Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Call Updates

Lockheed Martin - LMT - cls: 91.69 change: -0.24 stop: 89.75*new*

We continue to grow more concerned with the lack of strength in LMT. Shares bounced from their lows near $91 this morning but were unable to build on the early morning rebound. As we mentioned earlier the technical picture is growing more bearish. There is still a chance that LMT will bounce from support near $90 or its 50-dma. However, we're not suggesting new positions at this time and more conservative traders may want to exit early. We're raising the stop loss to $89.75. Currently we have two targets. Our conservative target is the $94.85-95.00 range. Our aggressive target is the $99.00-100.00 range.

Picked on November 29 at $ 90.62
Change since picked: + 1.07
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.1 million

Put Updates

3M Co. - MMM - close: 77.95 change: -0.31 stop: 80.01

MMM turned lower today but remains in its current trading range. We don't see any changes from our previous updates. Traders may want to wait for a decline under $76.40 before initiating new positions. Our target is the $72.50-70.00 range. The P&F chart points to a $47 target.

Picked on December 17 at $ 78.31
Change since picked: - 0.36
Earnings Date 01/19/07 (unconfirmed)
Average Daily Volume = 2.8 million


NewMarket - NEU - close: 57.63 change: +0.28 stop: 62.01

NEU produced a small oversold bounce today. Overall the trend remains bearish but we're keeping a sharp eye on potential support near $56 and its simple 200-dma near $54.85. More conservative traders might want to consider a tighter stop loss near $61.00 or $60.50. We hesitate to suggest new positions here. Due to the rising 200-dma we're adjusting our target to $55.00-54.75.

Picked on December 14 at $ 59.11
Change since picked: - 1.48
Earnings Date 01/29/07 (unconfirmed)
Average Daily Volume = 275 thousand


Sears Holding - SHLD - cls: 167.00 chg: -0.28 stop: 173.05

It was a mixed bag for the retailers today. Wal-Mart (WMT) posted better than expected same-store sales figures while rival Target (TGT) missed its numbers. The overall tone for the retailers was caution and disappointment. Shares of SHLD turned in a minor bounce from the $165 level and closed near unchanged. We remain bearish but more conservative traders may want to tighten their stops toward $172 or $171. We hesitate to open new put positions now with potential support at SHLD's rising 100-dma. Currently our target is the $162.00-160.00 range.

Picked on December 22 at $167.90
Change since picked: - 0.90
Earnings Date 02/15/07 (unconfirmed)
Average Daily Volume = 1.9 million


YUM Brands - YUM - close: 58.70 change: -0.16 stop: 60.26

YUM is still in its trading range but it's flirting with a breakdown under support near $58.00. We don't see any significant changes from our weekend update. Readers can watch for a drop under $57.80 as a new entry point but bear in mind that our target is the $55.75-55.00 range.

Picked on December 12 at $ 58.49
Change since picked: + 0.21
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.)


Blue Nile - NILE - cls: 38.01 chg: +0.72 stop: n/a

NILE continues to climb and posted a 1.9% gain on Thursday. We don't see any changes from our previous updates. We have less than three weeks left before January options expire and we're not suggesting new positions. Our estimated cost was $2.40 and we're planning to sell if either side of our strangle rises to $3.90. Given our time frame readers may want to adjust their target to breakeven. 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: - 0.91
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand

Dropped Calls


Dropped Puts

Mohawk Industries - MHK - cls: 77.14 chg: +1.04 stop: 79.01

We still cannot find any reason why MHK is bouncing. Investors are still concerned about the housing market and the recent sell-off in oil and copper prices has some market pundits predicting an economic slow down, which should be bad news for MHK who produces flooring materials. There is a good chance that MHK will struggle and potentially roll over under resistance at the $79.00 level. However, we'd rather not wait and be wrong with the technical indicators turning more positive. Therefore we're suggesting an early exit in MHK to limit our losses.

Picked on December 17 at $ 76.02
Change since picked: + 1.12
Earnings Date 02/22/07 (unconfirmed)
Average Daily Volume = 600 thousand


Yahoo! Inc. - YHOO - close: 26.85 chg: +1.24 stop: 27.05

Shares of YHOO remained under $26.00 until the NASDAQ got its second wind in the last two hours of trading. When the NASDAQ Composite surged higher again it looks like bulls finally rushed into YHOO or maybe it was bears rushing to cover their shorts. Shares of YHOO soared in the last couple of hours on rising volume. The afternoon rally in YHOO pushed the stock above technical resistance at its 50-dma and its 100-dma. We are suggesting an early exit right here to limit any losses before YHOO tries to rebound toward $28 and its 200-dma.

Picked on December 20 at $ 25.85
Change since picked: + 1.00
Earnings Date 01/16/07 (unconfirmed)
Average Daily Volume = 29.3 million

Dropped Strangles


Play Update Archives