Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Cerner Corp. - CERN - close: 48.31 chg: +0.10 stop: 46.45

The major indices ended the session relatively unchanged for the day. This left CERN to fend for itself and the stock consolidated sideways above the $48 level. We remain bullish with the stock above $48.00. However, we have to caution readers that early November could be rough for the markets. The last day of October was year end for a lot of mutual funds and there could be a lot of profit taking and reshuffling that begins tomorrow. 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.

Picked on October 30 at $ 48.05
Change since picked: + 0.26
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

---

Frontier Oil - FTO - close: 29.40 change: -0.00 stop: 27.99

Is this an entry point or just a speed bump on the way down? The daily technical indicators are turning bearish and crude oil prices have not been very strong lately. We're concerned that the next move in FTO may be lower. However, the stock quickly bounced from its test of support near its rising 200-dma this afternoon. That's normally a bullish sign. If we do not see some follow through higher tomorrow (on today's rebound) then we'll exit early. If the stock closes under $29.00 then we'll exit early. We're not suggesting new positions Our short-term target is the $32.50-33.00 range. It's short-term because we want to exit ahead of FTO's November 7th earnings report.

Picked on October 15 at $ 28.90
Change since picked: + 0.50
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 3.2 million

---

NTL Inc. - NTLI - close: 27.03 chg: -0.04 stop: 25.99

NTLI followed the markets sideways on Tuesday. The stock did rebound quickly from its lows this morning near $26.60. At this time we'd probably suggest waiting for a new move over $27.40 or $27.50 before initiating new call positions. 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: - 0.38
Earnings Date 11/08/06 (unconfirmed)
Average Daily Volume = 2.4 million

---

Vimpel Comm. - VIP - close: 65.99 chg: +1.02 stop: 61.90

VIP continued to rally following yesterday's bounce near support around the $64.00 level. The stock added 1.5% today and looks poised to move higher. Our target is the $67.50-70.00 range. More conservative traders may want to think about locking in a profit right now. We plan to exit ahead of the mid-November earnings report. FYI: We are seeing a bearish divergence between the price action and the RSI on VIP's daily chart.

Picked on October 12 at $ 62.17
Change since picked: + 3.82
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Alcon Inc. - ACL - close: 106.08 chg: -0.79 stop: 110.41

The sell-off in ACL continues and the stock broke down under its October 24th low and hit our trigger to buy puts at $105.75. The play is now open and our target is the $100.10-100.00 range. If you missed the entry point this afternoon then readers have a choice to enter plays on a failed rally near $108 or a new low under $105. More conservative traders may want to tighten their stops a bit. We did note that the DRG drug index broke down under its 50-dma and its multi-month trendline of higher lows. While the move in the DRG index and shares of ACL is bearish we also have to state that both are starting to look oversold and due for a bounce.

Picked on October 31 at $105.75
Change since picked: + 0.33
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 520 thousand

---

Advanced Micro Dev. - AMD - cls: 21.27 chg: -0.05 stop: 22.05

The major averages didn't make any progress on Tuesday and neither did the semiconductor stocks. Shares of AMD traded in a 62-cent range on below average volume. We would suggest readers wait for a failed rally under $22.00 or a new decline under $20.00 before opening new put positions. Our target is the $17.50-17.00 range.

Picked on October 29 at $ 20.86
Change since picked: + 0.41
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 23.0 million

---

Amazon.com - AMZN - close: 38.09 chg: -0.06 stop: 40.25

There is no change from our previous updates on AMZN. The stock posted its fourth day in the $37.50-38.50 trading range. We suspect that AMZN will fill the gap from last week and we're suggesting an aggressive put play to capture that move. The $39.00 level is resistance but we're giving AMZN room to maneuver with a stop loss above round-number resistance at $40.00. More patient traders may want to try and time an entry on another failed rally near $39 or if the rally continues then near $40. Our target is the $35.00-34.00 range.

Picked on October 29 at $ 38.24
Change since picked: - 0.15
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 7.9 million

---

PACCAR Inc. - PCAR - cls: 59.21 chg: -0.29 stop: 62.51

We don't see any changes from our previous update on PCAR. The stock posted its second failed rally at the $60 level in as many days. Technicals are bearish and we'd use today's move as another entry point. Our target is the rising 100-dma but we're going to use an official exit in the $56.00-55.50 range (for now). We are using a wide stop loss but more conservative traders may want to try and keep theirs near $61.00 to reduce their risk.

