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Call Updates

Ambac Fincl. - ABK - close: 84.39 chg: -0.93 stop: 83.79 *new*

ABK showed some unexpected weakness on Thursday. The stock gapped open lower and dipped to $83.80 before bouncing back. Shares closed down just over 1% with volume coming in above average. Technicals have started to turn bearish for the stock. More conservative traders may want to exit early right now to limit any losses. We couldn't find any specific news to account for ABK's weakness today. The most natural explanation would be a poor earnings report from a rival in the insurance sector but we couldn't find any big declines in the insurance industry today. We're not suggesting new positions at this time and we're going to adjust our stop loss to $83.79, which is under today's low. We do not want to hold over the October 25th earnings announcement. Our target is the $88.00-90.00 range.

Picked on October 04 at $ 84.40
Change since picked: - 0.01
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 819 thousand

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BP Prudhoe Bay - BPT - close: 73.44 chg: +1.39 stop: 72.45

Crude oil futures were marching higher today as investors reacted to news that Saudi Arabia, the world's largest exporter of oil, had approved OPEC's decision to cut 1 million barrels a day in an effort to stop the slide of oil prices. The strength in crude helped lift the oil sectors and shares of BPT added 1.9%. The stock is now trading just under resistance at its 200-dma. We're waiting for a breakout over resistance at the $75.00 level. Our suggested trigger to buy calls is at $75.05. 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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Beazer Homes - BZH - close: 42.56 change: +0.79 stop: 40.95 *new*

Homebuilders were trying to bounce today and BZH managed to add almost 1.9% by the closing bell. It was something of a rocky session for BZH, which spiked higher toward the $43 level before racing back down to $41.65 and then bouncing again. This is the third bounce in three days in the $41.50-41.65 region. We would probably wait for a move over $43.00 or the recent high at $43.20 before initiating new positions. More conservative traders may want to adjust their stops toward the $41.50 level. We are going to raise our stop to $40.95. 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: - 0.19
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 1.3 million

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Carpenter Tech. - CRS - cls: 111.27 chg: +1.69 stop: 104.95

Steel stocks turned in a solid performance on Thursday, which almost completely reversed Wednesday's weakness. Shares of CRS managed a bounce near its rising 21-dma. The stock rose 1.5% and closed back above the pivotal $110 level. Traders can use today's bullish rebound as a new entry point to buy puts - but only if you're comfortable with the time frame. We plan to exit ahead of the October 26th earnings report. More conservative traders may want to adjust their stop toward today's lows. 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: + 0.76
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 754 thousand

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Devon Energy - DVN - close: 68.34 chg: +1.91 stop: 64.72*new*

DVN turned in a strong performance. Shares rallied 2.8% following yesterday's bounce near the $65 region. The stock is quickly approaching our target in the $69.50-70.00 range. We're not suggesting new positions at this time. Please note that we're adjusting the stop loss to $64.72 (breakeven). We do not want to hold over the November 1st earnings report.

Picked on October 15 at $ 64.72
Change since picked: + 3.62
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 5.6 million

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Emerson Electric - EMR - close: 85.80 chg: +0.61 stop: 83.99*new*

Today's session for EMR is more bullish then the final numbers might suggest. The stock produced a mini double-bottom this morning near the $84.35 level. The rebound back above the $85.00 mark can be used as a new entry point to buy calls. We're going to raise our stop loss to $83.99. Our target is the $89.00-90.00 range.

Picked on October 05 at $ 85.15
Change since picked: + 0.65
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 1.5 million

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EOG Resources - EOG - close: 67.26 chg: +1.20 stop: 64.95*new*

EOG is another oil stock that posted gains thanks to a rise in crude oil prices and the OPEC news. Shares rose 1.8% and look poised to challenge the simple 200-dma near $69 soon. Our short-term target is the $69.50-70.00 range. More aggressive traders may want to aim higher. We do not want to hold over the October 31st earnings report. Please note that we're raising the stop loss to $64.95.

Picked on October 16 at $ 66.05
Change since picked: + 1.21
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 3.6 million

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Fortune Brands - FO - close: 75.61 chg: +0.17 stop: 73.99

There are still no changes from our previous updates on FO. The stock is consolidating sideways in a narrow range. The overall pattern is bullish but we're cautious due to Tuesday's bearish reversal back under the 200-dma. FO is still trading under resistance near $76.00-76.25. Wait for a new move over $76.25 or higher before considering new positions. 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: - 0.65
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 745 thousand

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Frontier Oil - FTO - close: 29.69 change: +0.70 stop: 26.99*new*

News that Saudis have approved OPEC's desire to cut 1 million barrels of oil production a day helped crude oil futures post a gain on Thursday. This in turn fueled a rise in the energy stocks. FTO got an additional boost after one analyst firm started coverage on FTO with an "out perform" today. Currently FTO is poised to challenge resistance at its 50-dma, 100-dma and the $30.00 level. We're raising our stop loss to $26.99. 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: + 0.79
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 3.2 million

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NCI Building Sys. - NCS - cls: 61.25 chg: +0.34 stop: 58.99*new*

The bounce in NCS from the $60 level (and the move over $61.00) looks like a new entry point to buy calls. Our only concern was the volume today. Volume came in very low, which doesn't show much commitment from the bulls. We are adjusting our stop loss to $58.99. Our target is the $67.00-70.00 range.

