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Call Updates

Ambac Fincl. - ABK - close: 84.82 chg: +0.43 stop: 83.79

We only have two days left on our ABK play. The company is due to report earnings on Wednesday, October 25th and we plan to exit on Tuesday at the closing bell to avoid holding over the report. On Thursday we raised our stop loss to just under Thursday's low. More conservative traders may want to inch their stop toward the $84 level due to our decreasing time frame. Our target was the $88-90 range but it doesn't look like ABK is going to make it.

Suggested Options:
We're not suggesting new positions in ABK at this time.

Picked on October 04 at $ 84.40
Change since picked: + 0.42
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 819 thousand

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BP Prudhoe Bay - BPT - close: 73.35 chg: -0.09 stop: 72.45

We are still stuck at the starting line with BPT. Shares are trying to rebound but we are waiting for a breakout over resistance at the $75.00 level. BPT has to push past technical resistance at its 50-dma and 200-dma first. If we are triggered at $75.05 than our target is the $79.00-80.00 range. FYI: A move over $75 would produce a new Point & Figure chart buy signal.

Suggested Options:
We would suggest the November or December calls if triggered at $75.05.

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: 42.29 change: -0.27 stop: 40.95

Homebuilders have been trending lower this past week in spite of some positive analyst comments that the sector may have finally bottomed. Shares of BZH have displayed some relative strength with a sideways consolidation in stead of a downward consolidation. We're still concerned about the lack of upward movement and would wait for a new rise past the $43.00 level or the October 12th high at $43.19 before initiating new call positions. We do find it interesting that the sideways consolidation in BZH appears to be narrowing. Similar patterns where the stock price coils into a point almost always end with a big breakout (or breakdown). Given the bullish P&F chart we suspect that BZH will breakout higher but the trend in the homebuilder index might suggest otherwise. We have about two and a half weeks left before BZH reports earnings. Keep that in mind if you're considering new positions. Our target is the $49.00-50.00 range. We do not want to hold over the early November earnings report.

Suggested Options:
If BZH trades over $43.00 again we'd consider buying the November calls.

Picked on October 11 at $ 42.75
Change since picked: - 0.46
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 1.3 million

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Carpenter Tech. - CRS - cls: 110.29 chg: -0.98 stop: 107.45 *new*

We are running out of time with CRS. The company is due to report earnings on the morning of Thursday, Oct. 26th. We don't want to hold over the report so we're planning to exit on Wednesday at the closing bell. The lack of follow through higher after Thursday's bounce is a concern. Technicals are mixed. The weekly chart's MACD indicator has produced a new buy signal while the MACD on the daily chart is nearing a new sell signal. So far CRS' six-week trend is bullish. We're going to raise our stop loss to $107.45. More conservative traders may want to exit now or adjust their stop toward Thursday's low near $108.00. Our target is the $118.00-120.00 range.

Suggested Options:
Time is almost up. We're not suggesting new positions in CRS although traders seeking an alternative might want to consider launching a strangle play with the stock near $110.

Picked on October 11 at $110.51
Change since picked: - 0.32
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 754 thousand

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Devon Energy - DVN - close: 67.39 chg: -0.95 stop: 64.72

Any strength in crude oil due to the OPEC news quickly faded. Crude oil slipped to new relative lows on Friday and some were calling it a "sell the news" reaction to the OPEC cuts. Weakness in crude sparked another round of profit taking after Thursday's gains. The OIX index fell 0.5% and the more volatile OSX oil services index slipped 1.9%. Shares of DVN closed down 1.39% but appeared to bounce from its three-week pattern of higher lows. We hesitate to suggest new positions at this time but it does look like crude oil futures are still trading above support (for now). Our target is the $69.50-70.00 range. We do not want to hold over the November 1st earnings report.

Suggested Options:
We are not suggesting new positions in DVN at this time.

Picked on October 15 at $ 64.72
Change since picked: + 2.67
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 5.6 million

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EOG Resources - EOG - close: 66.25 chg: -1.01 stop: 64.95

A bearish reversal in crude oil futures sent the commodity to new relative lows. This weighed heavily on the energy sector and shares of EOG lost 1.5%. The stock managed to bounce near $65.30, which is near the bottom edge of its four-day trading range (65.25-67.50). Coincidentally it's also near technical support at the 100-dma. Traders could use the bounce from Friday's low as a new entry point to buy calls but we're not suggesting new positions at this time. 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.

