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Call Updates

Chaparral Steel - CHAP - cls: 44.70 chg: -0.46 stop: 41.99

Market weakness weighed on shares of CHAP and the stock failed to see any follow through on Friday's rebound. We would be extra cautious with the major indices looking poised for more profit taking. We would expect shares of CHAP to dip toward the $44 region. More conservative traders may want to tighten their stops. Traders may want to wait for a rise past $45.75, which would be a new three-week high, before opening new call plays. Our target is the $49.00-50.00 range. The P&F chart points to a $64 target.

Picked on January 14 at $ 45.16
Change since picked: - 0.46
Earnings Date 03/20/07 (unconfirmed)
Average Daily Volume = 635 thousand

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iShares China Index - FXI - close: 107.00 chg: +0.65 stop: 99.49

The Chinese markets turned in a strong session on Monday and closed near their highs for the day. This strength was reflected in the FXI gapping open at $108. Unfortunately, the U.S. markets were weak and the FXI ETF did not see any follow through here in the states. We remain bullish on the FXI but readers may want to tighten their stops. A dip or bounce near $105 could be used as a new entry point. The FXI can be volatile so we have a wide stop, making this a more aggressive play. Our target is the $115.00-117.00 range. Remember, this is a Chinese ETF and it tends to gap open every day as it adjusts to how the Chinese markets traded the night before.

Picked on January 14 at $105.40
Change since picked: + 1.60
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 1.3 million

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KB Home - KBH - close: 51.47 change: -0.27 stop: 48.99

Friday's bullish breakout in housing stocks failed to see any follow through. U.S. markets were weak and buyers chose to sit on the sidelines. Fortunately, the profit taking in shares of KBH was pretty mild. Traders bought the initial dip to $51.00. We would still consider new positions now but with the major averages looking like they want to move lower it might pay off to wait and watch for KBH to dip towards the $50.50-50.00 region before considering a new entry. Our target is the $54.90-55.00 level. More aggressive traders may want to aim higher. Traders should be aware that rival homebuilder DHI is due to report earnings on January 23rd and their results and guidance could have a big impact on the sector's direction.

Picked on January 21 at $ 51.74
Change since picked: - 0.27
Earnings Date 03/19/07 (unconfirmed)
Average Daily Volume = 2.2 million

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Lehman Brothers - LEH - cls: 82.12 change: -1.03 stop: 78.95

Reversal alert - again! Shares of LEH produced another bearish reversal with today's bearish engulfing candlestick pattern. This is the second one in three trading days. More conservative traders may want to exit early or tighten their stops even further. We hesitate to suggest new positions at this time. A bounce from support near its 10-dma or the $80 level would be a preferable entry point. We have two targets for LEH. Our conservative target is the $84.85-85.00 range. Our aggressive target is the $89.00-90.00 range. FYI: LEH has a very bullish pattern on its Point & Figure chart called a bullish triangle breakout and it forecasts a $111 target.

Picked on January 11 at $ 80.25
Change since picked: + 1.02
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 3.4 million

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China Life Ins. - LFC - close: 47.11 change: +0.42 stop: 43.95

Shares of LFC gapped open higher thanks to a strong day in the Chinese markets but like the Chinese ETF FXI there was no follow through on the early strength today. LFC remains under short-term technical resistance at its simple 10-dma near $48.00. Aggressive traders may want to buy this bounce. More conservative traders may want to wait for a breakout past its simple 10-dma near $48.00. Our target is the $52.50-55.00 range. We want to remind readers that this is an aggressive, higher-risk play. Most of LFC's technical indicators are bearish and the P&F chart is bearish with a $36 target. If LFC doesn't bounce higher on Monday it might be a good idea to exit early and cut your losses. More conservative traders might want to go ahead and tighten their stops toward $45.00.

Picked on January 14 at $ 46.86
Change since picked: + 0.25
Earnings Date 04/18/07 (unconfirmed)
Average Daily Volume = 1.7 million

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Lockheed Martin - LMT - cls: 96.77 change: -0.50 stop: 93.95

LMT continues to show relative strength with a decent rebound from its intraday lows near its rising 10-dma on Monday. A downgrade for defense contractor Boeing weighed on the sector but traders stepped in to buy the dip in LMT. We do not see any big changes from our weekend comments. We strongly suggest that more conservative traders, who did not exit at our first target in the $94.85-95.00 range, consider an exit now. We're currently aiming for the $99.00-100.00 zone to exit. Due to LMT's fast approaching earnings report on January 25th and its proximity to our target we're not suggesting new positions.

