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Call Updates

CNOOC Ltd - CEO - close: 83.90 change: -0.89 stop: 82.89

Crude oil futures turned lower following yesterday's gains. The commodity lost $1.09 to close under $59 a barrel. This weighed on the oil sector indices and shares of CEO. Volume in CEO came in above average, which is bearish given the decline. Yet thus far the overall pattern remains bullish although momentum is fading and a drop under $83 could be bad news for the bulls. We're still waiting for a breakout over resistance at the $85.00 level. Our suggested entry point to buy calls is at $85.25. If triggered our target is the $89.50-90.00 range.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 264 thousand

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Cerner Corp. - CERN - close: 50.27 chg: +1.32 stop: 46.90

Networking stocks continued to rally on Tuesday and this time shares of CERN decided to participate. The stock soared 2.69% and broke out over round-number, psychological resistance at the $50.00 mark. Furthermore CERN broke out higher on above average volume which is bullish. Our target is the $52.00-52.50 range.

Picked on October 30 at $ 48.05
Change since picked: + 2.22
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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GlobalSantaFe - GSF - close: 53.60 chg: -0.70 stop: 49.39

After two days of sharp gains GSF hit some profit taking today down 1.28%. A pull back in crude oil futures didn't help matters. We remain optimistic but GSF is facing technical resistance with the 200-dma near $55.00. A dip or bounce near the $52.00-52.50 region could be used as a new entry point. Our target is the $57.50-58.00 range.

Picked on November 05 at $ 52.39
Change since picked: + 1.21
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 3.4 million

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Holly Corp. - HOC - close: 48.99 change: -1.07 stop: 47.95*new*

HOC produced another day or relative weakness with a 2.1% decline. We are concerned. Technical indicators are starting to turn negative. Lack of follow through higher on last Friday's breakout is also a key event. More conservative traders may want to exit early right here to limit losses. We're raising our stop loss to $47.95 and we're not suggesting new positions with HOC under $50.00.

Picked on November 05 at $ 50.75
Change since picked: - 1.76
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 1.1 million

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Petroleo Brasileiro - PBR - cls: 90.11 chg: -0.24 stop: 85.65

A dip in crude oil back under $59 a barrel put the brakes on the rally in PBR. Fortunately, the profit taking in PBR was pretty mild. This may have been due to positive analyst comments from Lehman Brothers. We would still consider new positions here but readers have a choice. You could wait for a new relative high over $91.40 or wait for a pull back toward $89 and its 10-dma as a new entry point. Our target is the $95.00-96.00 range. FYI: PBR is a Brasilian stock traded as an ADR here in the U.S. One risk traders are facing is the company's earnings report. We cannot find a specific date or even a history of recent earnings reports. The risk is that they announce a negative report while we're trading them.

Picked on November 06 at $ 90.05
Change since picked: + 0.06
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.5 million

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Transocean - RIG - close: 75.65 change: -0.87 stop: 69.99

RIG suffered some profit taking today but it may prove to be a new entry point. Traders bought the dip, twice, near $74.75 and the rebound pushed shares back above the $75 level. We would consider new positions right here. We have two targets. Our conservative target is the $79.50 level. Our aggressive target is the $84.00 level.

Picked on November 05 at $ 75.07
Change since picked: + 0.58
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 7.6 million

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Schlumberger - SLB - cls: 64.01 chg: -0.34 stop: 60.95

SLB is another oil stock that endured a mild pull back today. Traders bought the dip at $63.25 and SLB still looks poised to breakout over the $65 level soon. Our target is the $67.50-68.00 range. SLB is an oil services company and the services sector tends to be a little more volatile than the rest of the oil sector.

Picked on November 05 at $ 63.50
Change since picked: + 0.51
Earnings Date 10/20/06 (confirmed)
Average Daily Volume = 9.8 million

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Vimpel Comm. - VIP - close: 64.79 chg: -0.20 stop: 62.49

We do not see any changes from our previous updates. We're still suggesting an early exit for conservative traders and we're not suggesting new positions. Don't forget that we're dealing with a rising environment of risk due to the earnings report. 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.

Picked on October 12 at $ 62.17
Change since picked: + 2.62
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Alcon Inc. - ACL - close: 106.18 chg: -0.07 stop: 110.01

In spite of the market's strength today shares of ACL still closed in the red. Shares rallied to $107.48 before rolling over again. This might be a new entry point to buy puts but we'd be careful opening new put plays with the major averages posting gains! More conservative traders may want to tighten their stops toward the $108 level. Our target is the $100.10-100.00 range.