Suggested Options:
We're not suggesting new positions in EOG at this time.

Picked on October 16 at $ 66.05
Change since picked: + 0.20
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 3.6 million

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Fortune Brands - FO - close: 75.50 chg: -0.11 stop: 74.84*new*

We are running low on time with our FO play. The company is due to report earnings on the morning of Friday, October 27th. We do not want to hold over the report so we're planning to exit on Thursday afternoon at the close. FO's upward momentum has stalled. The stock has been stuck in a narrow $75.00-76.00 trading range for the last few days. We are not suggesting new positions due to our diminishing time frame but more nimble traders might want to consider new plays on a move over $76.00 or $76.25. Our target is the $79.90-80.00 range. Please note that we're raising our stop loss to $74.84, which is under last Tuesday's low.

Suggested Options:
We are not suggesting new positions in FO.

Picked on October 13 at $ 76.26
Change since picked: - 0.76
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 745 thousand

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Frontier Oil - FTO - close: 29.65 change: -0.04 stop: 26.99

FTO displayed some relative strength on Friday. Most of the energy stocks were trading lower thanks to a decline in crude oil futures. Yet shares of FTO closed with a minor 4-cent decline after trying to breakout past the $30.00 level again. We remain optimistic with FTO but traders have a choice. They can wait for a move over $30.00 before initiating new call positions or they can look for another dip in the $29.00-28.00 region as a new entry point. Our target is the $32.50-33.00 range. We do not want to hold over the early November earnings report, which gives us less than two full weeks. FYI: The P&F chart is still bearish for FTO.

Suggested Options:
Due to our time frame (less than two weeks) we'd learn toward not opening new positions but our play description (above) lists two different entry points. We'd prefer the November call options.

Picked on October 15 at $ 28.90
Change since picked: + 0.75
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 3.2 million

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NCI Building Sys. - NCS - cls: 60.00 chg: -1.25 stop: 59.45*new*

Short-term technicals are starting to look bearish on NCS. The stock's performance last week looks like a failed rally pattern on the weekly chart. Friday's dip under the $60.00 level didn't inspire any confidence either. The stock's lack of follow through higher after two bounce attempts at $60 would be a good excuse to exit now. We're choosing to hold on for another day or two and see what happens. However, we're raising the stop loss toward Friday's low. Our new stop is $59.45. We're not suggesting new positions with NCS under $61.00. Our target is the $67.00-70.00 range.

Suggested Options:
We're not suggesting new positions in NCS at this time.

Picked on October 16 at $ 61.26
Change since picked: - 1.26
Earnings Date 11/29/06 (unconfirmed)
Average Daily Volume = 386 thousand

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Rockwell Automation - ROK - cls: 60.69 chg: -0.87 stop: 59.95

ROK spiked lower in knee-jerk reaction as traders reacted to the various headlines on Friday morning. Bulls did step in to buy the dip near $60.00 but Friday's loss damaged the current up trend. More conservative traders may just want to exit immediately on Monday morning. We are suggesting that everyone exit on Monday afternoon at the closing bell to avoid holding over ROK's earnings report due out after the close. Wall Street is looking for earnings of 82 cents a share.

Suggested Options:
We are not suggesting new positions in ROK at this time.

Picked on October 12 at $ 60.86
Change since picked: - 0.17
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 1.5 million

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Vimpel Comm. - VIP - close: 63.16 chg: +0.12 stop: 59.95

Once again VIP gapped open lower only to see traders buy the dip and push shares higher. The action on Friday looks like a new entry point to buy calls but we have to caution readers that volume came in pretty low and that doesn't say much about Friday's strength. More conservative traders may want to tighten their stops toward the $61.00 or $61.50 level. Our target is the $67.50-70.00 range. We do not want to hold over the mid-November earnings.

Suggested Options:
We are suggesting the November calls although January calls would also work.

