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Call Updates

Bear Stearns - BSC - close: 153.81 chg: +1.92 stop: 144.99

The XBD broker-dealer index continued to rally on Wednesday and is in the process of breaking out over resistance in the 240-242 zone, which would complete a bullish cup-and-handle pattern for the sector. Shares of BSC also continued to rally and shares added 1.2% following yesterday's breakout from its bull-flag pattern. We do expect some resistance near $155 but our target is the $159.00-160.00 range. We do not want to hold over the mid December earnings report.

Picked on November 14 at $151.89
Change since picked: + 1.92
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.5 million

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CNOOC Ltd - CEO - close: 86.76 change: -0.44 stop: 82.89

We don't see any changes from our previous updates. CEO is still consolidating flat to down and looks like it will dip toward the 10-dma or the $85 level soon. We would hesitate about opening new bullish positions in CEO at this time. 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: + 1.24
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 264 thousand

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Cerner Corp. - CERN - close: 49.60 chg: +0.16 stop: 46.90

CERN managed to out perform its peers in the networking sector on Wednesday. Shares rose just 0.3% but it appeared to be enough to breakout from a short-term bull flag pattern. Our biggest concern would be the lack of volume on today's session. 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: + 1.55
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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Deere & Co. - DE - close: 89.20 change: -0.65 stop: 84.95

DE spent the session consolidating (lower) after testing the $90 level on Tuesday. A dip or bounce near the $88 level could be used as a new entry point to buy calls. 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: + 1.75
Earnings Date 11/21/06 (confirmed)
Average Daily Volume = 2.7 million

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FedEx - FDX - close: 117.31 chg: +1.81 stop: 113.90

Transport stocks were a bright spot in the market on Wednesday. The group was lead by airlines thanks to some M&A news but the Dow Jones Transportation index rose 1.3%. Shares of FDX out performed its peers and rose 1.5% to breakout over resistance at the $117.00 level. Our suggested trigger to buy calls was at $117.15 so the play is now open. We would expect a pull back at the stock's initial test of $120 and shares might bounce around the $117.50-120.00 range for a couple of days. However, our target is the $124.00-125.00 range. The P&F chart is more optimistic with a $153 target.

Picked on November 15 at $117.15
Change since picked: + 0.16
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Fomento Econo. - FMX - close: 102.49 chg: -0.49 stop: 97.99

We don't see any changes from our previous updates on FMX. The path of least resistance still appears to be up. Readers can choose to open positions here or try and buy a dip near the 10-dma or the $100 level. 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: + 0.40
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand

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Goldman Sachs - GS - cls: 193.11 chg: +2.75 stop: 184.99

GS continued to show relative strength and managed to hit a new all-time high on an intraday basis. We don't see any changes from yesterday's play description. Traders can choose to open positions here or hope for a dip back towards $190. Our target is the $199.00-200.00 range. We do not want to hold over the December earnings report.

Picked on November 14 at $190.36
Change since picked: + 2.75
Earnings Date 12/12/06 (unconfirmed)
Average Daily Volume = 4.8 million

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Holly Corp. - HOC - close: 52.29 change: +0.93 stop: 47.95

HOC turned in a decent session adding 1.8%. A draw down in the weekly oil inventory numbers helped lift the energy stocks. Shares of HOC have shown some strength this week and look poised to post new three-month highs. Our target is the $54.90-55.00 range.

Picked on November 05 at $ 50.75
Change since picked: + 1.54
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 1.1 million

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KLA-Tencor - KLAC - close: 50.43 chg: -0.38 stop: 47.65

Looks like the rally in the semiconductor stocks stalled a bit on Wednesday. Yesterday the SOX soared and broke out over resistance but today the SOX only managed a 0.4% gain. Shares of KLAC, which hit new five-month highs yesterday, pulled back toward the $50 level. The company did have some news with the NASDAQ sending them a delisting notice over its delayed 10-Q filing. The 10-Q is delayed due to KLAC investigating its equity options plans and potential backdating. We would use the dip toward $50 as a new entry point to buy calls. Our target is the $54.50-55.00 range. The stock appears to have solid resistance at $55.00.

Picked on November 14 at $ 50.81
Change since picked: - 0.38
Earnings Date 01/00/07 (unconfirmed)
Average Daily Volume = 3.9 million

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Morgan Stanley - MS - close: 78.66 chg: +0.43 stop: 74.49

MS is still inching higher and hit another new high today. 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: + 1.98
Earnings Date 12/20/06 (unconfirmed)
Average Daily Volume = 4.1 million

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Petroleo Brasileiro - PBR - cls: 91.49 chg: +0.61 stop: 87.99

We don't see much change from our previous updates on PBR. The overall trend is still bullish but it's worth noting that some of the technical indicators are looking overbought and hinting at a new bearish signals soon (like the MACD). We also noticed that today's high appeared to "fill the gap" from Monday morning. Be on the alert for further weakness. More conservative traders may want to raise their stops! 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: + 1.44
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.5 million

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FreightCar Amer. - RAIL - close: 55.92 change: -1.15 stop: 53.49

Warning! RAIL may have produced a bearish reversal today. The stock did produce a failed rally at the $58 level this morning and the sell-off left shares with a 2% decline. This was a bit surprising given the gain in the railroad sector and the gains in the transports overall. The move today also produced what looks like a "dark cloud cover" candlestick pattern. We are not suggesting new bullish positions at this time and more conservative traders may want to tighten their stops (we'd consider adjusting the stop toward the 10-dma). Our target is the $59.75-60.00 range.

