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Call Updates

Baker Hughes - BHI - close: 76.80 change: +0.93 stop: 73.95

Oil stocks rebounded sharply on Tuesday following a bounce in crude oil. If you missed it Monday was a rough day for energy stocks after crude dropped almost 2%. Shares of BHI responded to today's bounce in oil with a 1.2% gain. Traders might want to consider buying the bounce today but we remain somewhat gun shy since Monday's session produced a large number of bearish reversals in the sector. Currently our target is the $83.75-85.00 range.

Picked on December 14 at $ 76.90
Change since picked: - 0.10
Earnings Date 02/09/07 (unconfirmed)
Average Daily Volume = 4.8 million

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Lockheed Martin - LMT - cls: 91.85 change: +1.67 stop: 88.99

The defense sector was a bright spot in the market today. The DFI index rose 1% and erased most of yesterday's losses. LMT helped lead the charge with a 1.85% gain and a breakout over its 10-dma and multi-day trend of lower highs. The rebound today looks like a new bullish entry point to buy calls. We have two targets. Our conservative target is the $94.85-95.00 range. Our more aggressive target is in the $99-100 range.

Picked on November 29 at $ 90.62
Change since picked: + 1.23
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.1 million

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NII Holdings - NIHD - close: 66.27 chg: -0.37 stop: 66.99

The profit taking in NIHD might be over. The stock briefly dipped under support near $65.00 and its 50-dma this morning before sharply bouncing back. Aggressive traders might want to consider buying today's rebound with a stop loss under today's low. We are still waiting for a breakout over $70.00 with a suggested entry point to buy calls at $70.25. If triggered our target is the $74.50-75.00 range. Aggressive traders may want to aim higher since the P&F chart points to a $110 target.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/22/07 (unconfirmed)
Average Daily Volume = 1.6 million

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Sepracor - SEPR - close: 57.46 chg: -0.01 stop: 55.99

SEPR failed to make any progress today. Shares bounced around their $56-58 trading range. More conservative traders might want to exit early now and try and lock in some time of gain. We're not suggesting new positions at this time. Our target for SEPR is the $59.50-60.00 range.

Picked on November 19 at $ 54.69
Change since picked: + 2.77
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million

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MEMC Electronic - WFR - close: 41.47 change: -0.81 stop: 39.95

Semiconductor stocks really under performed on Tuesday. The SOX index lost 1.4% making semis the worst performing sector. This impacted WFR and the stock lost 1.9%. The lack of upward momentum in WFR is turning the technical indicators bearish and the MACD is nearing a new sell signal. We would wait and watch for a bounce near $41.00 or $40.00 before considering new bullish positions. Our target is the $47.50-50.00 range. The P&F chart is bullish with a $48 target.

Picked on December 10 at $ 42.40
Change since picked: - 0.93
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 4.4 million
 

Put Updates

Expeditors Intl.- EXPD - close: 41.58 chg: -0.63 stop: 45.05

Transports are still falling. Shares of EXPD lost 1.49% and closed at a new three-month low. We don't see any changes from our previous updates. Our short-term target is the $40.15-40.00 range. More aggressive traders may want to aim for the August lows.

Picked on December 10 at $ 43.68
Change since picked: - 2.10
Earnings Date 02/06/07 (unconfirmed)
Average Daily Volume = 1.4 million

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Intuitive Surg. - ISRG - cls: 101.50 change: -0.55 stop: 107.51

ISRG continued to sink on Tuesday but shares managed a bounce from the $100 level. An oversold bounce from round-number support is not much of a surprise. Watch for a failed rally in the $103-104 region as a new entry point to buy puts. More conservative traders might want to consider a tighter stop loss. Our target is the $96.00-95.00 range. We do not want to hold over the early February earnings report.

Picked on December 18 at $102.05
Change since picked: - 0.55
Earnings Date 02/01/07 (unconfirmed)
Average Daily Volume = 938 thousand

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Mohawk Industries - MHK - cls: 74.70 chg: -1.34 stop: 79.01

As a major flooring and carpet producer MHK is influenced by the homebuilders. The homebuilding sector was the second worst performing industry group today. This helped fuel a 1.7% decline in MHK and on above average volume, which tends to be another bearish sign. The stock is testing support near $74 and its simple 200-dma. Don't be surprised by an oversold bounce from here but the $76 and $77 levels should act as overhead resistance. Our target is the $70.75-70.00 range.