BUY CALL NOV 60.00 VIQ-KL open interest=683 current ask $4.90
BUY CALL NOV 65.00 VIQ-KM open interest=691 current ask $2.05

Picked on October 12 at $ 62.17
Change since picked: + 0.99
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million

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Put Updates

None Today.

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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ConocoPhillips - COP - close: 60.86 chg: -0.27 stop: n/a

COP is still consolidating sideways between $60 and $62. We would expect more sideways trading into the company's earnings report on October 26th unless crude oil really begins to move next week. Traders can still open new strangle positions near $60.00 up until the company's earnings announcement. We would not suggest new plays after they report. Try and keep new entries in the $59.50-60.50 range. Our estimated cost was 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).

Suggested Options:
We're cautiously suggesting new strangles ahead of the earnings report. See our play description for more details.

Picked on October 15 at $ 60.03
Change since picked: + 0.83
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 9.8 million

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Google - GOOG - close: 459.67 chg: +33.61 stop: $452.99

As expected shares of GOOG gapped open higher on Friday morning. Shares opened near $459 and dipped to $453.59 before bouncing back. It was a very strong day thanks to the company's better than expected earnings report. Analyst firms were raising their price targets on Friday. Citigroup raised their price target for GOOG to $600 and S&P raised their price target to $500. Originally our plan was to exit if either option rose to $24.00 or more. Yet on Thursday we got a little greedy and raised our exit price to $29.00 with the expectation that GOOG would open near $460 and continue higher. Well, the November $440 call (GOP-KH) did not reach $29.00. As of Friday it was trading at $27.70bid/$27.90ask. Traders may want to consider exiting right now to lock in a gain! We're going to alter our strategy again and put a stop loss on this play. If GOOG trades under $453.00 we want to sell the strangle (the call side) to protect any potential gains. Our estimated cost was about $13.00 for the strangle.

Suggested Options:
We're not suggesting new positions in GOOG at this time.

Picked on October 01 at $401.90
Change since picked: +57.77
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 5.6 million

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Dropped Calls

Emerson Electric - EMR - close: 84.39 chg: -1.41 stop: 83.99

We have been stopped out of EMR at $83.99. Shares spiked lower fairly quickly on Friday morning and dipped to $83.93 before bouncing. We could not find any specific news to account for the Friday morning weakness and it may have been investor over reaction to another company's earnings report/sell-off. Friday's decline also added strength to the bearish curve in some of the technical indicators.

Picked on October 05 at $ 85.15
Change since picked: - 0.76
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 1.5 million

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Unibanco - UBB - close: 80.10 change: -0.64 stop: 76.45

We have decided it's time to exit early in UBB. The banking indices have all produced some short-term sell signals and UBB is nearing a new sell signal of its own. There is still a good chance that UBB would find support near $76.50-77.00 but we don't want to risk it at this time.

Picked on October 08 at $ 79.12
Change since picked: + 0.98
Earnings Date 11/09/06 (unconfirmed)
Average Daily Volume = 796 thousand

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Vulcan Materials - VMC - cls: 79.43 chg: -4.77 stop: 80.26

Ouch! VMC dropped over 5.6% on Friday with volume soaring about three times the daily average. The stock gapped open at $80.67 and then plunged to $78.30 before bouncing. This sudden onset of weakness was due to Goldman Sachs downgrading the stock to a "neutral". This seems like an overreaction but we can't argue with the market. Our stop loss was $80.26 so the play is now closed. FYI: Earlier this week we were suggesting traders consider an early exit over $84.00. Our target had been the $84.50 level. Thursday's high was $84.48.

Picked on October 09 at $ 80.26
Change since picked: - 0.83
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 843 thousand

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Dropped Puts

None Today.

Dropped Strangles

Boston Properties - BXP - close: 104.52 chg: +0.30 stop: n/a

Our aggressive strangle play in BXP was a flop. Shares had begun to march higher after a test of support near the bottom of its rising channel a few days ago but then the rally just ran out of steam. Lack of any real movement killed the options and BXP just limped sideways into option expiration on Friday. Our estimated cost was $1.90.

Picked on October 01 at $103.34
Change since picked: + 1.18
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 694 thousand

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