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Call Updates

Bear Stearns - BSC - close: 154.76 chg: +0.13 stop: 147.95

The broker-dealer stocks were inching higher on Monday. The group probably got a boost out of the rash of new merger and acquisitions announced today. Shares of BSC lagged behind its peers. The stock dipped near $154 twice but both time traders bought the dip. Our target is the $159.00-160.00 range. We do not want to hold over the mid December earnings report. FYI: More conservative traders may want to adjust their stop loss closer to the $150 level.

Picked on November 14 at $151.89
Change since picked: + 2.87
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.5 million

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FedEx - FDX - close: 117.58 chg: +0.14 stop: 113.90

We don't see any big changes from our weekend update on FDX. The stock bounced in the $116.50-117.00 region for the second time in the last three days. We see this as a new entry point to buy calls. However, it is worth noting that the market acts tired and we may be in for more of a consolidation during this holiday week. 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. FYI: We do not want to hold over the December earnings report.

Picked on November 15 at $117.15
Change since picked: + 0.33
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Fomento Econo. - FMX - close: 105.93 chg: +2.04 stop: 99.49

FMX ignored weakness in the Mexican markets and a lackluster session in the U.S. markets by producing a strong gain. Shares rose almost 2% to a new all-time high. FMX is now within striking distance of our target in the $107-110 range.

Picked on November 08 at $102.09
Change since picked: + 3.84
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand

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Gilead Sciences - GILD - close: 68.90 chg: -0.53 stop: 66.75

GILD tried to breakout over resistance at the $70.00 level again but it failed. The U.S. markets were drifting lower on Monday and the biotech index witnessed some profit taking. Our strategy remains the same. We will wait for a breakout with our suggested trigger to buy calls at $70.25. If triggered our target is the $74.74-75.00 range. Right now we have a stop loss just under technical support at its 50-dma but it's a little too wide for our comfort zone and we'll be planning to adjust it higher the first chance we get.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/17/07 (unconfirmed)
Average Daily Volume = 3.7 million

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Goldman Sachs - GS - cls: 197.45 chg: +2.41 stop: 189.95 *new*

Shares of GS continue to show relative strength. The stock added another 1.2% and is nearing our target in the $199.00-200.00 range. More conservative traders may want to think about an early exit now to lock in a gain. We're raising our stop loss to $189.95.

Picked on November 14 at $190.36
Change since picked: + 7.09
Earnings Date 12/12/06 (unconfirmed)
Average Daily Volume = 4.8 million

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KLA-Tencor - KLAC - close: 52.19 chg: +0.50 stop: 47.65

Semiconductor stocks turned out to be one of the best performing sectors on Monday. The SOX index rose 1.75%. Shares of KLAC tried to keep pace but closed with a 0.9% gain. We remain optimistic but even the semis may have trouble gaining ground if the wide market choose to consolidate. 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: + 1.38
Earnings Date 01/00/07 (unconfirmed)
Average Daily Volume = 3.9 million

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Sepracor - SEPR - close: 54.79 chg: +0.10 stop: 50.75

SEPR may have closed in the green today but the session looks more bearish. The stock spiked open after being upgraded this morning before the opening bell. Unfortunately, the open was the high for the day and SEPR drifted lower barely holding any gains. We would not be surprised to see a dip back into the $53.75-54.00 region so traders may want to wait before opening new plays. SEPR has significant resistance near $60 so we're aiming for the $59.50-60.00 range as our target.

Picked on November 19 at $ 54.69
Change since picked: + 0.10
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million

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Thomas & Betts - TNB - close: 53.21 chg: -0.47 stop: 49.90

Over the weekend we cautioned readers that TNB might be poised for some consolidation and that's what the stock produced on Monday. The dip may not be over yet so we'd wait for a pull back near $52 or its 10-dma before considering new positions. 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: + 1.85
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand
 

Put Updates

Cardinal Health - CAH - cls: 62.37 chg: -0.30 stop: 64.05

Shares of CAH spiked lower right at the open this morning but the weakness didn't last long and Monday's volume came in relatively low. We're somewhat concerned by the lack of momentum in this play and hesitate to suggest new positions. Our target is the $58.00-57.50 range. Please note that we're adjusting our stop loss to $64.05.

