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Call Updates

Ambac Fincl. - ABK - close: 84.98 chg: +0.75 stop: 81.99

Wednesday proved to be a bullish day for ABK. Traders bought the dip early this morning near $83.75 and the stock rallied over $85 on an intraday basis late this afternoon. Readers can choose to go long new call positions on today's strength or if you're feeling more conservative wait for a move over today's high (85.12) before initiating new plays. 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: + 0.58
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 819 thousand

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Amgen Inc. - AMGN - close: 73.47 change: -0.26 stop: 69.99

The profit taking (consolidation) in AMGN continues. Shares dipped to $72.54 near its 10-dma before bouncing back and recovering most of its losses. More aggressive traders may want to consider new positions now. We like the bounce from its 10-dma but AMGN does still have a very short-term trend of lower highs. It might pay to wait for a new move over $74.00 before initiating 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: + 0.50
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 7.8 million

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Peabody Energy - BTU - close: 40.12 chg: +0.23 stop: 37.24

We did not have to wait very long for BTU to hit our trigger. The stock continued higher on Wednesday and broke out over round-number resistance at the $40.00 level. Our suggested trigger to buy calls was at $40.05. Volume on the move was pretty strong, which is another bullish sign. We are a little bit concerned that the breakout over $40 didn't see more follow through higher but the trend is still positive. Our target is the $43.25-45.00 range. We have a low target for two reasons. We're short on time and the $43.30 level was support in the past so it will likely offer some resistance moving ahead. The time frame issue is also a challenge. We only have five trading days. BTU is due to report earnings on the morning of Oct. 19th and we do not want to hold over the report. So we must exit on the 18th. If you don't like the time frame issue check out these stocks in the sector: ACI, FDG, JRCC, FCL.

Picked on October 11 at $ 40.05
Change since picked: + 0.07
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 5.8 million

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Beazer Homes - BZH - close: 41.90 change: -0.40 stop: 39.85

Housing stocks suffered some profit taking on Wednesday following Tuesday's strong session. Shares of BZH closed down 0.9% but not before spike higher this morning above resistance at its 100-dma and hitting our trigger to buy calls at $42.75. The play is now open and our target is the $49.00-50.00 range. However, we would hesitate to open new positions at this time. Today's session is essentially a failed rally at the 100-dma. We'd expect a dip back toward the $40 level and its 50-dma, which should offer some support. Readers can choose to wait and buy a bounce from the $40 region or wait for a new relative high above $42.82 (today's intraday high). We do not want to hold over the early November earnings report. FYI: If BZH trades over $43.00 it will produce a new Point & Figure chart buy signal.

Picked on October 11 at $ 42.75
Change since picked: - 0.85
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.3 million

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Carpenter Tech. - CRS - cls: 108.68 chg: -0.63 stop: 104.95

Watch out! We got a bad entry this morning. The stock gapped open lower, suddenly shot higher over resistance to $110.65, and then just as quickly turned lower again. We were suggesting a trigger to buy calls at $110.51. Today's move is a failed rally and traders need to play defensively. We would wait for a bounce from the $106 region or a new high above $110.65 before considering new positions. More conservative traders may want to wait for a move past $112.00 near the September high. Our target is the $118.00-120.00 range. Unfortunately, we don't have a lot of time. CRS is due to report earnings in just a couple of weeks. We do not want to hold over the report. FYI: We want to remind readers that CRS can be volatile so consider this an aggressive play.