Picked on December 17 at $ 76.02
Change since picked: - 1.32
Earnings Date 02/22/07 (unconfirmed)
Average Daily Volume = 600 thousand

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3M Co. - MMM - close: 78.11 change: -0.24 stop: 80.01

MMM is still trending lower. We remain bearish but want to remind readers that opening plays above $77.50 and its 200-dma would be consider an aggressive entry point. More conservative traders may want to wait for a drop under $77 first. The $75.00 level also offers a challenge for the bears since it to will probably be support. Our target is going to be the $72.50-70.00 range. The P&F chart is more bearish with a $47 target.

Picked on December 17 at $ 78.31
Change since picked: - 0.20
Earnings Date 01/19/07 (unconfirmed)
Average Daily Volume = 2.8 million

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NewMarket - NEU - close: 57.66 change: -0.31 stop: 62.01

NEU hit a new relative low this morning but bounced sharply to recoup most of its early losses. The trend remains bearish and we would still consider new put positions here. However, if you're patient, consider waiting for another failed rally near $60 as a new entry point. Our target is the $54.00-53.50 range. FYI: The P&F chart points to a $51 target. Plus, short-interest is about 7% of the 14.8 million-share float, which is probably enough to raise the risk of a short squeeze if NEU abruptly turns higher.

Picked on December 14 at $ 59.11
Change since picked: - 1.45
Earnings Date 01/29/07 (unconfirmed)
Average Daily Volume = 275 thousand

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Potash - POT - close: 136.04 change: +1.37 stop: 140.01

Lack of follow through lower after POT's failed rally on Monday is a yellow caution flag for traders. The stock produced a decent bounce from its lows today and the rebound may not be over yet. Considering today's action in POT we would hesitate to open new positions. Watch for a failed rally near $137.50 or in the $139.00-140.00 region as a potential entry point to buy puts. This remains an aggressive play given the stock's volatility. POT may have support near $130 and its 50-dma but we are targeting the $125.00-122.00 range. Currently the P&F chart points to a $122 target.

Picked on December 18 at $134.67
Change since picked: + 1.37
Earnings Date 01/24/07 (unconfirmed)
Average Daily Volume = 957 thousand

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Yahoo! Inc. - YHOO - close: 26.41 chg: +0.11 stop: 27.05

Traders bought the dip in YHOO this morning. Shares briefly traded under support near $26.00 and its 50-dma. The intraday low was $25.91, which is not enough to open put plays yet. Our suggested entry point to buy puts is at $25.85. If triggered our target is the $22.65 level near the October low. More aggressive traders may want to aim lower. FYI: It might be worth noting that short interest is about 6.9% of YHOO's 1.2 billion share float.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/16/07 (unconfirmed)
Average Daily Volume = 29.3 million

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YUM Brands - YUM - close: 58.95 change: +0.45 stop: 60.51

Shares of YUM have been trying to rebound for a week now. If you're the optimistic type then YUM may have produced a short-term double bottom. We remain cautiously bearish but would wait and watch for a failed rally under its 10-dma near $59.40 or the $60.00 level before considering new positions. More conservative traders may want to tighten their stops toward $60.00. Our target is the $55.75-55.00 range.

Picked on December 12 at $ 58.49
Change since picked: + 0.46
Earnings Date 02/07/07 (unconfirmed)
Average Daily Volume = 1.6 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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Blue Nile - NILE - cls: 35.41 chg: +0.83 stop: n/a

We didn't see any specific news to account for NILE's big bounce today. However, we suspect NILE was reacting to the TIF's 2.7% rally today. TIF was upgraded with a $45 price target this morning. We are not suggesting new strangle positions in NILE at this time. Keep in mind that we only have about five weeks before January options expire. More conservative traders may want to think about an early exit to salvage some capital if NILE doesn't begin to move soon. 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: - 3.51
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

Infosys - INFY - close: 53.50 change: -0.14 stop: 52.99

We have been stopped out of INFY at $52.99. Last night Oracle (ORCL) reported earnings that were not quite good enough for investors. The ORCL news sent the software stocks lower today. Shares of INFY reacted with a sharp drop at the open this morning and an intraday low of $52.30. Aggressive traders may want to keep an eye on the stock given INFY's sharp rebound from its lows. We'll watch for a breakout past $55.50.

Picked on December 14 at $ 55.20
Change since picked: - 1.70
Earnings Date 01/10/07 (unconfirmed)
Average Daily Volume = 1.4 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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