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Call Updates

Bear Stearns - BSC - close: 156.16 chg: +1.40 stop: 149.90*new*

Broker-dealer stocks hit new highs today. The XBD index rose to another new all-time high thanks to an analyst upgrade on the sector. Shares of BSC also hit a new high with a 0.9% gain, although it's worth noting that volume has been light. Normally light volume on the rally is a danger sign but the lack of volume is probably due to the Thanksgiving holiday coming up. Shares look poised to move higher but we're not suggesting new positions at this time. Our target is the $159.00-160.00 range. We do not want to hold over the mid December earnings report. Please note that we're raising the stop loss to $149.90.

Picked on November 14 at $151.89
Change since picked: + 4.27
Earnings Date 12/14/06 (unconfirmed)
Average Daily Volume = 1.5 million

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FedEx - FDX - close: 117.58 chg: +0.00 stop: 113.90

Transportation stocks managed another gain in spite of the rise in crude oil today. Yet shares of FDX failed to gain any ground and closed unchanged on the session. Overall the pattern continues to look bullish but we're growing somewhat worried by the lack of upward follow through on the recent breakout over resistance near $117. As it looks now the stock appears poised to drift toward $117 or even $116 before moving higher. Keep an eye on the simple 10-dma near $116.20 as potential support. 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. 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: 105.46 chg: -0.47 stop: 99.49

FMX experienced some profit taking after yesterday's big gains. We remain positive on the stock but we're not suggesting new positions at this time. Our target is the $107-110 range. FYI: Shares hit a new all-time high of $106.50 this morning.

Picked on November 08 at $102.09
Change since picked: + 3.37
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand

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Gilead Sciences - GILD - close: 67.51 chg: -1.39 stop: 66.75

Biotech stocks were a sore spot for the market today. The BTK index lost 0.9% making it the second worst performing sector in Tuesday's session. Shares of GILD managed to under perform its peers with a 2% decline in spite of some positive analyst comments. We're still sitting on the sidelines waiting for a breakout over resistance at $70.00. Keep an eye on the 50-dma, which has been support in the past. GILD is nearing the 50-dma around $67 and might bounce. Our suggested trigger to buy calls is 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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KLA-Tencor - KLAC - close: 51.91 chg: -0.28 stop: 47.65

Semiconductor stocks ended up as the worst performing sector on Tuesday. The SOX lost 1.09%. Meanwhile shares of KLAC managed to tag a new relative high before giving into some profit taking. The trend in KLAC remains positive but momentum might be starting to wane. Readers may want to wait for a dip (and bounce) near $50 again, which should be support, before starting new positions. 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: + 1.10
Earnings Date 01/00/07 (unconfirmed)
Average Daily Volume = 3.9 million

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Sepracor - SEPR - close: 55.28 chg: +0.49 stop: 50.75

SEPR displayed relative strength today. Yesterday the stock look poised to move lower with the failed rally but the stock bounced this morning and crept higher through out the session. This show of strength was definitely positive given the weakness in biotech and drug stocks. 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: + 0.59
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million

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Thomas & Betts - TNB - close: 52.93 chg: -0.28 stop: 49.90

We told readers yesterday to look for a dip near the 10-dma and that's what TNB provided today. Thankfully traders bought the dip and shares were rebounding higher into the close. Readers may want to use this rebound from the 10-dma as a new bullish entry point. 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: + 1.57
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand
 

Put Updates

Cardinal Health - CAH - cls: 61.88 chg: -0.49 stop: 64.05

CAH continues to under perform and the close under $62.00 looks bearish but we hesitate to suggest new plays given the relative strength across the major market averages. Our target is the $58.00-57.50 range.

Picked on November 10 at $ 61.99
Change since picked: - 0.11
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: 62.19 chg: +1.28 stop: n/a

CAT produced a new four-week high with today's strong 2% gain. The rally was fueled by strong earnings news from rival Deere (DE). DE reported earnings that were better than expected and shares of DE rose more than 6.5%. We're not suggesting new strangle positions in CAT. 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: + 2.09
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

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Blue Nile - NILE - cls: 36.12 chg: -0.30 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: - 2.80
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

Goldman Sachs - GS - cls: 199.76 chg: +2.31 stop: 189.95

Target achieved. Shares of GS continue to lead the broker stocks higher. The stock gapped open higher today to open at $199 after GS got a price target upgrade to $250. The $200 level did hold as round-number resistance at least for today. The session's intraday high was $199.89. Our target was the $199-200 range.

Picked on November 14 at $190.36
Change since picked: + 9.40
Earnings Date 12/12/06 (unconfirmed)
Average Daily Volume = 4.8 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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