Picked on October 29 at $ 59.42
Change since picked: - 0.21
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 1.4 million

---

Pantry Inc. - PTRY - close: 54.58 change: +0.56 stop: 57.05

PTRY posted a 1% bounce on Tuesday. Volume improved over the last couple of sessions but we don't see any real changes from our previous updates. Traders may want to wait and see if PTRY produces a failed rally under $56.00 (also near its 10-dma) as a new entry point. More conservative traders may want to wait for a decline under $52.50 before opening new put plays. Conservative traders may also want to consider a tighter stop (maybe near $56.00). Our target is the $48.00-47.00 range. We do not want to hold over the November 16th earnings report. We would consider this an aggressive entry point above $52.50.

Picked on October 29 at $ 54.05
Change since picked: + 0.53
Earnings Date 11/16/06 (confirmed)
Average Daily Volume = 383 thousand

---

Univ.Forest Prod. - UFPI - cls: 45.38 chg: -0.34 stop: 50.01

UFPI lost 0.7% on Tuesday but buyers are still trying to defend it at the $45.00 level. We would still look for a bounce toward the simple 10-dma (now at $46.17). A failed rally near $46 could be used as a new entry point or a new relative low under $44.94. More conservative traders may want to tighten their stop loss and reduce their risk. We're aiming for a decline into the $41.00-40.00 range. Our wide stop loss makes this a more aggressive play.

Picked on October 24 at $ 46.13
Change since picked: - 0.77
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.)

---

Bear Stearns - BSC - cls: 151.35 chg: -1.13 stop: n/a

There are no changes from our previous updates on BSC. Our suggested entry range to open strangles is the $149.00-151.00 range. The closer to $150.00 the better. 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. FYI: Don't forget that November strikes expire in less than three weeks. You may want to use December options.

Picked on October 22 at $150.19
Change since picked: + 1.16
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

---

Cephalon - CEPH - close: 70.18 change: -0.26 stop: n/a

We have two more days before CEPH reports earnings. Fortunately, CEPH has given us plenty of opportunity to open strangles at the $70.00 mark. We would not suggest plays after Thursday's closing bell. The options in our strangle are the December $75 call (CQE-LO) and the December $65 put (CQE-XM). Our estimated cost was $3.45. We plan to see if either option rises to $4.90 or more.

Picked on October 29 at $ 69.35
Change since picked: + 0.83
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

---

ConocoPhillips - COP - close: 60.24 chg: +0.44 stop: n/a

This back and forth in shares of COP is deadly to our strangle play. With less than three weeks left before November strikes expire traders might want to be thinking about an early exit to try and salvage any capital. We're not suggesting new positions. 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: + 0.21
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

---

Blue Nile - NILE - cls: 38.21 chg: -0.89 stop: n/a

The trading in NILE today was not what we were expecting. The stock tends to see a much bigger reaction to its earnings reports - at least the last couple. Shares spiked to $36.78 this morning and then bounced back. More conservative traders may want to exit early right here to limit any losses. We're going to ride it out and see what happens since we have January strikes. Now that the earnings news is out we are no longer suggesting new positions. Our estimated cost was $2.40 and we're planning to sell if either side of our strangle rises to $3.90. The options in our suggested strangle are the January $45 call (JWU-AI) and the January $35 put (JWU-MG).

Picked on October 29 at $ 38.92
Change since picked: - 0.71
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand

---

Whole Foods - WFMI - close: 63.84 change: -1.06 stop: n/a

Looks like WFMI suffered some profit taking on the last day of October. We only have a couple of more days to open plays before WFMI reports earnings on Nov. 2nd. Our suggested entry range is the $64.00-66.00 region with preferred strangle entries at $65.00. Our estimated cost is $3.15 and we're planning to sell if either side of our strangle hits $5.40 or more. The options in our suggested strangle are the December $70 call (FMQ-LN) and the December $60 put (FMQ-XL).

Picked on October 29 at $ 64.75
Change since picked: - 0.91
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.1 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

Play Update Archives