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Call Updates

B.P.Prudhoe Bay - BPT - close: 74.66 chg: +1.14 stop: 72.45

Oil stocks were the hot spot on Tuesday thanks to further gains in crude oil futures, which are nearing $61 a barrel. The OIX rose 1.3% and the OSX oil services index rose 1.7%. Shares of BPT managed a 1.5% rebound and came close to breaking out over resistance at the $75.00 level (again). Currently we're waiting for just such a breakout with a trigger to buy calls at $75.25. If triggered our target is the $79.75-80.00 range. Keep an eye on the 100-dma near $77, which might offer some resistance. The P&F chart is bullish with an $85 target.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 219 thousand

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CNOOC - CEO - close: 87.24 change: +0.22 stop: 84.45

CEO is another oil stocks that got a lift from rising crude oil prices. Traders bought the dip in CEO near $86.20 this morning. The trend remains positive and today's rebound takes the bite out of yesterday's short-term bearish reversal. Our target is the $89.50-90.00 range.

Picked on November 21 at $ 85.94
Change since picked: + 1.30
Earnings Date 03/23/07 (unconfirmed)
Average Daily Volume = 261 thousand

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FedEx - FDX - close: 115.90 chg: -0.20 stop: 113.90

Transportation-related stocks continued to sell-off as investors reacted to another rise in crude oil futures. However, today's session for the transportation index and shares of FDX produced a decent bounce from its lows. We do note that the MACD for both FDX and the transports has turned negative so more conservative traders should remain defensive. Yet today's bounce from the lows might be the beginning of the end of this consolidation. Aggressive traders might want to consider new positions with a stop under today's low ($114.42). For the rest of us we'd wait for another rise past $117 before considering new positions. We do expect some resistance at the $120 level but our target is the $124-125 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: - 1.25
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Fomento Econo. - FMX - close: 101.86 chg: -0.35 stop: 99.49

FMX dipped to $100.85 before traders decided to step in and make it a buying opportunity. We remain optimistic here and would consider new positions now but more conservative traders may want to wait for another rise past the $102 level before initiating new positions. Our target is the $107-110 range.

Picked on November 08 at $102.09
Change since picked: - 0.23
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand

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KLA-Tencor - KLAC - close: 51.10 chg: +0.94 stop: 49.49

Shares of KLAC out performed its peers in the semiconductor sector and the NASDAQ on Tuesday. Traders bought the dip near $50 and the stock closed with a 1.8% gain on almost average volume. This looks like a new entry point for bullish positions. More conservative traders may want to think about tightening their stop loss. 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: + 0.29
Earnings Date 01/00/07 (unconfirmed)
Average Daily Volume = 3.9 million

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Sepracor - SEPR - close: 54.93 chg: +0.88 stop: 52.35

SEPR bounced from its rising 10-dma this morning. Unfortunately, the rally was beginning to falter this afternoon. The stock has struggled with the $55.50-56.00 region for the last several days and it remains a lid on the stock. If the last hour is any indication then we'd look for SEPR to trade lower tomorrow, probably towards the $54 level again. We're aiming for the $59.50-60.00 range because the daily/weekly charts have resistance near $60.00.

Picked on November 19 at $ 54.69
Change since picked: + 0.24
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million

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Thomas & Betts - TNB - close: 51.54 chg: +0.40 stop: 49.90

TNB managed a bounce from technical support at its simple 200-dma this morning. The rebound could be used as a new bullish entry point to buy calls. However, we remain cautious given the stock's bearish MACD indicator. More conservative traders may want to exit early anyway to limit losses. 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: + 0.62
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand
 

Put Updates

None
 

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: 61.60 chg: -0.37 stop: n/a

Our strangle in CAT is in trouble. The bounce from $60 stalled this week and we're running out of time. We have less than three weeks before December options expire. More conservative traders may want to try and salvage some of their trading capital with an early exit. For this play to have any hope of being successful we need to see CAT trade above $66 or under $54 before expiration. 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: + 1.50
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

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Blue Nile - NILE - cls: 34.08 chg: -0.78 stop: n/a

More concerns over retail and this holiday season sent shares of NILE to a 2.2% loss. More importantly for us the stock broke down under technical support at its 100-dma and exponential 200-dma. 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: - 4.84
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

Cummins Inc. - CMI - close: 118.23 chg: -2.62 stop: 119.90

Shares of CMI failed to find any support at the $120 level near its 100-dma. The stock's failed rally from Monday turned into a larger retreat with today's 2% decline and breakdown. It's possible that CMI might find support near $118, which is where the stock bounced back in early November but we're not waiting to find out. It was our plan to buy calls on a breakout over $125, which looks like it might be a while before that occurs. We're dropping CMI as a potential play.

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/30/07 (unconfirmed)
Average Daily Volume = 1.1 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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