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Call Updates

Ambac Fincl. - ABK - close: 84.86 chg: +0.46 stop: 81.99

The rally in ABK continues. The stock added another 0.5% although we noticed that volume continues to come in below average on this rally. Short-term technicals look good. We don't see any changes from yesterday's play description. Our target is the $88.00-90.00 range. We do not want to hold over the October 25th earnings report. FYI: The P&F chart points to a $102 target.

Picked on October 04 at $ 84.40
Change since picked: + 0.46
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 819 thousand

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Amgen Inc. - AMGN - close: 74.73 change: +1.76 stop: 69.99

Positive analyst comments on Thursday added fuel to the fire in AMGN following yesterday's bullish breakout. The stock added another 2.4% on strong volume. We don't see any changes from yesterday's new play description. Our target is the $79.00-80.00 range. We do not want to hold over the October 23rd earnings.

Picked on October 04 at $ 72.97
Change since picked: + 1.76
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 7.8 million

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Deere & Co. - DE - close: 87.55 change: +2.16 stop: 82.99

Construction and machinery stocks got a lift today following some positive analyst comments on CAT. Shares of DE added 2.5% today on top of yesterday's bullish breakout. We don't see any changes from yesterday's new play description. Our target is the $89.50-90.00 range. We do not want to hold over the November earnings report.

Picked on October 04 at $ 85.39
Change since picked: + 2.16
Earnings Date 11/14/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Emerson Electric - EMR - close: 84.83 chg: +0.06 stop: 82.99

Our new play in EMR is now open. The stock spiked over resistance at the $85.00 level this morning and hit our trigger to buy calls at $85.15. Unfortunately, EMR failed to hold those gains and pulled back from its highs. The larger pattern is still bullish but we hesitate to open new positions with the stock under $85.00. Our target is the $89.00-90.00 range. We do not want to hold over the late October earnings report.

Picked on October 05 at $ 85.15
Change since picked: - 0.32
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Entergy - ETR - close: 80.36 change: -0.09 stop: 77.99

Shares of ETR continued trading sideways for a second day. We see today's bounce from the $80.00 level as a new entry point to buy calls. Our short-term target is the $84.00 level. We do not want to hold over the late October earnings report.

Picked on October 03 at $ 80.33
Change since picked: + 0.03
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Greenbrier - GBX - close: 30.77 change: +1.07 stop: 27.99

Transport stocks and railroads continued to rally on Thursday. Shares of GBX out performed many of its peers with a 3.6% gain and a bullish breakout through resistance at the top of its trading range near $30.00. Our suggested trigger to buy calls was at $30.05. Now that the play is open our target is the $33.00-34.00 range. We do not want to hold over the early November earnings report. FYI: The P&F chart is still bearish but it's seeing a strong bounce near support.

Picked on October 05 at $ 30.05
Change since picked: + 0.72
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 310 thousand

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Mettler Toledo - MTD - close: 66.55 chg: +0.25 stop: 63.66

Be careful here with MTD. The stock spiked to an intraday high of $67.22 and then quickly reversed. This pattern looks like a short-term top. More conservative traders may want to exit early. We're not suggesting new positions. 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: + 2.89
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 169 thousand

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Omnicom - OMC - close: 93.68 chg: -0.08 stop: 89.89

OMC has been trading sideways the last five days. Hopefully the stock will breakout soon. If you look at the intraday trading it looks like OMC wants to breakout higher. However, the lack of upward momentum is turning the technical indicators bearish. We are not suggesting new positions at this time. Our target is the $96.00-97.00 range. We do not want to hold over the late October earnings.

Picked on September 10 at $ 90.97
Change since picked: + 2.71
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Vulcan Materials - VMC - close: 79.92 chg: +0.70 stop: 76.95

There is no change from yesterday's new play description for VMC. The stock continued to rally on Thursday but stalled out near resistance at $80.00. We are suggesting that readers wait for a breakout over $80 with a trigger to buy calls at $80.26. If triggered our target is the $84.50-85.00 range. We do not want to hold over the late October earnings report.

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 843 thousand

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Put Updates

Chipotle - CMG - close: 50.12 change: -0.87 stop: 52.61

The tug of war between the bulls and bears in CMG continued on Thursday. Yesterday's rally reversed course with a Thursday morning drop to a new relative low (48.30). Unfortunately, the stock quickly bounced back to recover a significant portion of its decline. This volatility might somehow be associated with the McDonald's CMG spin-off news. MCD previous announced it was spinning of the remainder of its 51% stake in CMG. MCD is offering its shareholders 0.8879 shares of CMG class B common stock for each share of MCD. The final calculated value of CMG's class B shares was set at $49.95375. According to the Reuters article this exchange offer was due to expire tonight. Given the market's current strength we would hesitate about opening new bearish plays in CMG at this time. We do not want to hold over the late October earnings report.

