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Call Updates

BP Prudhoe Bay - BPT - close: 74.00 chg: +0.90 stop: 72.45

Oil stocks continued to rally thanks to a strong 3% surge in crude oil futures. Crude oil was rising as investors reacted to an unexpected decline in the weekly inventory numbers and reports of new violence in Nigeria, one of the world's largest exporters of oil. Shares of BPT rallied 1.2% and is currently trading very close to technical resistance at its 50-dma and 200-dma. More aggressive traders may want to consider an early entry. We're waiting for a breakout over resistance at the $75.00 mark. 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.

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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Cerner Corp. - CERN - close: 46.86 chg: +0.10 stop: 46.45

It has been three trading days and CERN has failed to see any upward momentum on the October 20th bullish reversal/bullish engulfing candlestick pattern. We're going to wait one more day for CERN to show some strength or we're dropping it as a candidate. Right now we're waiting for a breakout through the top of its trading range and for a breakout over the $48.00 level. We're suggesting a trigger to buy calls at $48.05. If triggered then our target is the $52.00-52.50 range. The $50.00 mark might offer some round-number resistance so expect a pull back on the initial test of $50. FYI: The Point & Figure chart projects a $76 target.

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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Frontier Oil - FTO - close: 30.12 change: +0.24 stop: 27.75

The strength in energy stocks helped lift shares of FTO through resistance at the $30.00 level. The rally did see some trouble with the simple 100-dma but overall the move today looks bullish as a breakout from its trading range. A breakout over $30.00 could be used 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.

Picked on October 15 at $ 28.90
Change since picked: + 1.22
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 3.2 million

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Vimpel Comm. - VIP - close: 66.00 chg: +0.75 stop: 61.90*new*

VIP continues to rally and the stock set another new all-time high on Wednesday. Unfortunately, volume came in below average, which is normally a cautionary sign. We're not suggesting new positions at this time. Please note that we're adjusting the stop loss to $61.90. 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: + 3.83
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Alcon Inc. - ACL - close: 108.36 chg: -0.64 stop: 110.41

More aggressive traders may want to use today's failed rally under the $110 level in ACL as a new entry point to buy puts. The technicals definitely look bearish and the daily chart saw the MACD produce a new sell signal today. We are waiting for a new relative low. Our suggested trigger to buy puts is at $105.75. If triggered our target is the $100.10-100.00 level. We would consider this slightly more aggressive due to the wide stop loss we're suggesting.

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 520 thousand

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Univ.Forest Prod. - UFPI - cls: 45.50 chg: -0.63 stop: 50.01

UFPI continues to trade lower on strong volume. The big volume on the declines is definitely a bearish signal. We are still suggesting new positions at current levels although more conservative traders may want to wait and see if shares bounce from the $45.00 level before considering new positions. We're aiming for a decline into the $41.00-40.00 range. We are using a wide stop loss until we see how shares react to the $45 level.

Picked on October 24 at $ 46.13
Change since picked: - 0.63
Earnings Date 10/16/06 (confirmed)
Average Daily Volume = 192 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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Bear Stearns - BSC - cls: 153.39 chg: -0.41 stop: n/a

Shares of BSC tagged another new all-time high above the $155 level this morning. Yet the rally took a bit of a breather with a minor pull back in the stock by the closing bell. We wouldn't be surprised to see a dip back toward the $150 level soon. The technicals are showing a very overbought condition in the stock. We're not suggesting new strangle plays at this time (although another dip to the $150.00 level could be used as a new entry point). The options in our strangle are the November 155 call (BSC-KK) and the November 145 put (BSC-WI). Our estimated cost was $4.00. We're planning to exit if either option rises to $6.00 or more.

Picked on October 22 at $150.19
Change since picked: + 3.20
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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ConocoPhillips - COP - close: 62.75 chg: +1.35 stop: n/a

COP reported earnings today and beat analysts estimates of $2.37 by 31 cents a share. The positive earnings news and the rise in crude oil thanks to the inventory report helped lift COP more than 2.1% on above average volume today. We're not suggesting new strangle positions at this time. 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).

Picked on October 15 at $ 60.03
Change since picked: + 2.72
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million
 

Dropped Calls

Carpenter Tech. - CRS - cls: 119.09 chg: +3.90 stop: 109.99

Target achieved. CRS continued to rally on rising volume and shares closed near their highs for the session. This is pretty bullish for tomorrow but then CRS might see some "sell the news" reaction as traders react to the company's earnings report tomorrow morning. We were planning to exit today at the closing bell but CRS hit our target in the $118.00-120.00 range first.

Picked on October 11 at $110.51
Change since picked: + 8.58
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 754 thousand

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Devon Energy - DVN - close: 69.35 chg: +0.35 stop: 64.72

Target achieved/surpassed. The lower than expected oil inventory numbers produced a 3% surge in crude oil and that was felt in the energy stocks. Shares of DVN closed up 0.5% but managed to trade to $70.09 on an intraday basis. Our target was the $69.50-70.00 range.

Picked on October 15 at $ 64.72
Change since picked: + 4.63
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 5.6 million

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EOG Resources - EOG - close: 70.34 chg: +1.41 stop: 66.05

Target achieved/surpassed. EOG is another oil stock that benefited from the rise in crude oil futures. The stock broke out higher past resistance at the 200-dma and the $70.00 mark. Our target was the $69.50-70.00 range.

Picked on October 16 at $ 66.05
Change since picked: + 4.29
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 3.6 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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