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Call Updates

Cerner Corp. - CERN - close: 49.09 chg: +0.83 stop: 46.90*new*

CERN's afternoon rebound on Thursday continued into Friday morning and the stock hit a new all-time high at $49.81. We expected potential resistance at the $50.00 mark so a pull back toward $48 could be in the cards. Readers can watch for a bounce near $48.00 as a new entry point to buy calls. We're going to raise our stop loss to $46.90. Our target is the $52.00-52.50 range.

Suggested Options:
We're not suggesting new positions at this time but a bounce near $48 could be a new entry point. We'd choose the December calls.

Picked on October 30 at $ 48.05
Change since picked: + 1.04
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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Frontier Oil - FTO - close: 31.11 change: +1.28 stop: 28.90*new*

Time is almost up for our bullish FTO play. The stock displayed a lot of strength on Friday. Shares rose more than 4.2% and broke through resistance at $30.00 and its 100-dma. The company is due to report earnings on Tuesday morning before the opening bell. To avoid earnings we're planning to exit at Monday's close or at our target at $32.50. Due to our time frame we're raising the stop loss to $28.90.

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

Picked on October 15 at $ 28.90
Change since picked: + 2.21
Earnings Date 11/07/06 (confirmed)
Average Daily Volume = 3.2 million

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NTL Inc. - NTLI - close: 26.88 chg: +0.04 stop: 25.99

We were expecting a bounce near $26.00 and traders obliged by buying the dip at $26.20 on Friday morning. The strong rebound looks like a new entry point to buy calls. Our only complaint was the lack of volume on the bounce. The worst part here is our time frame. NTLI is due to report earnings on November 8th. It looks like the report is expected after the market's close. We're planning to exit at the closing bell on November 7th just to be safe and avoid the announcement. Due to this very short time frame we're not suggesting new positions in NTLI. Our target is the $29.90-30.00 range.

Suggested Options:
We're not suggesting new positions in NTLI.

Picked on October 26 at $ 27.41
Change since picked: - 0.53
Earnings Date 11/08/06 (confirmed)
Average Daily Volume = 2.4 million

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Vimpel Comm. - VIP - close: 64.17 chg: -0.59 stop: 62.49*new*

VIP's lack of follow through higher on Thursday's intraday rebound is bearish. Friday's decline might be a reaction to news that the company will pay 382 million euros for Armenia Armentel. Whatever the reason the daily technicals for VIP are starting to look bearish. We're not suggesting new positions and more conservative traders may want to exit early. We're adjusting our stop loss to $62.49. Another reason that traders may want to exit early is VIP's earnings report, which is an event we do not want to hold over. The company is expected to report this month but we can't find a specific date. Estimates for when VIP will announce range from November 7th to November 23rd. Our target is the $67.50-70.00 range.

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

Picked on October 12 at $ 62.17
Change since picked: + 2.00
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Alcon Inc. - ACL - close: 105.62 chg: -0.63 stop: 110.01*new*

After a week of consolidating sideways and a few failed rallies under the $108 level it looks like ACL may finally be ready to head lower. Short-term, daily and weekly technicals are bearish or are turning bearish although it's worth noting that the daily indicators are near oversold levels. More conservative traders may want to tighten their stops toward the $108 level. We're adjusting ours to $110.01. We see the close under $106 as a new entry point to buy puts or readers can still wait for a new relative low under $105.15 or just wait for a decline under $105. Our target is the $100.10-100.00 range.

Suggested Options:
We are suggesting the December puts. You the individual trader should decide which month and strike price best suits your risk and trading style.

BUY PUT DEC 110.00 ACL-XB open interest= 75 current ask $5.70
BUY PUT DEC 105.00 ACL-XA open interest=128 current ask $2.90
BUY PUT DEC 100.00 ACL-XT open interest= 37 current ask $1.20

Picked on October 31 at $105.75
Change since picked: - 0.13
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 520 thousand

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Advanced Micro Dev. - AMD - cls: 20.88 chg: +0.03 stop: 22.05

The SOX semiconductor index produced a minor bounce on Friday and shares of AMD followed with an even smaller bounce of its own. For the most part the stock has been trading sideways the last several days and the range is getting pretty narrow. Normally these coiling patterns end with a big breakout one way or the other. The overall pattern in AMD is bearish although some of the short-term indicators are oversold enough that any sort of bounce will start to turn them higher. Readers can choose to open new put plays here or wait for a decline under round-number support at the $20.00 mark. Our target is the $17.50-17.00 range.

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 22.50 AMD-XU open interest=1156 current ask $2.20
BUY PUT DEC 20.00 AMD-XD open interest=4167 current ask $0.80

Picked on October 29 at $ 20.86
Change since picked: + 0.02
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 23.0 million

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Amazon.com - AMZN - close: 37.46 chg: +0.01 stop: 40.25

We warned readers that AMZN might bounce from its simple 10-dma and that's what the stock delivered on Friday albeit the bounce was pretty weak. We believe that AMZN will attempt to fill the gap from late last month. With overhead resistance at $39.00 and again at $40.00 this looks like a good spot to consider put plays. Readers can choose now to wait and watch for a failed rally under $39.00 (or $40 if it occurs) as a new entry point. We're using a relatively wide stop loss above $40 to give AMZN room to maneuver. Our target is the $35.00-34.00 range.

