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Call Updates

BP Prudhoe Bay - BPT - close: 74.30 chg: +0.30 stop: 72.45

The energy sector took a breather as crude oil futures ticked lower toward the $60 a barrel. Meanwhile better than expected earnings from oil giant ExxonMobil (XOM) kept the mood for oil stocks positive. Shares of BPT showed some strength with a minor gain and a breakout over technical resistance at its 50-dma and the 200-dma. More aggressive traders might want to consider new positions here. We're still waiting for a push past the $75.00 level. 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: 47.20 chg: +0.34 stop: 46.45

Yesterday we stated in our CERN update that if we didn't see some strength today we'd drop the stock as a bullish candidate. Well, CERN delivered a 0.7% gain, which was better than the rise in the S&P 500. Our biggest concern today was the volume, which came in pretty low and suggests there is no confidence behind the rise. We're still on the sidelines and will keep CERN as a candidate for now but if the upward momentum fails we're going to exit early. Right now we're waiting 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: 29.80 change: -0.32 stop: 27.75

The rally in energy stocks took a rest on Thursday as crude oil futures fell over 1% toward $60 a barrel. The dip in FTO looks a little ominous since today's trading produced a bearish engulfing candlestick pattern. We'd like to see a bounce from here given today's intraday dip near the 10-dma and 50-dma. Currently we'd wait for a new rise over $30.05 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, 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: + 0.90
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 3.2 million

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NTL Inc. - NTLI - close: 27.50 chg: +0.55 stop: 25.99

The rally in NTLI continued into Thursday. Shares added another 2% and managed to breakout over resistance in the $27.00-27.35 region on very strong volume. This is a bullish move and NTLI looks poised to move higher. Our trigger to buy calls was at $27.41 so the play is now open. Our target is the $29.90-30.00 range. We do not want to hold over the early November (8th?) earnings report.

Picked on October 26 at $ 27.41
Change since picked: + 0.09
Earnings Date 11/08/06 (unconfirmed)
Average Daily Volume = 2.4 million

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Vimpel Comm. - VIP - close: 66.06 chg: +0.06 stop: 61.90

Shares of VIP came within half a point of our target this morning with the spike to $67.03. Unfortunately, VIP was unable to maintain its early gains and shares slipped back toward the $66 region to churn sideways for the rest of the day. More conservative traders may want to strongly consider exiting early right here for a gain as today's session could be seen as a failed rally pattern. We're not suggesting new positions at this time. 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: + 3.89
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Alcon Inc. - ACL - close: 108.37 chg: +0.01 stop: 110.41

Drug stocks were showing relative weakness today. The DRG index slipped 0.9%. Meanwhile shares of ACL tried to bounce twice and only succeeded in creating a new lower high. The stock continues to look bearish. More aggressive traders might want to consider new put positions now. 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 play 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: 45.58 chg: +0.08 stop: 50.01

We cautioned readers that the $45.00 level might be support and UFPI could bounce. That's what the stock delivered today. Shares dipped to the $45.00 level early this afternoon, traded sideways for a while, and then managed to bounce. We would not be surprised to see an oversold bounce back to the simple 10-dma or the $48.00 level. Readers can wait and watch for the next failed rally as a new entry point. 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: - 0.55
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: 153.30 chg: -0.09 stop: n/a

The XBD Broker-dealer index turned higher adding 1.5% thanks to a strong gain and another new high in Goldman Sachs (GS). Shares of BSC were a little more subdued and spent the session consolidating sideways. 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: + 3.11
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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ConocoPhillips - COP - close: 62.20 chg: -0.55 stop: n/a

COP appeared to produce a failed rally at the stock's 200-dma today. This would be a blow to COP's post-earnings rally. We need to see the stock pick a direction and go. If the earnings news isn't enough to power a decisive move in COP then we need to turn cautious with our strangle play. 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: + 2.17
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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