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Call Updates

CNOOC Ltd - CEO - close: 87.20 change: -0.35 stop: 82.89

Crude oil futures slipped again but the oil indices managed to close in the green thanks to a generally widespread market rally on Tuesday. Unfortunately, CEO dipped lower as it continues to digest the Friday gains. We would hesitate about opening new bullish positions in CEO at this time. It looks like shares might dip back towards $86 or its 10-dma just above $85. Broken resistance near $85 should now act as support so more conservative traders may want to raise their stops. Our target is the $89.50-90.00 range.

Picked on November 09 at $ 85.52 *gap higher*
Change since picked: + 1.68
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 264 thousand

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Cerner Corp. - CERN - close: 49.44 chg: -0.18 stop: 46.90

Bulls bought the dip at $48.40 (more than once) on Tuesday and CERN bounced sharply from its lows thanks to the afternoon market rally. This might be used as a new bullish entry point in CERN but we need to suggest caution since the NWX networking index is starting to look short-term overbought since it's up seven days in a row. More conservative traders may want to adjust their stops closer to the $48 level. Our target is the $52.00-52.50 range.

Picked on October 30 at $ 48.05
Change since picked: + 1.39
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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Deere & Co. - DE - close: 89.85 change: +1.23 stop: 84.95*new*

Shares of DE continue to rally. The stock added 1.38% and is nearing the $90 level. Today's gain helped push the daily chart's MACD indicator into a new buy signal. We are not suggesting new positions at this time. We are going to raise our stop loss to $84.95. There is probably some resistance at its October high (90.47) but shares have more significant resistance near $92.00-92.50 from last May. We'll use a $91.50-92.00 target. We do not want to hold over the November 21st earnings report.

Picked on November 08 at $ 87.45
Change since picked: + 2.40
Earnings Date 11/21/06 (confirmed)
Average Daily Volume = 2.7 million

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Fomento Econo. - FMX - close: 102.98 chg: +1.43 stop: 97.99

On Monday traders bought the dip in FMX near the $100 level and Tuesday witnessed a continuation of the rally. FMX closed at a new high on above average volume. It's not too late to consider new positions if you missed yesterday's dip. The P&F chart looks very positive with a bullish triangle breakout pattern with a $121 target. Our stop loss is at $97.99 but more conservative traders might want to tighten theirs. Our target is the $107.00-110.00 range.

Picked on November 08 at $102.09
Change since picked: + 0.89
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand

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GlobalSantaFe - GSF - close: 55.62 chg: +0.62 stop: 49.39

GSF has been showing relative strength this week in the face of sliding crude oil prices. Yesterday the stock got a boost after it announced a $1.5 billion four-year contract extension from BHP. It's worth noting that Monday's rebound was fueled by stronger than average volume and pushed shares back above the 200-dma. Our target is the $57.50-58.00 range.

Picked on November 05 at $ 52.39
Change since picked: + 3.23
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 3.4 million

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Holly Corp. - HOC - close: 51.36 change: -0.00 stop: 47.95

Shares of HOC turned around on Monday after traders bought the dip near $49.20. Monday's session produced a bullish engulfing candlestick pattern. Unfortunately, the stock failed to produce any sort of bullish follow through higher today. Overall the pattern remains bullish but we're somewhat concerned by the slide in crude oil futures. We'd still consider new positions with HOC above $50 but you may want to tighten your stop loss. Our target is the $54.90-55.00 range.

Picked on November 05 at $ 50.75
Change since picked: + 0.61
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 1.1 million

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Morgan Stanley - MS - close: 78.23 chg: +0.90 stop: 74.49

The last couple of sessions have been somewhat volatile for MS but the general trend has been up. Traders bought the dip this morning near $76.65 and MS closed above resistance near the $78 level. Our short-term target is the $79.90-80.00 range but more aggressive traders may want to aim higher since the P&F chart points to an $83 target.

Picked on November 12 at $ 76.68
Change since picked: + 1.55
Earnings Date 12/20/06 (unconfirmed)
Average Daily Volume = 4.1 million

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Petroleo Brasileiro - PBR - cls: 90.88 chg: +1.44 stop: 87.99

PBR trades in the U.S. as an ADR so it's prone to gap opens. On Monday the stock gapped open lower and closed under the $90 level. The situation wasn't looking very positive but the stock bounced today with a gap open higher and a close with a 1.6% gain. The stock's trend of higher lows is still in affect so the pull back to $90 can be used as a new bullish entry point. Our target is the $95.00-96.00 range. FYI: PBR is a Brazilian 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: + 0.83
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.5 million

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FreightCar Amer. - RAIL - close: 57.07 change: +1.49 stop: 53.49

Shares of RAIL out performed its peers in the railroad industry. The Dow Jones Railroad index lost 2.5% but shares of RAIL added 2.68% and on above average volume, which is bullish. RAIL's P&F chart is bullish and points to a $68 target. Our target is the $59.75-60.00 range.

