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Call Updates

Bear Stearns - BSC - close: 154.95 chg: +1.14 stop: 147.95*new*

The broker-dealers hit a new all-time high today and shares of BSC followed suit with its own new all-time high ($155.91). Today's gain helped the daily chart's MACD produce a new buy signal. The short-term trend is definitely up but BSC is starting to look a little overbought. It may be time for a dip soon. Our target is the $159.00-160.00 range. We do not want to hold over the mid December earnings report. FYI: Please note that we're raising the stop loss to $147.95. More conservative traders may want to adjust theirs closer to the $150 level.

Picked on November 14 at $151.89
Change since picked: + 3.06
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Cerner Corp. - CERN - close: 49.20 chg: -0.40 stop: 47.90*new*

We are growing more concerned in CERN's waning upward momentum. The stock should still have support in the $48.00 region but some of the technical indicators are starting to turn more bearish. We're not suggesting new positions at this time. Instead we're raising the stop loss to $47.90. Our target is the $52.00-52.50 range.

Picked on October 30 at $ 48.05
Change since picked: + 1.15
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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Deere & Co. - DE - close: 89.42 change: +0.22 stop: 87.45 *new*

Shares of DE managed to hit new six-month highs this morning but the stock was unable to maintain that bullish breakout above $90 and its October peak. The move today is a failed rally and looks like a short-term bearish reversal. We can probably expect a dip toward $88 and/or its simple 10-dma. Due to our diminishing time frame we're adjusting the stop loss to $87.45. Our target is the $91.50-92.00 range. We do not want to hold over the November 21st earnings report.

Picked on November 08 at $ 87.45
Change since picked: + 1.97
Earnings Date 11/21/06 (confirmed)
Average Daily Volume = 2.7 million

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FedEx - FDX - close: 118.14 chg: +0.83 stop: 113.90

The drop in crude oil futures is good news for the transportation stocks. The Transportation index rose just over 1% and shares of FDX managed a 0.7% gain. The MACD on FDX's daily chart has produced a new buy signal. 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: + 0.99
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Fomento Econo. - FMX - close: 104.12 chg: +1.63 stop: 99.49*new*

FMX is breaking out to new highs. The stock added 1.59% and looks poised to do well tomorrow. We are going to adjust the stop loss to $99.49. Our target is the $107.00-110.00 range.

Picked on November 08 at $102.09
Change since picked: + 2.03
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand

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Goldman Sachs - GS - cls: 196.72 chg: +3.61 stop: 187.45 *new*

Leading the broker-dealer stocks to new all-time highs was GS. The stock rose 1.8% hitting its own record highs. The MACD on the daily chart is nearing a new buy signal. We're raising the stop loss to $187.45. 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: + 6.36
Earnings Date 12/12/06 (unconfirmed)
Average Daily Volume = 4.8 million

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KLA-Tencor - KLAC - close: 51.05 chg: +0.62 stop: 47.65

Semiconductor stocks dipped lower this morning thanks to AMAT missing earnings estimates last night. Fortunately, traders bought the dip and shares of KLAC were able to turn around. 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: + 0.24
Earnings Date 01/00/07 (unconfirmed)
Average Daily Volume = 3.9 million

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Morgan Stanley - MS - close: 78.68 chg: +0.02 stop: 74.49

MS hit a new all-time high at $79.50 this morning. The pull back from its highs might indicate that the rally is running out of gas. However, now that the XBD broker-dealer index has broken out over resistance shares of MS should have something of a tailwind behind it. 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: + 2.00
Earnings Date 12/20/06 (unconfirmed)
Average Daily Volume = 4.1 million

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FreightCar Amer. - RAIL - close: 57.00 change: +1.08 stop: 53.49

The drop in oil prices was good news for the transports and the transportation sector rose over a percent today. The railroads did even better with a 1.48% gain and RAIL out performed its peers with a 1.9% gain. This is good news since yesterday the stock appeared to produce a bearish reversal. Our target is the $59.75-60.00 range.

Picked on November 08 at $ 56.08
Change since picked: + 0.92
Earnings Date 10/26/06 (confirmed)
Average Daily Volume = 334 thousand

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Thomas & Betts - TNB - close: 53.78 chg: +1.02 stop: 49.90

TNB continued to rally adding 1.9% on above average volume, which is normally a bullish sign. The stock is now challenging potential resistance at its October high near $54. Don't be surprised to see a pull back from here and a dip near $51 or $52 could be used as a new entry point to buy calls. Our target is 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: + 2.42
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand

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Whirlpool - WHR - close: 88.33 change: -0.32 stop: 86.99

WHR dipped toward short-term support near its 10-dma and the $87.75-88.00 range. If we don't see a bounce from here tomorrow we might just pull the plug and exit early to limit any losses. We've been concerned with the recent failed rallies over the $90 level. We'd hesitate to open any new bullish positions. Our target is the $94.75-95.00 range.

Picked on November 13 at $ 90.15
Change since picked: - 1.82
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Cardinal Health - CAH - cls: 63.39 chg: -0.13 stop: 64.85

We don't see any changes from our previous updates on CAH. Studying the intraday chart it looks like the stock is poised to move lower. More aggressive traders may want to think about starting new bearish positions (and you might want to consider a tighter stop near $64.00). We're not suggesting new plays until we see another decline under $62.00. Our target is the $58.00-57.50 range.