Picked on October 11 at $110.51
Change since picked: - 1.83
Earnings Date 10/23/06 (unconfirmed)
Average Daily Volume = 754 thousand

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Deere & Co. - DE - close: 87.37 change: +0.17 stop: 82.99

DE has been somewhat volatile the last few days and today was no exception. Shares gapped open lower only to quickly rebound and challenge the recent highs. Unfortunately DE closed off its best levels of the day giving this more of a failed-rally type of feel to the session. 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: + 1.98
Earnings Date 11/14/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Emerson Electric - EMR - close: 83.80 chg: -0.65 stop: 82.99

The closing numbers fail to tell the whole story with EMR. Shares gapped open lower under minor support at $84 and short-term support at its 10-dma. The stock dipped to the $83 level midday only to bounce back. The low today was $83.01 versus our stop loss at $82.99. The weakness today has definitely but a bearish curve into some of the technical indicators. Of course we warned readers yesterday to expect a dip toward $83.00. We're not suggesting new plays with EMR under $85.25 at this time. 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: - 1.35
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Entergy - ETR - close: 81.35 change: -0.53 stop: 78.99

Traders decided to lock in some profits this morning in ETR but by the afternoon the stock was already bouncing again. We don't see any changes from our previous updates. 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: + 1.02
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Greenbrier - GBX - close: 29.42 change: -0.37 stop: 27.99

We are really starting to worry about the rally in GBX. The bullish breakout that began last week is now in jeopardy. Volume has continued to come in light on the pull back but that doesn't change that GBX has been struggling. More conservative traders may want to put their stop loss under today's low near $29.00. The stock bounced twice from this level today near its 100-dma. Maybe this will hold as support. We're raising our stop loss to $28.49. We're not suggesting new positions at this time. Wait for a move over $30.30. 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: - 0.63
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 310 thousand

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Mettler Toledo - MTD - close: 66.45 chg: +0.008 stop: 64.95

MTD closed unchanged on the session after spending the day in a narrow 40-cent range. 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: 94.50 chg: -0.48 stop: 92.95

We do not see any changes from our previous updates on OMC. We're not suggesting new positions and more conservative traders may want to lock in a gain now. 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: + 3.53
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million

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Sepracor - SEPR - close: 52.19 chg: +1.29 stop: 49.90 *new*

SEPR bucked the general downtrend today. Traders were quick to buy the dip near $50.00 this morning and the stock soared to a new three-month high. Today's session looks like a strong confirmation of the bullish breakout over resistance at the $51.00 level and its 200-dma. Our target is the $55.50-56.00 range. We do not want to hold over the late October earnings report. Please note that we're adjusting the stop loss to $49.90. 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: + 0.94
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 2.3 million

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Unibanco - UBB - close: 80.85 change: -1.10 stop: 76.45

We cautioned readers yesterday that UBB looked due for a dip. The stock bounced from its initial test of the $80 level this morning but the pull back may not be over yet. Keep an eye on the rising 10-dma as its next level of potential support. 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: + 1.73
Earnings Date 11/09/06 (unconfirmed)
Average Daily Volume = 796 thousand

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Vulcan Materials - VMC - close: 81.34 chg: -0.11 stop: 76.95

There is no change from our previous update on VMC. The stock was rebounding from its intraday lows this afternoon and we'd use the dip 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: + 1.08
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 843 thousand
 

Put Updates

FreightCar Amer. - RAIL - cls: 52.45 chg: -0.43 stop: 54.55

RAIL spent the session consolidating sideways. If anything the trading looked bearish with the drop from its intraday highs. 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: - 2.05
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: 103.89 chg: -0.86 stop: n/a

BXP produced another failed rally near the $106 level today. The current trend may be bullish but BXP might be in the process of forming a top. Technical indicators are deteriorating into bearish signals. 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: + 0.55
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 694 thousand

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Google - GOOG - close: 426.50 chg: - 0.15 stop: n/a

We do not see any changes from our previous update on GOOG. 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
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

Legg Mason - LM - close: 87.15 change: -18.16 stop: n/a

Target achieved. It was a big day for LM. The company issued an earnings warning this morning. Investors reacted strongly and LM gapped down to open at $91.70 and then plunged to a 17% loss. The put side of our strangle was the November $95 put (LM-WS). The put opened at $7.70 and closed at $8.70. We had a target of $7.25 to close the position.

Picked on October 03 at $ 99.72
Change since picked: -12.57
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.4 million
 

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