Picked on November 10 at $ 61.99
Change since picked: + 0.38
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 1.3 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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Caterpillar - CAT - close: 60.91 chg: -0.03 stop: n/a

There are no changes from our weekend update on CAT. We remain concerned over the stock's lack of directional movement. We're not suggesting new positions. 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: + 0.81
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

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Blue Nile - NILE - cls: 36.42 chg: +0.44 stop: n/a

We don't see any changes from our weekend update. We're not suggesting new strangle 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: - 2.50
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

Cerner Corp. - CERN - close: 48.75 chg: -0.32 stop: 47.90

We are calling it quits on CERN. The stock continued to under perform the NASDAQ and the NWX networking index. Shares lost 0.6% and look poised to continue lower. There is a chance that CERN will bounce from broken resistance and what should be support near $48.00 but we don't want to risk it. We're suggesting an early exit before the stock turns negative on us.

Picked on October 30 at $ 48.05
Change since picked: + 0.70
Earnings Date 10/19/06 (confirmed)
Average Daily Volume = 662 thousand

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Deere & Co. - DE - close: 89.41 change: -0.95 stop: 88.95

The DJIA snapped a six-day winning streak and this may have prompted some traders to do some profit taking in DE ahead of its earnings report. The stock lost just over 1% and reversed Friday's gains. It was our plan to exit today at the closing bell to avoid holding over DE's earnings report due out tomorrow.

Picked on November 08 at $ 87.45
Change since picked: + 1.96
Earnings Date 11/21/06 (confirmed)
Average Daily Volume = 2.7 million

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Morgan Stanley - MS - close: 79.31 chg: +0.19 stop: 74.49

Target achieved. The XBD broker-dealer index posted another new all-time high on Monday. Shares of MS followed with an intraday high at $80.00. Our short-term target was the $79.90-80.00 range. 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: + 2.63
Earnings Date 12/20/06 (unconfirmed)
Average Daily Volume = 4.1 million

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Oregon Steel Mills - OS - cls: 63.77 chg: +4.81 stop: 56.99

If we had been a couple of days earlier in adding OS to the play list then today's news would have worked for us. Unfortunately, news that Evraz plans to acquire OS for $2.3 billion only produced a gap-open entry point. It was our plan to buy calls on a breakout over $60.00 with a trigger to enter plays at $60.25. Today's acquisition news pushed OS to open at $64.05, which technically would have been our entry (above $60.25). It's up to you, the individual trader, if you want to keep the play open. We didn't know about any M&A news on OS over the weekend but now that the news is out we don't see a reason to hold any positions.

Picked on November 20 at $ 64.05*gap open
Change since picked: - 0.28
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 970 thousand
 

Dropped Puts

Freeport McMoran - FCX - cls: 55.63 chg: -1.77 stop: 60.26

After today's merger news we're suggesting an early exit in FCX. If you missed it this morning FCX announced a $25.9 billion deal to buy rival Phelps Dodge (PD). As is normally the case shares of FCX, the acquirer, went down but it seemed like the market approved of the deal. Shares of FCX actually spiked to $59.70 this morning. Technically the pattern in FCX continues to look bearish but we're gun shy given today's intraday moves. The stock hit our conservative target on Friday so we would rather exit now before FCX tries to bounce again. FYI: Our conservative target was the $55.25-55.00 range and our aggressive target was the $51.00-50.00 range.

Picked on November 08 at $ 59.05
Change since picked: - 3.42
Earnings Date 10/17/06 (confirmed)
Average Daily Volume = 3.7 million
 

Dropped Strangles

None
 

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