Picked on October 31 at $105.75
Change since picked: + 0.43
Earnings Date 10/23/06 (confirmed)
Average Daily Volume = 520 thousand

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Advanced Micro Dev. - AMD - cls: 21.56 chg: +0.17 stop: 22.05

Semiconductor stocks continued to rebound on Tuesday. The SOX index rose 1.9% but remains under technical resistance at its 200-dma (for now). Shares of AMD under performed its peers with a 0.79% gain and remains under resistance at the $22.00 level. Yesterday we suggested that more conservative traders may want to exit early and cut their losses now and we're repeating that suggestion today. We're going to hang on another day or two and see if AMD reverses at the $22 level or breaks out. We're not suggesting new positions with AMD above $20 at this time. Our target is the $17.50-17.00 range.

Picked on October 29 at $ 20.86
Change since picked: + 0.70
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 23.0 million

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Amazon.com - AMZN - close: 38.77 chg: +0.56 stop: 40.25

Tuesday proved to be a strong day for Internet stocks. The INX Internet index rose 1.3%. Shares of AMZN added 1.4% and closed at a new three-month high. Today's gain follows yesterday's bounce from its rising 10-dma. The stock is quickly approaching resistance at the $39.00 level. We were expecting AMZN to pull back and fill the gap from late October but right now tech stocks seem too strong. Will AMZN reverse at $39.00 or additional resistance at $40.00? If you're looking for a new entry point wait for the failed rally to appear. 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.

Picked on October 29 at $ 38.24
Change since picked: + 0.53
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 7.9 million

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Cardinal Health - CAH - cls: 64.04 chg: -0.14 stop: 64.85

The bounce in CAH is struggling under the $65.00 level. This is good news but we're going to stick to our plan regarding entry points. Right now we're waiting for a breakdown under support at $63 and again near $62.35. Our suggested entry point to buy puts is $61.99. If triggered our target is the $58.00-57.50 range. Be prepared for a bounce on CAH's initial test of the $60 level.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 1.3 million

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Capital One Finc. - COF - cls: 77.57 chg: -1.11 stop: 80.05

The oversold bounce in COF may already be fading. Shares lost 1.4%. We remain bearish but we're not suggesting new positions at this time. Our target is the $75.10-75.00 range.

Picked on October 31 at $ 79.33
Change since picked: - 1.76
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 2.4 million

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Centex - CTX - close: 49.69 change: -0.65 stop: 52.55

Homebuilders are under performing the market. The DJUSHB home construction index lost 1.1% thanks to some negative earnings guidance from TOL and BZH. Shares of CTX lost 1.29% and closed under support at $50.00 and its 100-dma. We were suggesting a trigger to buy puts at $49.75 so the play is now open. Our target is the $45.50-45.00 range.

Picked on November 07 at $ 49.75
Change since picked: - 0.06
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Intercont.Exchange - ICE - cls: 87.12 chg: +2.22 stop: 82.55

ICE continued to bounce on Tuesday and the stock is challenging resistance in the $89-90 range. Fortunately, we're still spectators at this point. We're waiting for a breakdown under support at the $80.00 level. We may want to switch directions if ICE can breakout over the $90 level. Right now our suggested entry point to buy puts is at $79.85. If triggered our target is the $75.15-75.00 range. More conservative traders may want to exit at the rising 50-dma near $75. FYI: A decline under $81.00 would reverse the P&F chart into a new sell signal. More aggressive traders may want to consider opening early positions under $81.00.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 1.6 million

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Lehman Brothers - LEH - cls: 75.50 chg: -0.65 stop: 77.01

LEH failed to see any follow through on yesterday's bullish reversal. This is good news for the bears but we're not out of the woods yet. Another strong day in the major averages could fuel another round of gains for the broker-dealers. We would wait for a new decline under $74.50 before considering new put positions. Our target is the $70.25-70.00 range.

Picked on November 05 at $ 74.43
Change since picked: + 1.07
Earnings Date 12/13/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Pantry Inc. - PTRY - close: 52.52 change: +0.48 stop: 56.01

Tuesday's trading in PTRY may prove to be a new entry point to buy puts. The stock rallied to $53.57 this morning and then began to drift lower. This looks like a failed rally under its sliding 10-dma. 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.

