Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Cerner Corp. - CERN - close: 48.00 chg: -0.31 stop: 46.45

The markets suffered a widespread round of profit taking on November 1st. Shares of CERN dipped to $47.32 before bouncing back to the $48 level. This almost looks like a bounce from its rising 10-dma, which is the first level of technical support. Were it not for the overbought condition in the major indices traders might want to consider new call positions on this bounce. However, since we're concerned that the markets have more profit taking ahead readers might want to wait for a new relative high before opening new plays in CERN. 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: - 0.05
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

---

Frontier Oil - FTO - close: 29.46 change: +0.06 stop: 27.99

FTO performed better than expected with an intraday bounce from the $28.80 level, which is also near the 50-dma. The stock's bounce may have been influenced by news that FTO had won a court battle in Beverly Hills today. We remain cautious and we're not suggesting new positions given our time table. We plan to exit ahead of the company's Nov. 7th earnings report. More conservative traders may want to exit early to avoid or limit losses. Our short-term target is the $32.50-33.00 range.

Picked on October 15 at $ 28.90
Change since picked: + 0.56
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 3.2 million

---

NTL Inc. - NTLI - close: 27.05 chg: +0.02 stop: 25.99

NTLI tried to rally higher this morning with a minor gap up at the open but market weakness weighed on shares and the stock consolidated back toward breakeven for the day. We're not suggesting new positions at this time due to our time frame. NTLI is due to report earnings early on November 8th so we're planning to exit at the closing bell on November 7th to avoid holding over the announcement. Our target is the $29.90-30.00 range.

Picked on October 26 at $ 27.41
Change since picked: - 0.36
Earnings Date 11/08/06 (confirmed)
Average Daily Volume = 2.4 million

---

Vimpel Comm. - VIP - close: 64.75 chg: -1.24 stop: 61.90

The market-wide profit taking on Wednesday set shares of VIP back for a 1.8% loss. We're actually seeing some bearish moves in the stock's technical indicators. More conservative traders may want to lock in a small gain before VIP sees any more profit taking. Or more conservative traders may want to raise their stops toward the $64 region. We're not suggesting new positions at this time. Our target is the $67.50-70.00 range. We plan to exit ahead of the mid-November earnings report.

Picked on October 12 at $ 62.17
Change since picked: + 2.58
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Alcon Inc. - ACL - close: 106.19 chg: +0.08 stop: 110.41

Today's move in ACL looks like a new entry point to buy puts. The stock tried to rally this morning but failed, multiple times, to get past the $108 level. This failed rally could be a good spot to buy puts. However, we want to note that both ACL and the DRG drug index still look short-term oversold. More conservative traders may want to tighten their stops or wait for a new relative low before opening new positions. Our target is the $100.10-100.00 range.

Picked on October 31 at $105.75
Change since picked: + 0.41
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 520 thousand

---

Advanced Micro Dev. - AMD - cls: 20.73 chg: -0.54 stop: 22.05

Technology stocks were some of the worst performers today. The NASDAQ lost 1.3% and the SOX semiconductor index fell 1.9%. Shares of AMD under performed them both with a 2.5% decline. Traders can choose to open new put positions here or wait for a decline under round-number support at the $20.00 mark. Our target is the $17.50-17.00 range.

Picked on October 29 at $ 20.86
Change since picked: - 0.13
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 23.0 million

---

Amazon.com - AMZN - close: 37.56 chg: -0.53 stop: 40.25

Shares of AMZN lost almost 1.4% and closed near the bottom of its four-day trading range. We expect shares to try and fill the gap from last month. 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: - 0.68
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 7.9 million

---

Capital One Finc. - COF - cls: 76.86 chg: -2.47 stop: 81.05*new*

Renewed concerns about the economy took a toll on the financials. Shares of COF really under performed the market today with a 3.1% decline on strong volume. The stock started this morning with a failed rally at the $80 level and then dropped under potential technical support at its 50-dma by the closing bell. We're lowering our stop loss to $81.05. Our target is the $75.10-75.00 range.

