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Call Updates

Ambac Fincl. - ABK - close: 85.43 chg: +0.24 stop: 83.45

Shares of ABK gapped down at the open this morning but managed to rebound thanks in part to one analyst upping their price target on ABK from $90 to $92. Traders bought the dip near $84.50 this morning, which was our last suggested entry point to buy calls. We only have about a week and a half before ABK reports earnings on Oct. 25th. We do not want to hold over the announcement. Our target is the $88.00-90.00 range.

Picked on October 04 at $ 84.40
Change since picked: + 1.03
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 819 thousand

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BP Prudhoe Bay - BPT - close: 72.50 chg: +0.50 stop: 72.45

BPT managed to bounce on Tuesday while the rest of the oil sector slid lower. The stock is still under resistance at $75 and its 50-dma and 200-dma. We're still suggesting a trigger to open positions at $75.05, above resistance at the $75.00 level. If triggered our target is the $79.00-80.00 range. FYI: A move over $75 would produce a new Point & Figure chart buy signal.

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 421 thousand

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Peabody Energy - BTU - close: 41.55 chg: -0.84 stop: 39.99*new*

Coal stocks hit some profit taking on Tuesday after nearly three weeks of gains. Shares of BTU lost 1.98%. Don't forget that we plan to exit tomorrow (Wednesday) at the closing bell to avoid holding over the company's earnings report on Thursday morning. We're upping the stop loss to $39.99.

Picked on October 11 at $ 40.05
Change since picked: + 1.50
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 5.8 million

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Beazer Homes - BZH - close: 41.74 change: -0.56 stop: 39.85

Homebuilders continued to struggle on Tuesday even though the homebuilder confidence index managed to tick higher after eight months of declines. We are concerned about the lack of upward momentum. If you're not willing to endure a pull back toward support near $40 and its 50-dma then you may want to exit early right here. We'd watch for a bounce near $41.00 or $40.00 as the next entry point to buy calls. Our target is the $49.00-50.00 range. We do not want to hold over the early November earnings report.

Picked on October 11 at $ 42.75
Change since picked: - 1.01
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 1.3 million

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Carpenter Tech. - CRS - cls: 113.59 chg: -0.21 stop: 104.95

Steel-related stocks also suffered some profit taking on Tuesday but traders bought the dip and shares of CRS managed to recoup most of its losses. The profit taking may not be over yet. Readers can watch for a dip toward $110 as a potential entry point (or if you prefer a bounce from $110). Our target is the $118.00-120.00 range. Don't forget we plan to exit ahead of the October 26th earnings report.

Picked on October 11 at $110.51
Change since picked: + 3.08
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 754 thousand

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Devon Energy - DVN - close: 66.50 chg: -0.51 stop: 60.95

Oil stocks were really strong on Monday but the group suffered some profit taking on Tuesday. Readers can use this dip as a new entry point although it might pay off to wait for a dip back toward the $65 region. Our target is the $69.50-70.00 range. We do not want to hold over the November 1st earnings report. FYI: The P&F chart is bullish with a $78 target.

Picked on October 15 at $ 64.72
Change since picked: + 1.78
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 5.6 million

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Emerson Electric - EMR - close: 85.84 chg: -0.15 stop: 82.99

EMR also suffered some profit taking on Tuesday but the intraday chart shows that traders were buying dips in the $85.50-85.65 range all day long. This may prove to be a new entry point to buy calls. Our target is the $89.00-90.00 range. FYI: In the news today EMR announced it was reporting earnings on November 7th. We do not want to hold over the event.

Picked on October 05 at $ 85.15
Change since picked: + 0.69
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 1.5 million

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EOG Resources - EOG - close: 66.20 chg: -1.03 stop: 63.95

It's the same story with EOG. A pull back in crude oil futures had traders selling to lock in some profits after yesterday's big move. The intraday chart shows a nice bounce from today's low at $65.35, which is very close to the exponential 200-dma. Our short-term target is the $69.50-70.00 range. More aggressive traders may want to aim higher but watch out for the 200-dma. We do not want to hold over the October 31st earnings report.