Picked on September 28 at $ 49.45
Change since picked: + 0.67
Earnings Date 10/30/06 (unconfirmed)
Average Daily Volume = 459 thousand

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Maxim Integrated - MXIM - cls: 28.36 chg: -0.47 stop: 29.21

We find it very interesting that the semiconductors are under performing. The sector index (SOX) failed to bounce back into its rising channel. Shares of MXIM followed suit and failed to rally past short-term resistance at the $29.00 level. Yet even with today's show of weakness we are not suggesting new put plays in MXIM.

Picked on September 25 at $ 27.90
Change since picked: + 0.46
Earnings Date 11/03/06 (unconfirmed)
Average Daily Volume = 5.4 million

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FreightCar Amer. - RAIL - close: 52.10 chg: -0.54 stop: 56.32

RAIL is still under performing and the stock lost another 1% on rising volume. We cannot tell you why RAIL is under performing its peers in the railroad sector and while the weakness is encouraging we are suggesting caution. A bullish market and sector make it a tough environment for bearish plays. We're not suggesting new positions at this time. We're suggesting two targets because RAIL appears to have some support near $50.00. 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. The P&F chart points to a $42 target.

Picked on September 21 at $ 54.50
Change since picked: - 2.38
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 353 thousand

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Strangle Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

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Boston Properties - BXP - close: 105.46 chg: +1.11 stop: n/a

BXP posted another gain and shares are now challenging resistance near $106. We're not suggesting new strangle positions at this time. Our suggested options were the October $105 call (BXP-JA) and the October $100 put (BXP-VT). Our estimated cost is about $1.90. We're suggesting an exit if either option rises to $3.80 or higher. Remember, this is an aggressive play due to our three-week time frame. October options expire in less than three weeks.

Picked on October 01 at $103.34
Change since picked: + 2.12
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 694 thousand

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Google - GOOG - close: 411.81 chg: - 3.89 stop: n/a

GOOG's strength for yesterday carried over into Thursday morning and the stock hit a new three-week high at $418.24 before rolling over into the afternoon. The stock is outside of our suggested entry range to open strangle positions so we're not suggesting new plays. The options in our strangle strategy are the November $440 call (GOP-KH) and the November $360 put (GGD-WL). Our estimated cost for this position is about $13.00. Our suggested exit is at $24.00 or higher.

Picked on October 01 at $401.90
Change since picked: + 9.91
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 5.6 million

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Legg Mason - LM - close: 103.75 change: +1.75 stop: n/a

So far so good. LM continues to rally and today's gain is a breakout over short-term resistance at the $102 level. The stock is outside of our suggested entry range to open strangle plays so we're not suggesting new positions. The options in our strangle strategy are the November $105 calls (LM-KA) and the November $95.00 put (LM-WS). Our estimated cost is $5.15. We're suggesting an exit if either options rises to $7.25.

Picked on October 03 at $ 99.72
Change since picked: + 4.03
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Dropped Calls

None Today.

Dropped Puts

Caterpillar - CAT - close: 68.24 chg: +2.70 stop: 67.36

We have been stopped out of CAT at $67.36. This morning the stock surged higher after Merrill Lynch said that CAT was one of ten U.S. companies that would do well given the economic strength outside the U.S. (source:CBSMW). After midday, when it was apparent that CAT would not quickly turn lower the buying (or short covering) continued and the stock broke out over resistance at its 50-dma and its trend of lower highs.

Picked on September 21 at $ 64.59
Change since picked: + 3.65
Earnings Date 10/20/06 (unconfirmed)
Average Daily Volume = 5.2 million

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Phelps Dodge - PD - cls: 82.76 chg: +4.11 stop: 82.15

We have been stopped out of PD at $82.15. Today was a strong day for commodities. Crude oil, gold and copper all rose. Copper futures soared over 7 cents to $3.277 a pound. Copper got a boost from some positive analyst comments and PD got a boost from new coverage at an "overweight" rating. We warned readers that PD could be volatile but it's still frustrating to see the stock produce a sell signal with the breakdown under $80.00, its 200-dma and its long-term trendline of support and then suddenly reverse higher.

Picked on October 04 at $ 78.45
Change since picked: + 4.31
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 5.1 million

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U.S.Steel - X - close: 60.63 chg: +4.68 stop: 60.05

We have been stopped out of X at $60.05. This morning before the bell Bank of America came out with some really strong comments on X and suggested that investors add to their positions. Traders reacted sharply and shares of X soared out of the gate with a gap higher to $57.01 and then a rally past resistance.

Picked on September 22 at $ 55.95
Change since picked: + 4.68
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 4.4 million
 

Dropped Strangles

None Today.

Play Update Archives