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Call Updates

Lockheed Martin - LMT - cls: 91.60 change: -0.25 stop: 88.99

Defense stocks continued to inch higher on Wednesday but the market weakness appeared to put a lid on LMT's advance. The lackluster session for LMT is a bit of a surprise after the company announced another $57 million in military deals today. We remain bullish with the stock above $90.00 but more conservative traders may want to tighten their stops. 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: + 0.98
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.1 million

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Sepracor - SEPR - close: 57.37 chg: -0.09 stop: 55.99

We still don't see any changes from our previous updates. SEPR continues to bounce around the $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: + 2.68
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 2.3 million

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MEMC Electronic - WFR - close: 41.78 change: +0.31 stop: 39.95

The situation with WFR is not looking very healthy. Shares tried to bounce this morning but failed multiple times near $42.75. The result was a failed-rally session. WFR appears headed for the $40.00 level and the technical picture is turning bearish. More conservative traders may just want to bail out now since the NASDAQ and technology stocks seems to be the investor target for profit taking right now. We're not suggesting new positions at this time.

Picked on December 10 at $ 42.40
Change since picked: - 0.62
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 4.4 million
 

Put Updates

Intuitive Surg. - ISRG - cls: 100.44 change: -1.06 stop: 107.51

ISRG slipped just over 1% to close near round-number support at the $100 level. The technicals continue to deteriorate and the MACD on the daily chart produced a new sell signal yesterday. 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: - 1.61
Earnings Date 02/01/07 (unconfirmed)
Average Daily Volume = 938 thousand

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Mohawk Industries - MHK - cls: 74.94 chg: +0.24 stop: 79.01

MHK is trying to bounce from technical support near its 200-dma. If you are looking for a new entry point consider a new relative low under $74.00 or a failed rally near $76.00 or $77.00. Our target is the $70.75-70.00 range.

Picked on December 17 at $ 76.02
Change since picked: - 1.08
Earnings Date 02/22/07 (unconfirmed)
Average Daily Volume = 600 thousand

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3M Co. - MMM - close: 78.83 change: +0.72 stop: 80.01

MMM managed a minor oversold bounce today but the rebound ran out of gas near its 50-dma. Shares remain under their three-week trendline of lower highs. Traders can choose to open positions now or look for another drop below $78.00 as a new entry point. More conservative traders may wan to wait for a decline under $77.00 since MMM still has potential support near its 200-dma and entries above the 200-dma should be considered more aggressive. 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: + 0.52
Earnings Date 01/19/07 (unconfirmed)
Average Daily Volume = 2.8 million

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NewMarket - NEU - close: 57.19 change: -0.47 stop: 62.01

NEU continues to sink under a steady trend of lower highs. The stock might have technical support at its rising 200-dma. Therefore we are adjusting our target from $54.00-53.00 to $55.00-54.00. 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: - 1.92
Earnings Date 01/29/07 (unconfirmed)
Average Daily Volume = 275 thousand

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Yahoo! Inc. - YHOO - close: 25.59 chg: +0.82 stop: 27.05

Our put play in YHOO is now open. The stock has finally produced a convincing breakdown under support near $26.00 and its 50-dma. Our suggested entry point to buy puts was at $25.85. Now that the play is open 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 20 at $ 25.85
Change since picked: - 0.26
Earnings Date 01/16/07 (unconfirmed)
Average Daily Volume = 29.3 million

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YUM Brands - YUM - close: 59.05 change: +0.10 stop: 60.51

There is little change in YUM or our outlook on the stock. The oversold bounce looks like it's trying to reach the $60.00 level, which should be overhead resistance supported by its 50-dma. We would wait and watch for a failed rally under $60 before considering new put 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: + 0.56
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: 35.61 chg: +0.20 stop: n/a

NILE continues to follow in the shadow of TIF, which is still in rebound mode. Shares of NILE are nearing short-term overhead resistance $35.60-36.00 and its 50-dma. 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: - 3.31
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

Baker Hughes - BHI - close: 75.90 change: -0.90 stop: 73.95

We are suggesting an early exit in BHI. The stock lost 1.1% and produced a failed rally while slipping closer toward support near $75.00 and its 200-dma near $74.00. There is a chance that BHI will bounce from $74 or $75 but we don't want to risk it. The oversold bounce in the OIX oil index and OSX oil services index on Tuesday failed to see any follow through today thanks to a 4% decline in natural gas. It appears that the energy sector is poised for more profit taking.

Picked on December 14 at $ 76.90
Change since picked: - 1.00
Earnings Date 02/09/07 (unconfirmed)
Average Daily Volume = 4.8 million

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NII Holdings - NIHD - close: 65.11 chg: -1.16 stop: 66.99

NIHD failed to see any bounce on Wednesday and the stock is poised to breakdown under support near $65.00 and its 50-dma. So far we've been waiting for a breakout over resistance at $70.00 but it doesn't look like it is going to happen any time soon. Nimble traders may want to consider puts on any further decline and target potential support near $60.

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
 

Dropped Puts

Expeditors Intl.- EXPD - close: 40.94 chg: -0.64 stop: 45.05

Target achieved. Federal Express (FDX) issued a profit warning today and the news sent the Dow Jones Transportation index below technical support at its 200-dma. Shares of EXPD reacted with an intraday dip to $40.14. Our target was 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: - 2.74
Earnings Date 02/06/07 (unconfirmed)
Average Daily Volume = 1.4 million

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Potash - POT - close: 140.70 change: +4.66 stop: 140.01

We have been stopped out of POT at $140.01. Our aggressive put play in the volatile shares of POT did not pan out for us. The decline last week and failed rally under $140 now looks like a bear trap. We could not find any specific news to account for POT's 3.4% gain today, which was powered by above average volume.

Picked on December 18 at $134.67
Change since picked: + 6.03
Earnings Date 01/24/07 (unconfirmed)
Average Daily Volume = 957 thousand
 

Dropped Strangles

None
 

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