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Call Updates

Lockheed Martin - LMT - cls: 94.58 change: +0.98 stop: 89.75

Target achieved. Shares of LMT continue to show relative strength. The stock added another 1% and LMT hit our conservative target at $94.85. We are not suggesting new plays at this time. 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: + 3.96
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.1 million

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Altria Group - MO - close: 89.19 change: +1.07 stop: 84.75

MO continues to set new all-time highs. The stock rose 1.2% on above average volume, which tends to be a bullish sign. Word on the street was more positive comments about the company's potential spin-off of its Kraft unit is fueling the run in MO. We suggest that readers be prepared for potential resistance at the $90 level and odds are good for some profit taking. We are targeting a rally into the $92.50-95.00 range. The P&F chart currently points to a $114 target. We do not want to hold over the late January earnings report.

Picked on January 04 at $ 87.65
Change since picked: + 1.54
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume = 8.8 million

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Reynolds American - RAI - cls: 64.55 chg: +0.48 stop: 64.90

There is no change from our previous updates on RAI. The stock is under performing and if it doesn't rally past $65 soon we'll drop it as a bullish candidate. It's our plan to buy calls on a breakout over resistance in the $66.00-66.50 range. Our suggested trigger to open call plays is at $66.55. If triggered our target is the $69.90-70.00 range. More aggressive traders may want to aim higher.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/07/07 (unconfirmed)
Average Daily Volume = 1.2 million

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Sepracor - SEPR - close: 62.03 change: +0.16 stop: 59.65

Unfortunately, there is little change in shares of SEPR. The stock is still hovering around the $62 level. The lack of upward momentum makes us cautious and more conservative traders may want to turn defensive or just exit early. If you're looking for a new entry point consider waiting for a rally past $62.50 or $63.00 before initiating positions. We are going to target the January 2005 highs with an exit target of $66.45. More aggressive traders may want to aim higher since the P&F chart points to a $68 target.

Picked on January 07 at $ 61.89
Change since picked: + 0.14
Earnings Date 01/27/07 (unconfirmed)
Average Daily Volume = 2.2 million
 

Put Updates

Cummins Inc. - CMI - close: 114.30 change: -2.96 stop: 118.15

Our put play on CMI is now open. The stock spiked lower this morning on news that it would be getting new competition from PCAR. Last night PCAR announced plans to build a $400 million engine manufacturing plant in the Southeast U.S. Shares of CMI reacted with a spike under support near its 200-dma and its two-year trendline of support. Our suggested entry point to buy puts was at $114.50. Now that the play is open we have two targets. Our conservative target is $110.50 and our aggressive target is the $106.00 level. Currently the Point & Figure chart has a triple-bottom breakdown sell signal with a $96 target but is also testing support in the $114-115 region. We do not want to hold over the late January or early February earnings report.

Picked on January 10 at $114.50
Change since picked: - 0.20
Earnings Date 01/29/07 (unconfirmed)
Average Daily Volume = 1.0 million

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eBay Inc. - EBAY - close: 29.30 change: -0.45 stop: 32.01

EBAY under performed the markets on Wednesday with a 1.5% decline on strong volume. The rumor all day was that EBAY was in talks to buy StubHub, an online sports ticket marketplace, for close to $300 million. CNBC mentioned that EBAY had a chance to buy Stubhub years ago for about $20-30 million. After the closing bell EBAY did confirm that it had signed a deal to buy Stubhub for $310 million. We remain bearish on EBAY but it's worth noting that shares were trading slightly higher in after hours around $29.40. Our target is the $26.00 level. We would aim lower but the company has earnings coming up in about two and a half weeks and we do not want to hold over the report.

Picked on January 08 at $ 29.70
Change since picked: - 0.40
Earnings Date 01/24/07 (confirmed)
Average Daily Volume = 14.5 million

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3M Co. - MMM - close: 77.85 change: +0.17 stop: 79.05 *new*

There is still no change in MMM. The stock continues to oscillate sideways with support near $77.00. We are not suggesting new plays at this time. More conservative traders may just want to exit early now. We're going to inch our stop loss down to $79.05. 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: - 0.63
Earnings Date 01/30/07 (confirmed)
Average Daily Volume = 2.8 million

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Vornado Realty Trust - VNO - cls: 121.55 chg: +1.65 stop: 122.65

Warning! It may be time to exit any put positions on VNO. The stock has continued to rebound and shares rallied right past potential resistance at $120.00 and its simple 50-dma and 10-dma. Volume was above average on the move, which tends to be a bullish sign. The sharp bounce is making the recent breakdown look like a bear trap. More conservative traders may want to exit immediately or consider tightening your stop loss to $121.85 or $122.01. We are not suggesting new positions and suspect that we will be stopped out tomorrow.

Picked on January 07 at $119.55
Change since picked: + 2.00
Earnings Date 02/27/07 (unconfirmed)
Average Daily Volume = 945 thousand

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YUM Brands - YUM - close: 58.82 change: +0.55 stop: 60.05 *new*

It might also be a good time to exit early in YUM. The stock has bounced back into its previous trading range and closed near its highs for the session on Wednesday. Furthermore YUM has broken out above its 10-dma and many of the short-term technical oscillators are starting to look bullish. YUM should still have resistance in the $59-60 region but again more conservative traders may want to exit early now. We're adjusting our stop loss to $60.05.

Picked on December 12 at $ 58.49
Change since picked: + 0.33
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: 38.49 chg: +0.51 stop: n/a

NILE produced a nice bounce from its rising 10-dma today. The stock might have gotten a boost from rival Tiffany (TIF) who reported same-store sales were up 7% for the previous month. We do not see any changes from our previous updates on NILE. We're not suggesting new positions. We are adjusting our target to breakeven at $2.40. 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: - 0.43
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand
 

Dropped Calls

None
 

Dropped Puts

Sears Holding - SHLD - cls: 172.09 chg: +5.86 stop: 171.55

We have been stopped out of SHLD at $171.55. Sears neglected to inform us beforehand that they would be raising their earnings guidance. The company reported the news this morning and said that fourth-quarter earnings would be in the $4.87-5.39 range versus analysts estimates near $4.86. The company also announced same-store sales for December fell 1.2% for Kmart and dropped 5.6% for Sears. There seems to be a disconnect somewhere between SHLD's falling same-store sales and rising earnings but no one said the market was logical.

Picked on December 22 at $167.90
Change since picked: + 4.19
Earnings Date 02/15/07 (unconfirmed)
Average Daily Volume = 1.9 million
 

Dropped Strangles

None
 

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