Suggested Options:
Wait for a failed rally under $39.00. We'd suggest the December puts.

Picked on October 29 at $ 38.24
Change since picked: - 0.78
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 7.9 million

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CDW Corp. - CDWC - cls: 63.99 chg: -0.26 stop: 66.25

CDWC continued to slip on Friday and the technical picture continues to decay. The close under the $64.00 level (and the intraday dip under $63.87) looks like a new entry point to buy puts. The stock has broken its three-month trendline of support but we do note potential support at its rising 50-dma near 63.25. Our target is the $60.50-60.00 range. Be advised that CDWC is hosting an analyst day on November 8th.

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 65.00 DWQ-XM open interest= 192 current ask $2.55
BUY PUT DEC 60.00 DWQ-XL open interest=1043 current ask $0.80

Picked on November 02 at $ 63.90
Change since picked: + 0.09
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 762 thousand

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Capital One Finc. - COF - cls: 76.56 chg: -0.10 stop: 80.05*new*

We were expecting an oversold bounce in COF and the stock traded higher on Friday morning but it failed near the $78 level. That's good news for the bears. Shares of COF are still relatively close to our target near $75.10-75.00 so we're not suggesting new positions at this time. We are going to adjust our stop loss to $80.05. More aggressive traders may want to aim lower.

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

Picked on October 31 at $ 79.33
Change since picked: - 2.77
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 2.4 million

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DIAMONDS ETF - DIA - close: 119.78 chg: -0.22 stop: 121.16

The trading in the DJIA and the DIA diamonds looked bearish on Friday. The early rally failed and the DIA produced a failed rally near its 10-dma and at its very short-term trendline of lower highs. The move produced another bearish engulfing candlestick and the index still looks very overbought and due for consolidation. However, before you think about backing up the truck the DJIA (and the DIA) is nearing potential short-term support near $119.20. We remain bearish and would still open new positions here near the $120 level. Our target is the $118.00-117.00 range.

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 121.00 DAQ-XQ open interest= 4771 current ask $2.30
BUY PUT DEC 120.00 DAQ-XP open interest=27932 current ask $1.80
BUY PUT DEC 119.00 DAQ-XO open interest= 5419 current ask $1.40
BUY PUT DEC 118.00 DAQ-XN open interest= 6004 current ask $1.10

Picked on November 02 at $119.80
Change since picked: - 0.02
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 6.6 million

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NewMarket - NEU - close: 62.14 change: -0.50 stop: 67.05

The early bounce on Friday morning failed at $63.86 near NEU's short-term trendline of lower highs. Most of the technical indicators are bearish or they are turning bearish. We do expect something of a bounce near $60 which is why we're suggesting two targets. Our conservative target is the $60.20-60.00 range. More conservative traders may want to exit completely here while more aggressive traders may want to sell part of their position. Our aggressive target is the $56.00 level although we may adjust that toward the rising 100-dma.

Suggested Options:
We're not suggesting new positions at this time although a failed rally under its 10-dma near $65 could be used as a new entry point.

Picked on October 31 at $ 64.30
Change since picked: - 2.16
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 354 thousand

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PACCAR Inc. - PCAR - cls: 58.53 chg: -0.68 stop: 62.51

It's becoming more clear that PCAR is sliding lower in a narrow, bearish channel. The stock dipped to short-term support at $58.00 before bouncing. The move on Friday also produced another bearish engulfing candlestick but we're not expecting another decline on Monday. Instead it looks like PCAR will bounce back toward $59 and maybe toward the 10-dma near 59.70. We're adjusting our stop loss to $61.05 and more conservative traders may want to think about placing their stop near $60. 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're not suggesting new positions at this time.

Suggested Options:
We're not suggesting new plays in PCAR at this time although another failed rally under $60 or its 10-dma could be used as a new entry point. We prefer the December puts.

Picked on October 29 at $ 59.42
Change since picked: - 0.89
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 1.4 million

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Pantry Inc. - PTRY - close: 52.31 change: -0.80 stop: 56.01*new*

PTRY displayed another round of relative weakness on Friday with a 1.5% decline. The stock fell through potential support at its exponential 200-dma and the 100-dma. We have been suggesting that a move through the $52.50 level was another entry point to buy puts and PTRY provided that decline on Friday. Our target is the $48.00-47.00 range but we do expect a bounce on PTRY's initial test of the $50 level. We do not want to hold over the November 16th earnings report. We are adjusting our stop loss to $56.01

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 55.00 PQR-XK open interest= 91 current ask $4.40
BUY PUT DEC 50.00 PQR-XJ open interest=161 current ask $1.90

Picked on October 29 at $ 54.05
Change since picked: - 1.74
Earnings Date 11/16/06 (confirmed)
Average Daily Volume = 383 thousand

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NASDAQ-100 ETF - QQQQ - cls: 41.93 chg: -0.11 stop: 42.81

The QQQQs hit a new two-week low on Friday but bulls aren't giving up without a fight. Traders bought the dip even though the technicals are turning bearish. We would still consider new put positions as long as the Qs are under $42.25. Our target is the $40.25-40.00 range, which might be a little optimistic given potential support at its rising 50-dma. FYI: More aggressive traders may want to put their stop above the $43.00 mark!