Picked on November 08 at $ 56.08
Change since picked: - 0.16
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 334 thousand

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Transocean - RIG - close: 75.59 change: +1.02 stop: 71.99

Oil service stocks turned in a decent session with the OSX index rising 1.6%. The move was potentially fueled by lower than expected numbers in the weekly oil inventories. Shares of RIG added 1.3% but failed to hold its gains above the 200-dma. We remain cautious especially with the MACD poised to produce a new sell signal. 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: + 0.52
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 7.6 million

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Schlumberger - SLB - cls: 65.45 chg: +1.17 stop: 60.95

SLB, another oil service stock, turned in a strong session rising 1.8%. Shares are now challenging resistance at the $66 level. More conservative traders may want to tighten their stop loss. Our target is the $67.50-68.00 range.

Picked on November 05 at $ 63.50
Change since picked: + 1.95
Earnings Date 10/20/06 (confirmed)
Average Daily Volume = 9.8 million

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Thomas & Betts - TNB - close: 52.76 chg: +0.48 stop: 49.90

TNB continues to rally with shares pushing past potential resistance at the $52.50 level. Today's gain (+0.9%) helped produce a new MACD buy signal. 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: + 1.40
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand

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Whirlpool - WHR - close: 88.65 change: -0.41 stop: 86.99

We are starting to grow concerned with WHR. The stock under performed all the major averages today and this is the second time in three days that WHR has failed to hold its gains over the $90 level. The failed rally has put a bearish tilt in some of the short-term technical indicators. More conservative traders may want to tighten their stops. We would wait for a new relative high before considering new positions. Our target is the $94.75-95.00 range.

Picked on November 13 at $ 90.15
Change since picked: - 1.50
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Cardinal Health - CAH - cls: 63.52 chg: +0.90 stop: 64.85

It's not surprising to see CAH trying to rebound with the major averages hitting new relative highs. Considering this environment traders may want to abandon most of their bearish strategies. CAH managed to rally toward the $64 level this afternoon before parting its gains. Conservative traders may want to cut their losses now or tighten their stops. We're adjusting our stop loss to $64.26. We're not suggesting new positions with CAT above $62.00.

Picked on November 10 at $ 61.99
Change since picked: + 1.53
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 1.3 million

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Capital One Finc. - COF - cls: 77.09 chg: +0.04 stop: 79.33*new*

COF continues to consolidate sideways. Given the short-term trend of higher lows and lower highs the stock could really go either direction from here. We're not suggesting new plays and more conservative traders may want to exit early given the market's strength. We are adjusting our stop loss to $79.33. 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: - 2.24
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 2.4 million

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Freeport McMoran - FCX - cls: 57.55 chg: +0.56 stop: 62.01

Traders bought the dip in FCX near $56 and its 200-dma and 50-dma again. We would expect a bounce back toward $59 and potentially the $60 level or its 10-dma (near 59.45). We wouldn't consider new plays unless the stock produces a clear failed rally under $60 again. 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: - 1.50
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: 153.81 chg: +1.92 stop: n/a

We have two days left for this strangle play to work out. Unfortunately, we're going to need a strong move past the $155 level to give us a chance at salvaging some capital. Given our time frame we're adjusting our exit target to $2.00. Our estimated cost was $4.00. 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: + 3.62
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Caterpillar - CAT - close: 61.45 chg: +1.09 stop: n/a

CAT added 1.8% and its technical picture it turning bullish. We're not suggesting new positions at this time. 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: + 1.35
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

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Cephalon - CEPH - close: 74.97 change: -0.42 stop: n/a

CEPH is consolidating sideways near the $75 level. 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: + 5.62
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

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ConocoPhillips - COP - close: 63.98 chg: +0.52 stop: n/a

We have two days left before this strangle play expires. Given our time frame we're adjusting our exit target to $0.50. Our estimated cost was $1.15 and we're going to need a strong move past $65 to see a chance at an exit. 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: + 3.95
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

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Blue Nile - NILE - cls: 36.84 chg: +0.65 stop: n/a

NILE is still trying to bounce and did a decent job of it today with a 1.8% gain and a move past the 50-dma. 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: - 2.08
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

GlobalSantaFe - GSF - close: 56.80 chg: +1.18 stop: 49.39

Target achieved. GSF continued to rally higher in spite of a downgrade this morning before the opening bell. Oil service stocks managed to our perform the broader market with a 1.6% gain in the OSX index. Our target in GSF was the $57.50-58.00 range. The high today was $57.63.

Picked on November 05 at $ 52.39
Change since picked: + 4.41
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 3.4 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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