Picked on October 16 at $ 61.26
Change since picked: - 0.01
Earnings Date 11/29/06 (unconfirmed)
Average Daily Volume = 386 thousand

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Rockwell Automation - ROK - cls: 61.56 chg: +0.15 stop: 59.95 *new*

The last three days has seen traders step in to buy the dip near $60.85 and ROK's 10-dma. This would seem to play along with the stock's stepping pattern. Readers can use today's bounce as a new entry point but bear in mind that ROK is nearing potential resistance at its 100-dma and exponential 200-dma near $62.75. We're going to raise our stop loss to $59.95. 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: + 0.70
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Unibanco - UBB - close: 80.74 change: +0.12 stop: 76.45

Volume on UBB just disappeared on Thursday. Volume came in about 30% of the daily average as the stock consolidated sideways. The technical indicators are mixed and traders should be prepared for a potential dip toward the $77-78 region. We're not suggesting new positions at this time. 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: + 1.97
Earnings Date 11/09/06 (unconfirmed)
Average Daily Volume = 796 thousand

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Vimpel Comm. - VIP - close: 63.04 chg: +0.29 stop: 59.95

VIP is still inching higher and shares look poised to continue its climb. The MACD on the daily chart is nearing a new buy signal. We would still consider new positions at current levels. 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: + 0.87
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million

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Vulcan Materials - VMC - cls: 84.20 chg: +1.46 stop: 80.26*new*

VMC turned in a strong session adding more than 1.7% on Thursday. Yesterday we suggested that more conservative traders consider an early exit on any move over $84.00. We're suggesting it again. It is true that the stock looks poised to continue higher and our target is the $84.50-85.00 range. However, the stock has struggled to maintain previous rallies over the $84 level. It's up to you if you want to exit now of aim higher. We do not want to hold over the October 30th earnings report. Please note our stop loss has been raised to $80.26.

Picked on October 09 at $ 80.26
Change since picked: + 3.94
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 843 thousand
 

Put Updates

None
 

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: 104.22 chg: -0.17 stop: n/a

It looks like it is game over for our strangle play in BXP. The stock has been stuck trading sideways the last few days in contrast to the DJIA, which is hitting new highs. Shares of BXP would need to see a pretty significant move tomorrow to give us an exit and we're not counting on it. However, should BXP suddenly move for us we're adjusting our target into the $1.50-2.00 range. Our estimated cost was about $1.90.

Picked on October 01 at $103.34
Change since picked: + 0.88
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 694 thousand

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ConocoPhillips - COP - close: 61.13 chg: +0.80 stop: n/a

The OPEC meeting helped lift crude oil and that pulled the energy stocks higher. Shares of COP bounced from the $60 level but is still trading under its 50-dma. The stock is outside our suggested entry range to open new strangle positions. We do plan to hold over the October 26th earnings report. 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: + 1.10
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 9.8 million

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Google - GOOG - close: 426.06 chg: + 6.75 stop: n/a

Tomorrow we should see GOOG trade higher and the call side of our strangle play should hit our target. During the normal session GOOG added 1.6% on strong volume as investors placed some last minute bets ahead of the company's earnings report tonight. After the bell GOOG turned in results that were better than analysts' estimates for both EPS and revenues. The earnings news sent the stock soaring and shares were trading near $460 in after hours markets. Please note that we're adjusting our exit strategy. Our previous plan was to exit if either side of our strangle traded to $24.00 or more. If GOOG does trade near $460 tomorrow then the call (November $440 GOP-KH) should trade in the $29-30 region or higher. We're going to raise our target to sell to $29.00. More conservative traders can stick to our original plan and exit if the call rises to $24.00. More aggressive traders may want to raise their target even further since GOOG has a history of seeing a prolonged post-earnings move. Our estimated cost for this position is about $13.00.

Picked on October 01 at $401.90
Change since picked: +24.16
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 5.6 million
 

Dropped Calls

Sepracor - SEPR - close: 50.39 chg: -0.48 stop: 49.90

We have been stopped out of SEPR at $49.90. Weakness from yesterday carried over into today's session. Shares plunged lower this morning trading to $49.80 before bouncing. There was still no stock-specific news to account for the selling but it may have been a reaction to another biotech or drug company's earnings report.

Picked on October 09 at $ 51.25
Change since picked: - 0.86
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 2.3 million
 

Dropped Puts

Medco Health Sol. - MHS - cls: 57.43 chg: +0.21 stop: 58.05

We have been stopped out of MHS at $58.05. It's tough to make bearish plays when the market is setting new highs but last week's failed rally looks like it was going to see some follow through lower. That wasn't the case and MHS managed to spike over resistance at the $58.00 level today and hit our stop loss.

Picked on October 15 at $ 56.10
Change since picked: + 1.33
Earnings Date 11/03/06 (confirmed)
Average Daily Volume = 1.9 million
 

Dropped Strangles

None
 

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