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Call Updates

Chaparral Steel - CHAP - cls: 44.93 chg: +0.46 stop: 41.99

CHAP out performed the markets on Wednesday with a continuation of the late Tuesday afternoon bounce from short-term support near $44.00. Today's gain (+1%) helped the daily chart's MACD produce a new buy signal. However, we are somewhat concerned that the major market indices might be forecasting a dip so readers should prepare for another pull back toward $44 in CHAP. A bounce near $44 can be used as a new entry point. Our target is the $49.00-50.00 range.

Picked on January 14 at $ 45.16
Change since picked: - 0.23
Earnings Date 03/20/07 (unconfirmed)
Average Daily Volume = 635 thousand


iShares China Index - FXI - close: 106.25 chg: -1.14 stop: 99.49

It seems that we were not the only ones looking for a dip near $105 as a new entry point. FXI dipped to $105.10 this morning but quickly bounce. Readers can choose to go ahead and buy the bounce or wait for more confirmation with a breakout over its simple 10-dma near $107.25. We do have a wide stop loss. More conservative traders may want to use a tighter stop. Our target is the $115.00-117.00 range.

Picked on January 14 at $105.40
Change since picked: + 0.85
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 1.3 million


Lehman Brothers - LEH - cls: 83.32 change: +0.79 stop: 77.99

We were expecting a pull back in the broker-dealer sector today after Tuesday's failed rally. The XBD index did lose 0.5% but it bounced from the 255 level. Shares of LEH out performed its peers and the market with a 0.9% gain as traders bought the dip near $82. If you are looking for a new entry point we'd still considering waiting for another pull back into the $80-82 region since the major averages look a little vulnerable. We have two targets. Our conservative target is the $84.85-85.00 range. Our aggressive target is the $89.00-90.00 range. LEH's Point & Figure chart shows a very bullish pattern called a bullish triangle breakout that points to a $111 target.

Picked on January 11 at $ 80.25
Change since picked: + 3.07
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 3.4 million


China Life Ins. - LFC - close: 48.62 change: -0.31 stop: 43.95

LFC didn't move much on Wednesday. The stock posted a second day of trading sideways. Shares mirrored the general direction in Chinese markets. We remain bullish that LFC will bounce but readers have a choice. You can look for a dip into the $46.00-47.00 region or wait for a breakout over its 10-dma (near 49.50) or even wait for a breakout over $50.00. Just remember that our target is the $52.50-55.00 range. LFC is a more aggressive, higher-risk play and will tend to gap open every day.

Picked on January 14 at $ 46.86
Change since picked: + 1.76
Earnings Date 04/18/07 (unconfirmed)
Average Daily Volume = 1.7 million


Lockheed Martin - LMT - cls: 96.50 change: -0.50 stop: 90.95

We do not see any changes from our previous updates on LMT. The stock is still looks bullish but shares hit some profit taking today. More conservative traders may want to take profits now if you have not already. We're not suggesting new positions as we aim for our more aggressive target in the $99-100 range. The stock has already hit our conservative target in the $94.85-95.00 range last week.

Picked on November 29 at $ 90.62
Change since picked: + 5.88
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 2.1 million


Altria Group - MO - close: 88.57 change: -0.72 stop: 84.75

MO is struggling to maintain its bullish, upward momentum. The stock lost 0.8% and dipped back toward short-term support at its rising 10-dma. News that tobacco stock UST was downgraded today may have influenced trading in MO. The pattern remains bullish but we hesitate to suggest new call positions here. More conservative traders might want to consider a tighter stop loss near $86. 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: + 0.92
Earnings Date 01/31/07 (unconfirmed)
Average Daily Volume = 8.8 million


Teleflex - TFX - close: 67.25 chg: +0.10 stop: 64.75

Traders bought the dip in TFX near $66.70 this morning. We don't see any significant changes from our previous comments. We would still consider new call positions here but it might pay to wait and look for a dip back toward the $66.00 region. More aggressive traders may want to put their stop under the 50-dma. Normally we would expect the $70.00 level to act as resistance but looking at TFX's history the stock seems to encounter resistance in the $72.00 region. Our target will be the $71.00-72.00 range.

Picked on January 14 at $ 67.11
Change since picked: + 0.14
Earnings Date 02/14/07 (unconfirmed)
Average Daily Volume = 202 thousand

Put Updates

eBay Inc. - EBAY - close: 29.95 change: -0.09 stop: 31.26

This is the fourth day in a row that shares of EBAY have struggled with overhead resistance near its simple 200-dma in the $30.50 region. The trend for the stock remains down but lack of momentum is beginning to worry us. Even with EBAY's relative weakness we hesitate to suggest new put positions given our time frame. The company is due to report earnings on January 24th and we do not want to hold over the announcement. Please note that we're adjusting our stop loss to $31.26. Our target is the $26.00 level.

Picked on January 08 at $ 29.70
Change since picked: + 0.25
Earnings Date 01/24/07 (confirmed)
Average Daily Volume = 14.5 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: 38.30 chg: -0.35 stop: n/a

We do not see any changes from our weekend update on NILE. Time is quickly running out. We're not suggesting new positions. We have adjusted our target to $1.20, which is half of our estimated cost. 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: - 0.62
Earnings Date 10/30/06 (confirmed)
Average Daily Volume = 226 thousand

Dropped Calls

Merrill Lynch - MER - close: 96.81 change: -0.05 stop: 93.99

Our time has run out on MER. The company is due to report earnings tomorrow so it was our plan to exit today at the closing bell. Unfortunately for us the rally stalled out on Tuesday. We do not want to hold over the report because typically the broker-dealers run up ahead of their earnings announcement, blow away the estimates, and then sell-off. MER reports tomorrow morning and Wall Street is looking for $1.92 a share.

Picked on January 10 at $ 94.44
Change since picked: + 2.37
Earnings Date 01/18/07 (confirmed)
Average Daily Volume = 4.6 million

Dropped Puts


Dropped Strangles


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