Picked on November 08 at $ 56.08
Change since picked: + 0.99
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 334 thousand

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Transocean - RIG - close: 75.67 change: -0.90 stop: 71.99

Warning! The trading in RIG isn't looking too healthy. On Monday the stock broke down under the $75 level. Today's session wasn't much better with an intraday high at $75.27 before churning flat to down. The daily chart's technical indicators are all starting to hint at bearish signals. More conservative traders may want to consider tighter stops to reduce their risk. We're not suggesting new positions at this time. Currently we have two targets for RIG. 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: + 0.60
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 7.6 million

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Schlumberger - SLB - cls: 64.28 chg: +1.08 stop: 60.95

Shares of oil service stock SLB are bouncing from its trendline of higher lows. Unfortunately, the pull back to this trendline has thrown a bearish shadow over some of the daily technical indicators. We would still consider new bullish positions but if you're opening new plays (or even if you're not) you may want to tighten your stop loss toward $62 and maybe $62.50. Our target is the $67.50-68.00 range.

Picked on November 05 at $ 63.50
Change since picked: + 0.78
Earnings Date 10/20/06 (confirmed)
Average Daily Volume = 9.8 million

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Thomas & Betts - TNB - close: 52.28 chg: +0.08 stop: 49.90

Monday's rally in TNB seemed to run out of steam on Tuesday. Shares churned sideways today. Overall the pattern continues to look bullish thanks to a breakout from a bull flag pattern. We do see some resistance at the $54.00 level but we are aiming for the $56.00-57.00 range. Currently the P&F chart points to a $77 target.

Picked on November 12 at $ 51.36
Change since picked: + 0.92
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand

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Whirlpool - WHR - close: 89.49 change: +0.09 stop: 86.99

On Monday shares of WHR produced an intraday spike over resistance at the $90 level to hit an intraday high of $90.68. This was more than enough to open the play with our suggested trigger to buy calls at $90.15. Unfortunately, the Monday strength faded and the profit taking continued on Tuesday morning with a pull back toward the $88 level. The $88 level was relatively close to the 38.2% Fibonacci retracement level of WHR's recent rally and traders bought the dip. The bounce picked up speed on Tuesday afternoon with the market's rally. More aggressive traders may want to buy today's intraday bounce. We would wait for another breakout over the $90 level before considering new positions. Our target is the $94.75-95.00 range.

Picked on November 13 at $ 90.15
Change since picked: + 0.00
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Cardinal Health - CAH - cls: 62.62 chg: +0.61 stop: 64.85

Bears are having a hard time getting any sort of follow through lower with the major averages hitting new yearly highs. CAH hit a new relative low on Monday but the stock reversed and spiked to $63.60 intraday today. The stock did close off its best levels of the day thanks in part to resistance at its three-week trendline of lower highs. We would not suggest new positions at this time. Wait for a new move under $62.00 or a new relative low under $61.60 before initiating plays. More conservative traders may want to tighten their stops toward $64.00. 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 10 at $ 61.99
Change since picked: + 0.63
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 1.3 million

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Capital One Finc. - COF - cls: 77.05 chg: -0.45 stop: 80.05

Shares of COF are under performing the major market indices and its peers in the financials but we would still avoid opening new put plays at this time. More conservative traders may want to tighten their stops or exit early. It appears that COF has developed new support near $76.00. Nimble traders may want to try and exit early again next time COF trades under $76.50. Currently our target is the $75.10-75.00 range.

Picked on October 31 at $ 79.33
Change since picked: - 2.28
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 2.4 million

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Freeport McMoran - FCX - cls: 56.99 chg: -0.94 stop: 62.01

It has been a volatile couple of sessions for FCX. On Monday the copper producers were trading lower and shares of FCX dipped to its simple 200-dma near $56 before bouncing. The stock ticked higher again this morning but the bounce ran out of gas and shares lost 1.6% by the closing bell. More conservative traders may want to consider adjusting their stops toward the $60 level. We have two targets on FCX. Our conservative target is the $55.25-55.00 range. Our aggressive target is the $51.00-50.00 range.

Picked on November 08 at $ 59.05
Change since picked: - 2.06
Earnings Date 10/17/06 (confirmed)
Average Daily Volume = 3.7 million
 

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: 151.89 chg: +1.70 stop: n/a

BSC has reversed higher and appears to have broken out from a bull flag pattern. Due to the turn around we're adding BSC as a new call candidate to the newsletter. As a strangle play we're not suggesting new positions and only have three days left. Given our time frame we're adjusting our target to breakeven at $4.00 (estimated cost). The options in our play were the the November 155 call (BSC-KK) and the November 145 put (BSC-WI).

Picked on October 22 at $150.19
Change since picked: + 1.70
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Caterpillar - CAT - close: 60.36 chg: +0.84 stop: n/a

CAT managed a 1.4% bounce and once again crossed the $60.00 mark offering readers another entry point to open strangle plays. The options in our strangle are the December $65 call (CAT-LM) and the December $55 put (CAT-XK). Our estimated cost was about $0.75. We want to exit if either options rises to $1.50.