Suggested Options:
We are suggesting the December puts. Our trigger to open plays is at $41.75.

BUY PUT DEC 43.00 QQQ-XQ open interest= 33942 current ask $1.50
BUY PUT DEC 42.00 QQQ-XP open interest=132820 current ask $0.95
BUY PUT DEC 41.00 QQQ-XO open interest=166786 current ask $0.60

Picked on November 02 at $ 41.75
Change since picked: + 0.18
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 106 million

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Semiconductor HOLDRs - SMH - cls: 33.05 chg: -0.23 stop: 34.15

The SOX semiconductor index managed a bounce from the 445 level but the SMH displayed relative weakness and dipped under support at $33 and its 100-dma before bouncing back to close with a 0.18% loss. The SMH is not an exact replica of the SOX. It's an EFT of 20 stocks in the semiconductor industry. Thus far the SMH appears to be showing more weakness than the SOX. Friday's decline to $32.75 was enough to hit our trigger and open the play at $32.95. Our target is the $31.50-31.40 range. More conservative traders may want to wait for a new relative low (32.74) before initiating new plays.

Suggested Options:
We are suggesting the December puts. Our trigger to open positions is at $32.95.

BUY PUT DEC 35.00 SMH-XG open interest=11379 current ask $2.25
BUY PUT DEC 32.50 SMH-XZ open interest= 3033 current ask $0.80

Picked on November 03 at $ 32.95 <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 17.7 million

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Univ.Forest Prod. - UFPI - cls: 43.81 chg: -0.38 stop: 48.05

The sell-off in shares of UFPI continued on Friday and it might be picking up speed. The stock lost 0.85% but volume came in relatively strong 18-month low. We're not suggesting new positions at this time. More conservative traders may want to tighten their stops. We're aiming for a decline into the $41.00-40.00 range.

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

Picked on October 24 at $ 46.13
Change since picked: - 2.32
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: 146.69 chg: -1.37 stop: n/a

BSC continues to see profit taking and the technical indicators are growing more bearish. 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.

Suggested Options:
We're not suggesting new strangles on BSC.

Picked on October 22 at $150.19
Change since picked: - 3.50
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Cephalon - CEPH - close: 70.25 change: +0.00 stop: n/a

Warning! We were expecting a big post earnings move in CEPH and it failed to appear. The company reported on Thursday night and shares saw some volatility in after hours but Friday's session closed with the stock unchanged. More conservative traders may want to exit their strangle positions immediately to limit any losses. We still suspect that CEPH is poised for a big move so we're going to keep the play open at least for a few more days. We're not suggesting new plays at this time. 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.

Suggested Options:
We're not suggesting new strangles in CEPH.

Picked on October 29 at $ 69.35
Change since picked: + 0.90
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

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ConocoPhillips - COP - close: 60.97 chg: +1.27 stop: n/a

We are quickly running out of time for COP to perform. November options expire in two weeks and COP needs to move several points for this play to have a chance. More conservative traders may want to be thinking about an early exit or lowering their target to break even. We're going to do the latter and adjust our target to breakeven at $1.15. We're not suggesting new positions. Our suggested options were the November $65 call (COP-KM) and the November $55 put (COP-WK).

Suggested Options:
We're not suggesting new strangles in COP.

Picked on October 15 at $ 60.03
Change since picked: + 0.94
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

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Blue Nile - NILE - cls: 35.77 chg: -0.21 stop: n/a

The post-earnings sell-off has been tough on NILE but not sharp enough for our strangle play to turn profitable yet. The decline in NILE under $36 and its 50-dma is definitely bearish but it may be time for a bounce. We're not suggesting new positions at this time. 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).

Suggested Options:
We're not suggesting new strangles on NILE.

Picked on October 29 at $ 38.92
Change since picked: - 3.15
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

Whole Foods - WFMI - close: 46.26 change: -13.86 stop: n/a

Target achieved and surpassed. Thursday night WFMI reported earnings and with that report came an earnings and revenue warning. Shares traded down to $51.50 in after hours on Thursday night due to the news so we adjusted our strangle exit from $5.40 to $7.50. It looks like we were too conservative. The stock gapped open at $47.49 and closed with a 23% loss. The put side of our strangle was the December $60 put (FMQ-XL) and the option gapped open to trade at $12.10 before spiking to almost $14. The gap open puts our exit at $12.10 instead of $7.50. Our estimated cost was $3.15.

Picked on October 29 at $ 64.75
Change since picked: - 4.63
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.1 million
 

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