Picked on October 16 at $ 66.05
Change since picked: + 0.15
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 3.6 million

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Fortune Brands - FO - close: 75.40 chg: -1.21 stop: 73.99

Ouch! FO lost 1.5% on Tuesday. More importantly this looks like a bearish reversal following the recent bullish breakout over resistance near $76 and its 200-dma. More conservative traders may want to cut their losses now. We couldn't find any specific news to account for the spike lower this morning. We're not suggesting new positions at this time. Wait for a new move over $76.25 or higher. Our target is the $79.90-80.00 range. We do not want to hold over the late October earnings report.

Picked on October 13 at $ 76.26
Change since picked: - 0.86
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 745 thousand

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Frontier Oil - FTO - close: 28.94 change: -0.77 stop: 25.99

Be ready! We told readers in our initial description that FTO would likely encounter resistance at the $30.00 level. Right on cue the stock produced a failed rally with its jump to $29.99 this morning. Today's move also produced a bearish engulfing candlestick pattern. We expect a dip back toward the $28.00 level and maybe the $27.50 region. We would wait for signs of a bounce to begin before considering new call positions. Our target is the $32.50-33.00 range. We do not want to hold over the early November earnings report. FYI: The P&F chart is still bearish for FTO.

Picked on October 15 at $ 28.90
Change since picked: + 0.04
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 3.2 million

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NCI Building Sys. - NCS - cls: 61.50 chg: +0.25 stop: 57.99

Traders bought the dip this morning in NCS and the stock displayed relative strength by posting another gain. The MACD on the daily chart is very close to a new buy signal. We're still suggesting new positions. Our target is the $67.00-70.00 range.

Picked on October 16 at $ 61.26
Change since picked: + 0.24
Earnings Date 11/29/06 (unconfirmed)
Average Daily Volume = 386 thousand

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Rockwell Automation - ROK - cls: 61.13 chg: -1.13 stop: 59.45

The profit taking in ROK shook the stock for a 1.8% loss on Tuesday. Volume came in pretty low, which is what we would want to see on a pull back. Readers can choose to buy the dip here or wait for a potential pull back toward the 10-dma near $60.50 or even the $60.00 level. Yesterday we were (and still are) suggesting a dip to $61 as a new entry point. Our target is the $64.90-66.00 range. We do not want to hold over the early November earnings report. FYI: The P&F chart points to a $76 target.

Picked on October 12 at $ 60.86
Change since picked: + 0.27
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Sepracor - SEPR - close: 52.32 chg: +0.06 stop: 49.90

We do not see any changes from our previous updates on SEPR. We're not suggesting new positions due to our dwindling time frame. Odds of a dip back toward the 10-dma and 200-dma near $50.75-51.00 are probably pretty good. Our target is the $55.50-56.00 range. Don't forget that we plan to exit ahead of the earnings report.

Picked on October 09 at $ 51.25
Change since picked: + 1.07
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 2.3 million

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Unibanco - UBB - close: 79.76 change: -2.14 stop: 76.45

The profit taking in financials was pretty mild in the states but Brazilian ADR UBB was hit harder with a 2.6% decline. One Reuters article said that UBB had reported earnings today, which would suggest today's loss was a "sell the news" reaction. Yet we checked the normal news channels and didn't find any earnings news on UBB. We also checked the company's website and didn't find any news about reporting earnings today. According to our sources UBB isn't expected to report earnings until early November. Whatever the case today's decline is bearish with a close under $80 and its 10-dma. We'd expect a dip back toward the $78.00-77.00 region, which is where we would expect a bounce. Our target is the $85.00-86.00 range. We do not want to hold over the earnings report.

Picked on October 08 at $ 79.12
Change since picked: + 0.64
Earnings Date 11/09/06 (unconfirmed)
Average Daily Volume = 796 thousand

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Vimpel Comm. - VIP - close: 62.29 chg: -1.41 stop: 59.95

VIP did not escape the market-wide profit taking on Tuesday. Shares lost 2.2% after its recent gains. Readers can use the pull back as a new entry point to buy calls or wait and watch to see if shares continue to dip toward $61 (maybe $60). Our target is the $67.50-70.00 range. We do not want to hold over the mid-November earnings.

