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Call Updates

B.P.Prudhoe Bay - BPT - close: 76.23 chg: +0.47 stop: 72.45

Oil stocks continued to rally thanks again to another rise in crude oil futures. Oil closed near $63 a barrel. Shares of BPT rose 0.6% and closed just under its simple 100-dma. We remain bullish given the stock's breakout over $75 on Tuesday. 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: + 0.98
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 219 thousand

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Enerplus - ERF - close: 46.13 change: +0.12 stop: 43.85

ERF inched higher on Thursday. The trend remains bullish although momentum seems to be stalling a bit. We'd keep an eye out for a dip back towards $45.00 as a potential entry point. Our target is the $50.00-51.00 range.

Picked on November 29 at $ 46.01
Change since picked: + 0.12
Earnings Date 11/10/06 (confirmed)
Average Daily Volume = 973 thousand

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Fomento Econo. - FMX - close: 105.25 chg: +0.80 stop: 99.49

FMX is still inching higher and shares posted another 0.7% gain. We're not suggesting new positions at this time. Our target is the $107-110 range.

Picked on November 08 at $102.09
Change since picked: + 3.16
Earnings Date 10/27/06 (confirmed)
Average Daily Volume = 314 thousand

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EOG Resources - EOG - close: 70.53 change: -1.53 stop: 67.99

We were a little surprised by EOG's relative weakness today. The oil stocks continued to gain ground following another rise in crude oil. Unfortunately, EOG lost 2% after an analyst firm downgraded the stock. More aggressive traders might want to consider today's intraday bounce from the $69.60 level as a new entry point. We would prefer to wait for a new move over $71.50 before opening new positions. Our target is the $78.00-80.00 range. The P&F chart has a very bullish pattern called a bullish triangle breakout that points to a $94 target.

Picked on November 29 at $ 72.06
Change since picked: - 1.53
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 3.6 million

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General Dynamics - GD - cls: 74.84 chg: -0.15 stop: 71.90

Neither GD nor the defense sector made any upward progress today. Both saw their rallies stall. The trend remains bullish but traders may want to watch for a dip in GD toward $73.00-73.50 as a potential entry point to buy calls. Our target is the $78.00-80.00 range.

Picked on November 29 at $ 74.35
Change since picked: + 0.49
Earnings Date 01/24/07 (unconfirmed)
Average Daily Volume = 1.4 million

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KLA-Tencor - KLAC - close: 51.67 chg: +0.62 stop: 49.49

KLAC produced a decent rebound (+1.2%) on above average volume, which is a bullish sign. Traders bought the dip this morning near $50.40. We remain cautiously optimistic here. 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: + 0.86
Earnings Date 01/00/07 (unconfirmed)
Average Daily Volume = 3.9 million

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Lockheed Martin - LMT - cls: 90.45 change: -0.17 stop: 87.65

The defense sector failed to make any headway on Thursday and shares of LMT followed suit. The stock produced a somewhat volatile session with a higher open, an intraday dip to $89.21 and a bounce back above $90.00. We would buy the bounce but more conservative traders may want to wait for a new show of strength (above $91.00) before considering new positions. Our short-term target is the $94.85-95.00 range. More aggressive traders may want to aim for the $99-100 region.

Picked on November 29 at $ 90.62
Change since picked: - 0.17
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.1 million

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Petroleo Brasileiro - PBR - cls: 94.15 chg: +0.21 stop: 87.99

PBR hit a new three-month high but closed off its best levels of the day. We wouldn't be surprised to see some profit taking so traders can watch for a dip toward $92 as a new entry point to buy calls. Our target is the $98.00-100.00 range.

Picked on November 29 at $ 91.51
Change since picked: + 2.64
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Research In Motion - RIMM - cls: 138.83 chg: +4.68 stop: 129.99

RIMM was marching higher to the beat of its own drummer on Thursday. Shares rose 3.4% before struggling to breakout past the $140 level. Market observers cited news that Cingular would soon offer RIMM's new Blackberry Pearl phone to consumer this holiday season. Plus, Goldman Sachs raised their price target on RIMM to $170. We remain bullish but we're not suggesting new positions at this time. Our target is $142.00.

Picked on November 28 at $134.29
Change since picked: + 4.54
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 7.2 million

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Sepracor - SEPR - close: 55.64 chg: -0.80 stop: 53.61 *new*

Warning - reversal alert! Shares of SEPR produced a bearish reversal with today's early morning spike to $57.50 and subsequent sell-off back under the $56 level. We could not find any specific news behind the day's volatility. More conservative traders may want to exit now to avoid any potential losses. We're raising our stop loss to $53.61, which is just under Monday's low. Our target is the $59.50-60.00 range. We're not suggesting new positions.

Picked on November 19 at $ 54.69
Change since picked: + 0.95
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million

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Thomas & Betts - TNB - close: 51.87 chg: -0.11 stop: 49.90

We remain very cautious here with TNB. The stock failed to breakout past its short-term (two-week) trendline of resistance. Technicals are mixed but right now bears seem to be in control. The stock is on the verge of breaking its intermediate trend of higher lows. We would only consider new positions on a move past $52.50. More conservative traders might want to tighten their stop loss toward $50.50.

Picked on November 12 at $ 51.36
Change since picked: + 0.51
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand
 

Put Updates

Essex Property Trust - ESS - cls: 132.04 chg: +1.87 stop: 130.01

ESS is still showing relative strength. We remain spectators waiting for a potential breakdown at the $125 level. If ESS doesn't show some weakness soon we'll drop it as a bearish candidate. A breakout past resistance at $134.00 would make ESS a potential bullish candidate for calls. Currently our suggested entry point is $124.90.

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.)

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Caterpillar - CAT - close: 62.03 chg: -0.03 stop: n/a

CAT continues to bounce around between $60 and its 50-dma. It's not looking good for our strangle play. More conservative traders should seriously consider trying to salvage some of their capital with an early exit. Yes, it's possible that CAT will move enough to make this play profitable but it's growing less and less likely. 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: + 1.93
Earnings Date 01/19/06 (unconfirmed)
Average Daily Volume = 7.7 million

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Blue Nile - NILE - cls: 33.49 chg: -0.49 stop: n/a

We don't see any changes from our previous updates. Retail stocks were weak as investors reacted to under performing same-store sales data for November. Shares of NILE lost 1.4% and are challenging technical support at its simple 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). FYI: The January $35 put is currently trading at $2.60bid/$2.95ask.

Picked on October 29 at $ 38.92
Change since picked: - 5.43
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

FedEx - FDX - close: 115.43 chg: -0.57 stop: 113.90

We have reconsidered our position on FDX. The transports continue to suffer as oil marches higher. FDX has bounced twice near $114.40 so aggressive traders may want to keep the play alive. We're going to cut our losses here and just keep an eye on it for another rally past the $117 level.

Picked on November 15 at $117.15
Change since picked: - 1.72
Earnings Date 12/21/06 (unconfirmed)
Average Daily Volume = 1.9 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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