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Call Updates

Ambac Fincl. - ABK - close: 84.23 chg: -0.58 stop: 81.99

We have been suggesting that ABK would find short-term support at the $84.00 level. The stock pulled back again toward the $84 region this afternoon, which is also bolstered by support at its 50-dma. Bulls need to see a bounce from here and we would definitely wait for some sign of a bounce from here before initiating new positions. Our target is the $88.00-90.00 range. We do not want to hold over the October 25th earnings report.

Picked on October 04 at $ 84.40
Change since picked: - 0.17
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 819 thousand

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Amgen Inc. - AMGN - close: 73.73 change: -0.19 stop: 69.99

Biotechs could be in for a dip. AMGN spent the day consolidating sideways again on low volume. Investors were probably waiting on earnings news from rival Genentech (DNA). DNA reported Q3 earnings after the bell tonight and beat estimates but the stock was trading lower in after hours. AMGN might trade lower in sympathy tomorrow in spite of DNA's positive results and positive guidance. At this point in the game we'd wait for a bounce from the 10-dma or the $72 region before considering new positions. Our target is the $79.00-80.00 range. We do not want to hold over the October 23rd earnings. FYI: More conservative traders might want to adjust their stop loss closer to the $72 level.

Picked on October 04 at $ 72.97
Change since picked: + 0.76
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 7.8 million

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Deere & Co. - DE - close: 87.20 change: -0.80 stop: 82.99

Shares of DE plunged about $1.50 just after high noon today. We caught the tail end of some comments on CNBC about the weakness in DE and it sounded like there was a report on lower tractor sales. We couldn't find any news to confirm those comments. Fortunately, for the bulls traders bought the dip in DE at the $86.00 level. We're not suggesting new positions and more conservative traders might want to adjust their stop loss toward the $85 level. Our target is the $89.50-90.00 range. We do not want to hold over the November earnings report. FYI: The P&F chart points to a $108 target.

Picked on October 04 at $ 85.39
Change since picked: + 1.81
Earnings Date 11/14/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Emerson Electric - EMR - close: 84.45 chg: -0.61 stop: 82.99

Tuesday failed to see any upward follow through on EMR's bounce from the 10-dma on Monday. Unfortunately, today's weakness puts more of a bearish curve on some of the short-term technicals. In the last week EMR has seen three false starts over the $85 level and it looks like the move may have been a bull trap. More conservative traders may want to consider an early exit given today's lack of follow through. At this point we're expecting a dip back toward short-term support near $83.00. We're not suggesting new plays with EMR under $85.25. 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: - 0.70
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Entergy - ETR - close: 81.88 change: +1.20 stop: 78.99 *new*

Tuesday proved to be a strong session for ETR. The stock soared to new highs with a 1.48% gain. The relative strength is definitely encouraging and shares look poised to continue higher. Our short-term target is the $84.00 level. We do not want to hold over the late October earnings report. FYI: We are raising our stop loss to $78.99.

Picked on October 03 at $ 80.33
Change since picked: + 1.55
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Greenbrier - GBX - close: 29.79 change: -0.16 stop: 27.99

We are starting to wonder about the rally in GBX. Another drop in oil prices today helped the Dow Transportation average add 1.28%. The railroad index rose just over 1.1%. Yet shares of GBX under performed with a 0.5% decline. Volume came in very low today so it's hard to put any weight behind today's move, which was mostly flat. The overall pattern remains bullish but more conservative traders may want to wait for a move over today's high (30.23) before initiating new positions. 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. More conservative traders could always tighten their stops - we'd consider moving ours toward the $29 level.

Picked on October 05 at $ 30.05
Change since picked: - 0.26
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 310 thousand

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Mettler Toledo - MTD - close: 66.45 chg: +0.08 stop: 64.95

There is no change from our previous update on MTD. We're still not suggesting new positions and more conservative traders may want to lock in a gain now. Many of the technical indicators are suggesting that the next move will be lower. The daily chart's MACD indicator actually produced a new sell signal on Tuesday. 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: + 2.79
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 169 thousand

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Omnicom - OMC - close: 94.98 chg: +0.96 stop: 92.95

OMC displayed another day of relative strength on Tuesday. The stock climbed more than 1% on above average volume after investors digested some positive comments coming from industry insiders on the ad industry's ability to weather any future downturn. Shares look poised to move higher but more conservative traders may still want to lock in some gains here. Our target is the $96.00-97.00 range. We do not want to hold over the late October earnings. FYI: The P&F chart points to a $131 target.

