Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Call Updates

B.P.Prudhoe Bay - BPT - close: 75.76 chg: 1.10 stop: 72.45

Breakout alert! Another rise in crude oil futures, following a surprise decline in the weekly inventory numbers, helped fuel another rally in oil stocks. BPT broke out over significant resistance at the $75.00 level and hit our trigger to buy calls at $75.25 opening the play. 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 29 at $ 75.25
Change since picked: 0.51
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 219 thousand


Enerplus - ERF - close: 46.01 change: 0.60 stop: 43.85

The rally in oil stocks also lifted shares of ERF but the stock's 1.3% gain seemed a bit anemic versus the OIX's 2.5% rise and the OSX's 3.9% surge. We were suggesting a trigger to buy calls in ERF at $46.01, which was hit today so the play is now open. Our target is the $50.00-51.00 range.

Picked on November 29 at $ 46.01
Change since picked: 0.00
Earnings Date 11/10/06 (confirmed)
Average Daily Volume = 973 thousand


FedEx - FDX - close: 116.00 chg: 0.10 stop: 113.90

Rising crude oil prices is putting the squeeze on the transport stocks and shares of FDX struggled to make headway today. We remain cautiously optimistic but more conservative traders may want to tighten their stops or just exit early since we expect oil to remain relatively strong. 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: - 1.15
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 1.9 million


Fomento Econo. - FMX - close: 104.45 chg: 2.59 stop: 99.49

Shares of FMX produced a strong session. The stock gapped open higher and rose back above its simple 10-dma and the $104 level, which could have been short-term resistance. Our target is the $107-110 range.

Picked on November 08 at $102.09
Change since picked: 2.36
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand


General Dynamics - GD - cls: 74.99 chg: 1.45 stop: 71.90

Our new play in GD is now open. The market's rebound today helped fuel a bull flag breakout (buy signal) in GD. We were suggesting a trigger to buy calls at $74.35. Our target is the $78.00-80.00 range.

Picked on November 29 at $ 74.35
Change since picked: 0.64
Earnings Date 01/24/07 (unconfirmed)
Average Daily Volume = 1.4 million


KLA-Tencor - KLAC - close: 51.05 chg: -0.05 stop: 49.49

Hmm... the chip stocks were oddly down today while the rest of the tech sector posted gains (the networking sector just barely in the green). The relative weakness was somewhat surprising since the group got some positive analyst comments on TXN and INTC. Shares of KLAC still look bullish with a trend of higher lows. 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


Petroleo Brasileiro - PBR - cls: 93.94 chg: 3.33 stop: 87.99

The rally in oil helped fuel a big move in Brazilian oil company PBR. The stock gapped open ($91.30) and rallied to a 3.6% gain. We were suggesting a trigger to buy calls at $91.51 so the play is now open. The strong volume behind today's move is a bullish sign. Our target is the $98.00-100.00 range.

Picked on November 29 at $ 91.51
Change since picked: 2.43
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 2.6 million


Research In Motion - RIMM - cls: 134.15 chg: -0.14 stop: 129.99

Wednesday proved to be an interesting and somewhat volatile session for RIMM. The stock gapped open higher at $135.37, rallied to $137.16, only to fall all the way back to $130.61 before traders stepped in and bought the dip (again). The lack of a real bounce is bearish but seeing traders defend RIMM at $130 again is bullish. We labeled this as aggressive high-risk play for a reason so keep that in mind. Today's afternoon bounce can be used as another entry point to buy calls. Our target is $142.00.

Picked on November 28 at $134.29
Change since picked: - 0.14
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 7.2 million


Sepracor - SEPR - close: 56.44 chg: 1.51 stop: 52.35

Bullish breakout alert! SEPR managed to push through resistance in the $55.50-56.00 region today with a 2.7% gain. This looks like the beginning of its next leg higher. 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: 1.75
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million


Thomas & Betts - TNB - close: 51.98 chg: 0.44 stop: 49.90

TNB is trying to bounce. The stock added 0.8% and its short-term technicals are improving. Yet it's going to take a move past the $52.50 region to show that TNB has broken its short-term trendline of lower highs. We'd be cautious about considering new bullish 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: 0.62
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand

Put Updates

Essex Property Trust - ESS - cls: 130.17 chg: 2.67 stop: 130.01

It does not look like ESS is going to cooperate. The REITs were strong again on Wednesday and ESS powered ahead to a 2% gain. It was our plan to buy puts on a breakdown under $125 so we're safe and sitting on the sidelines for now. Our suggested trigger to buy puts is at $124.90. If triggered we will have two targets. Our first target is the $120.50-120.00 range. Our second, more aggressive target will be the $116.50-115.00 range. FYI: The P&F chart remains bullish (for now).

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 147 thousand

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.)


Caterpillar - CAT - close: 62.06 chg: 0.46 stop: n/a

CAT managed to add about 0.7% but we need to see a breakout above its simple 50-dma before we start to get hopeful. 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: 1.96
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million


Blue Nile - NILE - cls: 33.95 chg: -0.13 stop: n/a

A stronger than expected earnings report for Tiffany (TIF) failed to have any affect on NILE. Shares of NILE displayed relative weakness with another loss today. 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: - 4.97
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand

Dropped Calls

CNOOC - CEO - close: 89.50 change: 2.26 stop: 84.45

Target achieved. The rally in oil stocks helped lift CEO to a 2.59% gain on above average volume. Our target was the $89.50-90.00 range so the play is closed. More aggressive traders may want to aim higher given the relative strength in the sector and the commodity.

Picked on November 21 at $ 85.94
Change since picked: 3.56
Earnings Date 03/23/07 (unconfirmed)
Average Daily Volume = 261 thousand

Dropped Puts


Dropped Strangles


Play Update Archives