Picked on October 12 at $ 62.17
Change since picked: + 0.12
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million

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Vulcan Materials - VMC - cls: 82.27 chg: -0.75 stop: 79.85

We warned readers last night that VMC looked poised for a pull back today. There is still a chance that VMC will continue to dip toward the 10-dma near $81. 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: + 2.01
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 843 thousand
 

Put Updates

Medco Health Sol. - MHS - cls: 56.80 chg: -0.06 stop: 58.05

The oversold bounce in MHS stalled on Tuesday with shares struggling to make it past the $57 level and its 200-dma. It wasn't a very clear failed rally today so we'd probably wait a bit before opening new positions. The P&F chart points to a $49 target. We think shares can slip toward the $52.00-51.00 range. We do not want to hold over the early November earnings report.

Picked on October 15 at $ 56.10
Change since picked: + 0.70
Earnings Date 11/03/06 (confirmed)
Average Daily Volume = 1.9 million
 

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: 104.48 chg: -1.05 stop: n/a

Lack of real directional movement in BXP is killing our strangle play. We need to exit before the closing bell on Friday or our options will expire worthless. 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 adjusting our target to $2.50 for either option.

Picked on October 01 at $103.34
Change since picked: + 1.14
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 694 thousand

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ConocoPhillips - COP - close: 60.80 chg: -0.29 stop: n/a

The profit taking in COP was pretty mild on Tuesday. Traders bought the dip at $60.17 midday. Readers could have used the pull back as a new entry point to open strangle positions. Our suggested entry point was the $59.50-60.50 range (the closer to $60.00 the better). We do plan to hold over the October 26th earnings report. At current prices our estimated cost is about $1.15. We are suggesting an exit if either option rise to $2.00 or more. Our suggested options were the November $65 call (COP-KM) and the November $55 put (COP-WK).

Picked on October 15 at $ 60.03
Change since picked: + 0.77
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 9.8 million

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Google - GOOG - close: 420.64 chg: - 1.11 stop: n/a

Shares of GOOG essentially traded sideways as investors wait for the company's earnings report due out on October 19th after the closing bell. We're not suggesting new strangle positions. 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: +18.74
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 5.6 million
 

Dropped Calls

CIGNA - CI - close: 116.27 change: -0.96 stop: 116.95

It looks like CI is breaking down not higher. Today's decline is a breakdown from the recent trading range. Aggressive traders may even want to consider switching to puts. We'd watch for a drop under the 50-dma (currently near $114.00) or the $114.00 mark as a potential entry point to buy puts although be advised that the 200-dma near $110 might offer some support. It was our plan to buy calls on a breakout over $120 but CI never hit our trigger at $120.26 so the play was never opened.

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 1.3 million

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Entergy - ETR - close: 84.07 change: +1.69 stop: 79.99

Target achieved. The company raised its third quarter earnings guidance and the stock rose just over 2% on the news on strong volume. Our target was the $84.00 mark.

Picked on October 03 at $ 80.33
Change since picked: + 3.74
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 1.1 million

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KB Home - KBH - close: 43.35 change: -0.77 stop: 44.99

We are dropping KBH as a bullish candidate. The housing stocks are struggling and have reversed last week's rally. Shares of KBH are definitely not cooperating with us and today's loss (-1.7%) is a breakdown under the 50-dma. Our plan was to buy calls with a trigger at $48.05. The stock never hit our trigger so we're dropping it unopened.

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 12/20/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Omnicom - OMC - close: 94.30 chg: -0.24 stop: 92.95

We're throwing in the towel on OMC and suggesting an early exit. Almost all of the technical indicators on the daily chart are suggesting that the next move will be down. Of course Murphy's law will probably have the stock surging higher tomorrow now that we've closed the play. If you don't want to exit early with us consider tightening your stop loss toward the $94 level.

Picked on September 10 at $ 90.97
Change since picked: + 3.33
Earnings Date 10/24/06 (unconfirmed)
Average Daily Volume = 1.1 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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