Picked on November 29 at $ 90.62
Change since picked: + 6.15
Earnings Date 01/25/07 (confirmed)
Average Daily Volume = 2.1 million

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Mohawk Ind. - MHK - close: 78.75 chg: +0.37 stop: 76.49

MHK displayed relative strength with a 0.47% gain on Monday. We do not see any changes from our weekend comments. We are suggesting new call positions now but this is an aggressive, higher-risk entry point. More conservative traders should use a trigger above resistance at the $80.00 mark! We'll try and keep our risk to a minimum with a stop loss under Friday's lows. Our target is the $84.00-85.00 range. We do not want to hold over the February earnings report.

Picked on January 21 at $ 78.38
Change since picked: + 0.37
Earnings Date 02/16/07 (confirmed)
Average Daily Volume = 557 thousand

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Altria Group - MO - close: 87.07 change: -0.19 stop: 85.95

Dow-component MO did a decent job resisting the sell-off that hit the DJIA on Monday. We remain on the defensive here and it might be time to consider an early exit. However, MO still has a supporting trendline near the $86.00 level and there is still a chance for a rebound from support. If you're looking for a new entry point we'd watch for a bounce from current levels near $87.00 or a bounce near $86.50 (fyi - the low today was $86.62). Don't forget that MO reports earnings on January 31st and we do not want to hold over the report. We are targeting a rally into the $92.50-95.00 range. The P&F chart currently points to a $114 target.

Picked on January 04 at $ 87.65
Change since picked: - 0.58
Earnings Date 01/31/07 (confirmed)
Average Daily Volume = 8.8 million

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Marathon Oil - MRO - close: 87.49 change: +0.32 stop: 83.90

Another round of cold-weather forecasts first pushed up natural gas and crude oil followed it higher. Yet the rally failed as traders decided to exit ahead of crude oil futures expiration today. The early strength in oil lifted shares of MRO above resistance at the $88.00 level and the stock hit our trigger to buy calls at $88.05. The play is now open and our target is the $93.50-94.00 range. However, we would wait for another rise past $88.00 or today's high at $88.18 before considering new positions. There is potential resistance near $90 and its 50-dma.

Picked on January 22 at $ 88.05
Change since picked: + 0.56
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 3.7 million

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Teleflex - TFX - close: 66.39 chg: -0.28 stop: 64.75

Industrial stocks were hit with profit taking on Monday and shares of TFX dipped to $66.06, just under its rising 10-dma before bouncing. We have been warning readers to expect a dip toward $66, which should be support. The bounce from today's lows can be used as a new entry point. Yet traders may want to wait for signs of a bounce in the major market averages before opening new call plays anywhere. 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 is the $71.00-72.00 range. FYI: The P&F chart points to an $81 target. We plan to exit ahead of the mid February earnings report.

Picked on January 14 at $ 67.11
Change since picked: - 0.72
Earnings Date 02/14/07 (unconfirmed)
Average Daily Volume = 202 thousand
 

Put Updates

Celgene Corp. - CELG - close: 54.17 change: -0.81 stop: 57.01

The BTK biotech index continues to look like it's building a bearish double-top pattern. Meanwhile shares of CELG continued to slide lower under its bearish trend of lower highs. The stock lost 1.47% and looks poised to break potential support near $54.00 soon. We are suggesting put positions with CELG under $56.00 (the 10-dma). Our target is the $50.50-50.00 range, near its rising 100-dma. We do not want to hold over the February 1st earnings report so we have eight trading days.

Picked on January 18 at $ 54.98
Change since picked: - 0.81
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 4.4 million

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eBay Inc. - EBAY - close: 29.32 change: -0.34 stop: 31.26

This morning an upgrade for AMZN put a bid under Internet stocks but the rally quickly failed. Shares of EBAY produced a failed rally under the $30.00 level this morning. We have two days to go before EBAY reports earnings. We want to remind readers that over the weekend we changed our strategy and plan to hold over EBAY's earnings report. More conservative traders will still want to exit ahead of the Wednesday afternoon (post-market) earnings report. Our target is the $26.00-25.00 range.

Picked on January 08 at $ 29.70
Change since picked: - 0.38
Earnings Date 01/24/07 (confirmed)
Average Daily Volume = 14.5 million

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Whole Foods - WFMI - close: 44.19 chg: +0.23 stop: 46.55

WFMI produced a minor oversold bounce on Monday following Friday's technical breakdown under support near $45.00. We would still consider new put positions here or on a failed rally under the $45.00 mark. Our target is the $40.25-40.00 range. We do not want to hold over the early February earnings report. FYI: The P&F chart points to a $26 target.

Picked on January 19 at $ 44.85
Change since picked: - 0.66
Earnings Date 02/08/07 (unconfirmed)
Average Daily Volume = 3.3 million
 

Strangle Updates

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Dropped Calls

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Dropped Puts

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Dropped Strangles

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