Picked on September 10 at $ 90.97
Change since picked: + 4.01
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Sepracor - SEPR - close: 50.90 chg: +0.11 stop: 47.95

It was another day of indecision with SEPR. The stock traded sideways flirting on either side of resistance at the $51.00 level and its 200-dma. Lack of follow through higher on yesterday's breakout doesn't help off set the stock's short-term overbought condition. More aggressive traders may want to consider buying a bounce near $50.00. We are not suggesting new plays with the stock under $51.00. The stock's failure to hold its early gains actually looks a little bearish! Our target is the $55.50-56.00 range. We do not want to hold over the late October earnings report. We'll leave the stop loss at $47.95 for now. FYI: The latest (September) data put short interest at more than 13% of SEPR's 108 million-share float. That's a relatively high amount of short interest.

Picked on October 09 at $ 51.25
Change since picked: - 0.35
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.3 million

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Unibanco - UBB - close: 81.95 change: +2.24 stop: 76.45 *new*

The rally in UBB has reached its fifth day in a row. The stock gapped open higher and closed with a 2.8% gain to breakout past potential round-number resistance at the $80.00 level. The stock is starting to look a little overbought here. Readers may want to wait for a dip back toward $80 before considering new positions. Please note that we're raising the stop loss to $76.45. Our target is the $85.00-86.00 range. We do not want to hold over the early November earnings report.

Picked on October 08 at $ 79.12
Change since picked: + 2.83
Earnings Date 11/09/06 (unconfirmed)
Average Daily Volume = 796 thousand

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Vulcan Materials - VMC - close: 81.45 chg: +1.40 stop: 76.95

Good news! VMC finally broke out over resistance at the $80 level with some confidence. Volume wasn't so hot but shares close near their best levels of the session. The move back over $80.26 or $80.50 could have been used as a new entry point to buy calls. Our target is the $84.50-85.00 range. We do not want to hold over the late October earnings report.

Picked on October 09 at $ 80.26
Change since picked: + 1.19
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 843 thousand
 

Put Updates

FreightCar Amer. - RAIL - cls: 52.88 chg: +0.78 stop: 54.55

Another decline in crude oil prices on Tuesday helped fuel the rally in transportation stocks. RAIL, which has been under performing its peers the last couple of weeks, is starting to bounce. We are not suggesting new positions at this time. More conservative traders may want to strongly consider tightening their stops toward the $53.50 region. Currently we have two targets on RAIL since the stock 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: - 2.14
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 353 thousand
 

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: 104.75 chg: -0.48 stop: n/a

BXP's early morning attempt to breakout over resistance near $106 failed. While the failed rally is bearish traders were quick to buy the dip this afternoon at $103.40. We're not suggesting new strangle positions at this time. The play was labeled as aggressive and higher risk due to our short three-week time frame. We need to exit before October options expire on October 21st. 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.

Picked on October 01 at $103.34
Change since picked: + 1.41
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 694 thousand

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Google - GOOG - close: 426.50 chg: - 2.50 stop: n/a

GOOG finally hit some profit taking after spiking to $437.85 this morning on the YouTube.com acquisition news that came out last night. Today's session definitely looks like a short-term top and we'll be watching the $420 level and $410 level as potential levels of support. We're not suggesting new strangle plays at this time. 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. FYI: The November $440 call is already trading at $17.40ask/$17.00bid.

Picked on October 01 at $401.90
Change since picked: +24.60
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 5.6 million

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Legg Mason - LM - close: 105.31 change: +3.23 stop: n/a

The volatility in LM continues. Here's the odd thing. Shares of LM soared 3.1% after issuing an earnings warning for the third quarter. Today marks a breakout over the top of its recent consolidation and a new four-month high. We're not suggesting new strangle positions at this time but a dip back near the $100 mark could be used as an entry point. 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: + 5.59
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.4 million
 

Dropped Calls

None
 

Dropped Puts

Maxim Integrated - MXIM - cls: 28.60 chg: +0.07 stop: 29.05

We are calling it quits on MXIM as a put candidate and suggesting readers exit early. The stock is still trading under resistance at its 50-dma and the $29.00 level but the stock has developed a short-term pattern of higher lows over the last few days. We would rather exit now and cut our losses early. It might pay off to keep an eye on MXIM. A move over $30.00 might be a bullish entry point and a decline under $27.50 could be used as a new bearish entry point.

Picked on September 25 at $ 27.90
Change since picked: + 0.70
Earnings Date 11/03/06 (unconfirmed)
Average Daily Volume = 5.4 million
 

Dropped Strangles

None
 

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