Picked on November 10 at $ 61.99
Change since picked: + 1.40
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 1.3 million

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Capital One Finc. - COF - cls: 75.60 chg: -1.49 stop: 79.33

The trading in COF was surprising today. Banking stocks managed to trek higher yet shares of COF broke down from its recent sideways consolidation. This is definitely a bearish move and volume came in above average on the breakdown. COF almost hit our target in the $75.10-75.00 range. More aggressive traders may want to consider aiming lower after seeing today's breakdown.

Picked on October 31 at $ 79.33
Change since picked: - 3.73
Earnings Date 10/18/06 (confirmed)
Average Daily Volume = 2.4 million

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Freeport McMoran - FCX - cls: 56.16 chg: -1.39 stop: 60.26*new*

The big decline in crude oil makes gold less attractive as a hedge and gold stocks stumbled to hefty losses. The XAU gold & silver index lost 3.7%. Shares of FCX, a copper and gold producer, lost 2.4% and reversed near the $58 level for the second time in three days. The stock is testing support near $56 and its 200-dma and 50-dma. Please note that we are adjusting the stop loss to $60.26. 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: - 2.89
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: 154.95 chg: +1.14 stop: n/a

Tomorrow is our last day before November options expire in this strangle play. We recently adjusted our exit target to $2.00, which means BSC would need to trade near $157 tomorrow. You may want to adjust your target as needed. Our estimated cost was $4.00. The options in our play were the November 155 call (BSC-KK) and the November 145 put (BSC-WI).

Picked on October 22 at $150.19
Change since picked: + 4.76
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.6 million

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Caterpillar - CAT - close: 61.37 chg: -0.08 stop: n/a

CAT spent Thursday's session trading sideways. 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: + 1.27
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

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Cephalon - CEPH - close: 77.20 change: +2.23 stop: n/a

CEPH soared to new eight-month highs with today's 2.9% gain. The call side of our strangle is nearing our target. Our estimated cost was about $3.45. The options in our strangle are the December $75 call (CQE-LO) and the December $65 put (CQE-XM). We plan to see if either option rises to $4.90 or more. Currently the December $75 call is trading at $4.10bid/$4.30ask.

Picked on October 29 at $ 69.35
Change since picked: + 7.85
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 2.0 million

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ConocoPhillips - COP - close: 62.27 chg: -1.71 stop: n/a

It's game over for our strangle in COP. Unless the stock moves drastically one direction or the other this strangle will expire. 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: + 2.24
Earnings Date 10/25/06 (confirmed)
Average Daily Volume = 9.8 million

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Blue Nile - NILE - cls: 36.49 chg: -0.35 stop: n/a

We don't see any changes from our previous updates on NILE. 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: - 2.43
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

CNOOC Ltd - CEO - close: 85.44 change: -1.32 stop: 82.89

We are exiting all of our bullish oil plays. Crude oil futures were hammered today with its worst one-day loss in over a year. Oil futures fell 4.3% to $56.26, which is under its recent trading range. There is a chance that shares of CEO might bounce near the $85 level but we don't want to risk it and would rather exit early!

Picked on November 09 at $ 85.52 *gap higher*
Change since picked: - 0.08
Earnings Date 10/31/06 (confirmed)
Average Daily Volume = 264 thousand

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Holly Corp. - HOC - close: 51.36 change: -0.93 stop: 47.95

Now that crude oil futures are crashing to new lows for the year we're exiting our call plays on oil stocks. Technically shares of HOC should find some support at the $50 level but we don't want to risk it.

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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Petroleo Brasileiro - PBR - cls: 89.24 chg: -2.25 stop: 87.99

We're exiting our bullish oil plays after crude oil's big decline today. Shares of PBR lost 2.4% and its MACD indicator produced a new sell signal. Today's session also produced a bearish engulfing candlestick pattern and looks poised to break its multi-week trendline of support. We're suggesting an early exit!

Picked on November 06 at $ 90.05
Change since picked: - 0.81
Earnings Date 00/00/06 (unconfirmed)
Average Daily Volume = 2.5 million

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Transocean - RIG - close: 72.56 change: -3.03 stop: 71.99

Yesterday's strength in RIG quickly vanished as crude oil futures plunged to their lowest levels in a year. Today's session looks like a bearish breakdown and sell signal in RIG. We're suggesting an early exit even though the stock might bounce near $72 and its 50-dma.

Picked on November 05 at $ 75.07
Change since picked: - 2.51
Earnings Date 11/02/06 (confirmed)
Average Daily Volume = 7.6 million

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Schlumberger - SLB - cls: 62.65 chg: -2.80 stop: 60.95

SLB is another oil service stock that violently reversed lower as crude oil futures plunged. Shares of SLB are on the verge of breaking their rising trendline of support and the technical indicators are starting to turn bearish. We're suggesting an early exit to limit any losses.

Picked on November 05 at $ 63.50
Change since picked: - 0.85
Earnings Date 10/20/06 (confirmed)
Average Daily Volume = 9.8 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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