Picked on November 08 at $ 60.10
Change since picked: + 0.26
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

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Cephalon - CEPH - close: 75.39 change: +0.53 stop: n/a

CEPH is breaking out over the $75 level and looks poised to move higher. Keep an eye on the call side of our strangle play. We are not suggesting new strangle plays in CEPH. 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: + 6.04
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

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ConocoPhillips - COP - close: 63.46 chg: +0.39 stop: n/a

Time is almost up. We have three days left. November options expire after Friday. We're not suggesting new positions. 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) to salvage their capital. 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: + 3.43
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

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Blue Nile - NILE - cls: 36.19 chg: +0.49 stop: n/a

NILE is trying to rebound and shares added 1.3% on Tuesday. We are 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: - 2.73
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

Vimpel Comm. - VIP - close: 66.65 chg: -0.51 stop: 62.49

Target achieved. Shares of VIP hit our target on Monday and again today with intraday spikes into the $67.50-68.00 range. Overall the pattern is still bullish so traders may want to keep an eye on the stock for a bounce form the $64-65 region as a potential entry point. Don't forget that we would not hold over the company's earnings report expected sometime this month.

Picked on October 12 at $ 62.17
Change since picked: + 4.48
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Dropped Puts

Advanced Micro Dev. - AMD - cls: 21.34 chg: +0.14 stop: 22.05

It's time to go! Strength in shares of Intel (INTC) and a few other semiconductor stocks produced a bullish breakout in the SOX semiconductor index. We do not want to be holding puts with the SOX breaking out so we're suggesting an immediate exit in AMD even though the stock is under performing its peers.

Picked on October 29 at $ 20.86
Change since picked: + 0.48
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 23.0 million

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Amazon.com - AMZN - close: 41.51 chg: +1.52 stop: 40.25

We have been stopped out of AMZN at $40.25. Call it a short squeeze or call it buying ahead of the holiday shopping season but whatever the reason shares of AMZN looked pretty strong. The stock rose 3.8% with a surge of volume on the afternoon part of the rally. Over the weekend we suggested that more conservative traders may want to exit early given the breakout over $39.00. In hindsight that would have been a good move.

Picked on October 29 at $ 38.24
Change since picked: + 3.27
Earnings Date 10/24/06 (confirmed)
Average Daily Volume = 7.9 million

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Centex - CTX - close: 52.50 change: +1.97 stop: 52.55

We have been stopped out of CTX at $52.55. There has been a sharp rebound in the homebuilders over the last few sessions. Yesterday we heard Cramer talking up one of the builders and today D.R.Horton (DHI) came out with better than expected earnings. Add to this list another decline in bond yields, which puts pressure on mortgage rates, and it's not too surprising to see a bounce in the group. Today's breakout over the 50-dma could be a turning point for CTX but the stock has additional resistance near $55 plus its 200-dma just under $55.

Picked on November 07 at $ 49.75
Change since picked: + 2.75
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Lehman Brothers - LEH - cls: 74.92 chg: +1.55 stop: 75.55

Ouch! This has been a painful week for the LEH bears. The stock has reversed the 3% loss and now shares are trading back above the 50-dma and minor resistance at the $74 level. More aggressive traders may want to keep the play open since the stock is still under the $75 level. We're suggesting an early exit to avoid further losses. We're concerned that the XBD broker-dealer index looks poised to breakout over resistance and complete a bullish cup-and-handle pattern.

Picked on November 05 at $ 74.43
Change since picked: + 0.49
Earnings Date 12/13/06 (unconfirmed)
Average Daily Volume = 3.6 million

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Pantry Inc. - PTRY - close: 53.00 change: +1.80 stop: 54.05

We are suggesting an immediate exit in PTRY. It was our plan to exit Wednesday at the closing bell to avoid the company's earnings report due out on Thursday. However, the strength in the major averages has fueled a 3.5% bounce in PTRY and it looks like shares are poised to continue higher.

Picked on October 29 at $ 54.05
Change since picked: - 1.05
Earnings Date 11/16/06 (confirmed)
Average Daily Volume = 383 thousand

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Univ.Forest Prod. - UFPI - cls: 47.00 chg: +1.17 stop: 46.13

We have been stopped out of UFPI at $46.13. The stock managed to breakout over minor resistance at the $46 level this morning. The market's afternoon rally only added fuel to UFPI's strength.

Picked on October 24 at $ 46.13
Change since picked: + 0.87
Earnings Date 10/16/06 (confirmed)
Average Daily Volume = 192 thousand

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Washington Group. - WGII - cls: 57.38 chg: +1.42 stop: 58.51

We are abandoning the put play in WGII and suggesting an early exit. There is still a chance that WGII will reverse under the $58.00 level and its 50-dma but right now, given the market strength, and WGII's sharp reversal we're going to cut our losses here before they get any worse.

Picked on November 08 at $ 55.40
Change since picked: + 1.98
Earnings Date 11/06/06 (confirmed)
Average Daily Volume = 195 thousand
 

Dropped Strangles

None
 

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