Picked on October 31 at $ 79.33
Change since picked: - 2.47
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 2.4 million

---

Focus Media - FMCN - close: 54.66 change: +1.77 stop: 56.55

An oversold bounce after yesterday's decline is not a big surprised. The stock appeared to produce a failed rally under the $55.50 level, which readers can use as a new entry point to buy puts or wait for a new decline under $54.00 before initiating plays. We do expect an initial bounce at $50.00 but our target is the $48.00-47.00 range. We do not want to hold over the November 20th earnings report.

Picked on October 31 at $ 52.89
Change since picked: + 1.77
Earnings Date 11/20/06 (confirmed)
Average Daily Volume = 660 thousand

---

NewMarket - NEU - close: 62.67 change: -1.63 stop: 67.05

Our new put play in NEU is off to a decent start. The stock lost 2.5% and the MACD on the daily chart produced a new sell signal. We don't see any changes from yesterday's new play description. We are suggesting two targets. Our conservative target is the $60.20-60.00 range. Our aggressive target is the $56.00 level.

Picked on October 31 at $ 64.30
Change since picked: - 1.63
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 354 thousand

---

PACCAR Inc. - PCAR - cls: 58.71 chg: -0.50 stop: 62.51

Today marked the third time in three days that shares of PCAR have produced a (bearish) failed rally at the $60.00 level. We see it as another entry point to buy puts (just like the first two). More conservative traders may want to consider a tighter stop with such clear resistance at $60.00. 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).

Picked on October 29 at $ 59.42
Change since picked: - 0.71
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 1.4 million

---

Pantry Inc. - PTRY - close: 54.66 change: +0.08 stop: 57.05

Unfortunately, there is no change from our previous updates on PTRY. The stock is still trading sideways with short-term support at its rising 50-dma (near 53.75). Traders can choose to use a failed rally under the 10-dma (near 55.50) or a decline under $53.50 as a new entry point. More conservative traders may want to wait for a decline under $52.50 before opening new plays. 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: + 0.61
Earnings Date 11/16/06 (confirmed)
Average Daily Volume = 383 thousand

---

Univ.Forest Prod. - UFPI - cls: 44.34 chg: -1.04 stop: 48.05*new*

The market-wide weakness weighed on shares of UFPI and the stock lost another 2.2%. More importantly shares broke down and closed under support at the $45.00 level on above average volume (which is bearish). We're aiming for a decline into the $41.00-40.00 range. We're adjusting the stop loss to $48.05.

Picked on October 24 at $ 46.13
Change since picked: - 1.81
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: 148.02 chg: -3.33 stop: n/a

Broker-dealer stocks really under performed the rest of the financials on Wednesday. The XBD index lost 2.3%. Shares of BSC dropped 2.2% and closed under the $150 level. This may have been the deciding move in finally reversing the stock's two-month bullish trend. We're not suggesting new positions at this time. 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.

Picked on October 22 at $150.19
Change since picked: - 2.17
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

---

Cephalon - CEPH - close: 69.94 change: -0.24 stop: n/a

CEPH is hugging the $70.00 mark as investors wait for the company's earnings report due out Thursday after the closing bell. 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: + 0.59
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

---

ConocoPhillips - COP - close: 59.70 chg: -0.54 stop: n/a

Technical indicators continue to turn more bearish for COP but the stock isn't moving enough and our strangle play is in real jeopardy. 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: - 0.33
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

---

Blue Nile - NILE - cls: 37.07 chg: -1.14 stop: n/a

NILE lost close to 3% on Wednesday but volume came in below average on the move. Technicals are turning bearish but the stock may have support in the $35-36 region. We're not suggesting new strangle plays. 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: - 1.85
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand

---

Whole Foods - WFMI - close: 63.16 change: -0.68 stop: n/a

The trading in WFMI continues to grow more negative but everything could change after the company's earnings report after the closing bell on Thursday. Currently the stock is outside of our suggested zone for opening new strangle plays (which was 64.00-66.00). We would not suggest new positions after Thursday. 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: - 1.59
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.1 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

Play Update Archives