Picked on October 29 at $ 54.05
Change since picked: - 1.53
Earnings Date 11/16/06 (confirmed)
Average Daily Volume = 383 thousand

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Univ.Forest Prod. - UFPI - cls: 44.55 chg: -0.28 stop: 48.05

Bears can probably breathe a sigh of relief. UFPI produced a failed rally under the $46.00 level today. Traders may want to use this as a new entry point to buy puts. However, we'd be careful about starting new bearish positions with the major averages posting gains. More conservative traders may want to think about tightening their stops toward the $46 level. We're aiming for a decline into the $41.00-40.00 range.

Picked on October 24 at $ 46.13
Change since picked: - 1.02
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: 148.23 chg: -1.04 stop: n/a

BSC produced a failed rally near $150 and its 10-dma. Is this the end of its oversold bounce and the beginning of the next move lower? 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: - 1.96
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Cephalon - CEPH - close: 72.70 change: +0.79 stop: n/a

The rally continues in CEPH. The stock added 1.09% on strong volume. We're not suggesting new positions 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.

Picked on October 29 at $ 69.35
Change since picked: + 3.35
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

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ConocoPhillips - COP - close: 60.99 chg: -0.06 stop: n/a

There is no change from our previous updates on COP. Currently this play is in big trouble with the lack of a directional move. Our target is breakeven at $1.15 but more conservative traders may want to try and exit at a fraction of our estimated cost (50%, 75%, etc). We're not suggesting new positions. 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: + 0.96
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

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Blue Nile - NILE - cls: 36.05 chg: +0.20 stop: n/a

NILE produced a real oversold bounce this morning but the rebound ran out of steam at $37.33. The ensuing sell-off late this afternoon definitely looks bearish. 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).

Picked on October 29 at $ 38.92
Change since picked: - 2.87
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

NTL Inc. - NTLI - close: 27.00 chg: -0.33 stop: 26.75

Time is up for our NTLI play. It was our plan to exit today at the closing bell to avoid holding over the company's earnings report expected tomorrow.

Picked on October 26 at $ 27.41
Change since picked: - 0.41
Earnings Date 11/08/06 (confirmed)
Average Daily Volume = 2.4 million
 

Dropped Puts

CDW Corp. - CDWC - cls: 65.79 chg: +0.73 stop: 66.25

Another rally in tech stocks pushed CDWC higher this morning. We've been stopped out at $66.25. We added the play on a breakdown under support at the $64.00 level but that proved to be a bear trap. Now shares are challenging resistance in the $66.00-66.60 region.

Picked on November 02 at $ 63.90
Change since picked: + 1.89
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 762 thousand

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DIAMONDS ETF - DIA - close: 121.55 chg: +0.54 stop: 121.16

We have been stopped out of the DIA at $121.16. A follow through rally on Monday's big gain pushed the DIA to $121.88. This EFT and the DJIA index looks very overbought and way overdue for a correction but so far the bulls aren't giving up.

Picked on November 02 at $119.80
Change since picked: + 1.75
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 6.6 million

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PACCAR Inc. - PCAR - cls: 59.61 chg: +0.25 stop: 60.55

We are jumping ship with PCAR. The stock is still trading under resistance at the $60.00 level but recent moves are reversing the technicals back toward a move bullish stance. Aggressive traders may want to keep the play alive. We're suggesting an early exit before PCAR breaks out over $60 and stops us out. Really nimble traders may even want to switch to calls if PCAR trades over $60.50 or $62.50.

Picked on October 29 at $ 59.42
Change since picked: + 0.19
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 1.4 million

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NASDAQ-100 ETF - QQQQ - cls: 42.83 chg: +0.29 stop: 42.81

The bulls continued to run the show on Tuesday and the NASDAQ Composite and the NASDAQ 100 managed to breakout over resistance on an intraday basis and hit new relative highs. This pushed the Qs to 43.09 before paring its gains. That stops us out at $42.81.

Picked on November 02 at $ 41.75
Change since picked: + 1.08
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 106 million

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Semiconductor HOLDRs - SMH - cls: 33.59 chg: +0.63 stop: 34.15

We have been stopped out of SMH at $34.15. The SMH semiconductor holders rose to $34.42 intraday thanks to big gains by components ALTR, BRCM and NVLS. Unfortunately for the bulls SMH pulled back from its highs and closed under a cloud of significant moving averages.

Picked on November 03 at $ 32.95
Change since picked: + 0.64
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 17.7 million
 

Dropped Strangles

None
 

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