index, which is testing potential resistance near the 1150 level. Looking back to GD we're concerned that today's session is a short-term bearish reversal/failed rally pattern. We are not suggesting new call plays at this time. 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: + 0.84
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Mettler Toledo - MTD - close: 65.59 chg: +0.65 stop: 63.45*new*

MTD continues to show relative strength. The stock added 1% on strong volume but bulls were unable to push MTD convincingly past last week's highs. Currently our target is the $68-69 range. We do not want to hold over the late October earnings report. Please note that we're raising the stop loss to $63.45.

Picked on September 13 at $ 63.66
Change since picked: + 1.93
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 169 thousand

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Omnicom - OMC - close: 94.10 chg: +1.27 stop: 89.89

The rally in OMC has now made it three days in a row. On a technical basis the bounce from $90 has seen improving volume with today's volume coming in pretty strong, which is definitely positive. More conservative traders may want to take some money off the table right now. We continue to aim for the $96.00-97.00 range.

Picked on September 10 at $ 90.97
Change since picked: + 3.13
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Caterpillar - CAT - close: 65.68 chg: -0.22 stop: 67.36

We find it VERY interesting that CAT was unable to produce any sort of follow through higher. The stock's two-day bounce on Monday and Tuesday looked like a big bullish reversal after its recent breakdown under support. Today's relative weakness is encouraging but bears and put holders are not out of danger yet. We're not suggesting new positions with CAT above $65.00. More conservative traders may want to tighten their stops. 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: + 1.08
Earnings Date 10/20/06 (unconfirmed)
Average Daily Volume = 5.2 million

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Express Scripts - ESRX - close: 76.78 chg: -0.93 stop: 82.51

Shares of ESRX continue to under perform. The stock lost 1.19% but after the initial weakness this morning the stock consolidated sideways in a narrow range. The overall pattern is still bearish but we're not suggesting new positions at this time. 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: - 3.07
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Joy Global - JOYG - close: 36.20 change: +0.82 stop: 36.55

The rebound in CAT stalled out today but not so for JOYG. Shares of JOYG added another 2.3% and came relatively close to hitting our stop loss at $36.55. If there is any market strength tomorrow we would expect JOYG to participate and we'll be stopped out.

Picked on September 20 at $ 34.95
Change since picked: + 1.25
Earnings Date 11/30/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Las Vegas Sands - LVS - close: 66.57 change: -1.33 stop: 70.05

Hmm... the trading in LVS on Wednesday was interesting. The stock lost 1.95%, which took a big chunk out of Tuesday's gains. Lack of follow through higher is obviously a good sign for us but we hesitate to suggest new positions right here. The technical picture is blurry. We do not want to hold over the early November earnings report. Currently our target is the $60.50-60.00 range.

Picked on September 19 at $ 65.99
Change since picked: + 0.58
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 2.2 million

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Maxim Integrated - MXIM - close: 27.73 chg: -0.25 stop: 30.05

It looks like the bounce in the SOX is failing and that creates a bit more comfort with adding new put plays in MXIM. However, traders need to be careful here. The SOX index is still inside its two-month rising (bullish) channel. The technical picture is suggesting that the SOX is headed lower tomorrow but we need to be wary of another bounce from the bottom edge of this rising channel. Meanwhile, MXIM is under performing the NASDAQ and the SOX, which is a positive sign for put traders. Today's relative weakness looks like another 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: - 0.18
Earnings Date 11/03/06 (unconfirmed)
Average Daily Volume = 5.4 million

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Nucor - NUE - close: 49.14 change: -0.33 stop: 50.01

We are seeing a bit of a roller coaster ride in the steel stocks. On Tuesday the group soared higher after Reliance Steel (RS) raised its earnings outlook. Yet last night after the closing bell Worthington Industries (WOR -8.9%) missed its earnings estimates and issued cautious comments about business going forward. You may recall that on Monday morning one analyst firm downgraded a couple of stocks in the industry and issued a warning about rising inventory levels. Shares of NUE spiked lower at the open but recovered from its lows. Shares of NUE remain under resistance at the $50 level and its 50-dma. We would wait for another decline under $48.00 or Wednesday's low of 47.27 before considering new put plays. Please note that there seems to be a data malfunction for most of the quote services. If you look up NUE your service will probably say that the stock was up 27 cents to $49.14. Yet if you check the historical prices NUE closed at $49.47 yesterday, which means the stock fell 33 cents today.

Picked on September 25 at $ 45.95
Change since picked: + 3.19
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 4.2 million

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FreightCar Amer. - RAIL - close: 54.74 chg: -0.52 stop: 56.32

RAIL is still under performing its peers in the railroad sector, which is good news for bears and put traders. However, we remain cautious especially with the rally in railroad stocks today. 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: + 0.24
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 353 thousand

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SanDisk - SNDK - close: 54.17 chg: +0.12 stop: 60.05

SNDK did manage to close in the green on Wednesday but overall the trading looks bearish. The stock produced a failed rally under $56.00 and we believe this is a new entry point for bearish positions. We will freely admit this is a tough market to consider buying puts with the major averages trading near new relative highs or all-time highs for the DJIA. If you do open new positions in SNDK you may want to use a tighter stop loss (suggestions would be near $58 or $56). Bear in mind that the DJIA may try and tag a new high before the end of the week so it might pay to just sit on the sidelines and watch for a couple of more days. 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: - 2.52
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 9.9 million

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Textron - TXT - close: 84.69 change: +0.43 stop: 84.01

There is no change from our previous updates on TXT. 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: 58.18 chg: +0.61 stop: 60.05

The game in shares of X is not over yet. Bears were in control a few days ago but bulls staged a big recovery in the last two sessions thanks in large part to positive earnings revisions from Reliance Steel (RS) on Tuesday morning. Yet the rally stalled today due to Worthington Industries (WOR) missing earnings and issuing cautious comments last night. We would wait for a new decline under $56.00 before considering new positions. Conservative traders may want to cut their losses. We still see overhead resistance near $60 with its 50-dma and 200-dma.

Picked on September 22 at $ 55.95
Change since picked: + 2.23
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 4.4 million
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

Southern (Peru) Copper - PCU - cls: 92.50 chg: +1.61 stop: 92.51

We have been stopped out of PCU at $92.51. The rally in mining stocks continued on Wednesday and PCU traded above the $92.50 level to stop us out. The overall pattern continues to look bearish with the double-top formed in August and September but if PCU closes this week out near current levels it will have produced a big bullish engulfing candlestick on the weekly chart, which is typically seen as a bullish reversal pattern. We warned readers from the start that PCU could be volatile and the stock showed us why this week.

Picked on September 22 at $ 86.50
Change since picked: + 6.00
Earnings Date 10/16/06 (unconfirmed)
Average Daily Volume = 1.3 million
 

Dropped Strangles

None
 

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