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Call Updates

Chaparral Steel - CHAP - cls: 46.79 chg: +2.09 stop: 41.99

Steel stocks turned in one of the market's best performances today. Positive comments from A.K.Steel (AKS) that they expected a +4%-5% rise in their average selling price lit a fire under the industry's stocks. Shares of CHAP responded with a 4.6% gain and a bullish breakout over any potential resistance in the $45.50-46.00 region. Shares of CHAP look poised to run towards our target in the $49.00-50.00 range. More aggressive traders may want to aim higher since the Point & Figure chart projects a $64 target.

Picked on January 14 at $ 45.16
Change since picked: + 1.63
Earnings Date 03/20/07 (unconfirmed)
Average Daily Volume = 635 thousand

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iShares China Index - FXI - close: 108.90 chg: +1.90 stop: 99.49

Shares of FXI, a Chinese-focused ETF, rose more than 1.7% on Tuesday and closed at a new two-week high. The short-term technicals are definitely improving and FXI looks ready to challenge potential resistance at the $110 level. Please note that we're raising our stop loss to $102.45. Our target is the $115.00-117.00 range. Remember, this is an ETF focused on a foreign market 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: + 3.50
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 1.3 million

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KB Home - KBH - close: 53.20 change: +1.73 stop: 49.75 *new*

Investors responded positively to DHI's earnings report this morning and that fueled a sector-wide rally in the homebuilders. The DJUSHB index rose 2.3%. Shares of KBH out performed many of its peers with a 3.3% gain on above average volume. Traders were quick to buy the dip near $51.00 this morning. It will be interesting to see if Centex's (CTX) earnings that came out tonight (beat by 4 cents) will fuel the rally or undermine it with negative guidance. Our target for KBH is the $54.90-55.00 level. More aggressive traders may want to aim higher. Please note that we're raising the stop loss to $49.75.

Picked on January 21 at $ 51.74
Change since picked: + 1.46
Earnings Date 03/19/07 (unconfirmed)
Average Daily Volume = 2.2 million

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Lehman Brothers - LEH - cls: 82.50 change: +0.38 stop: 78.95

The XBD broker-dealer index under performed the rest of the financials today. Yet we're encouraged to see the bounce (+0.4%) in shares of LEH. Given the lack of upward momentum we would hesitate to open any new call positions in LEH at this time. There is still a good chance that LEH may see a stronger dip toward support near the $80 region. 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: + 1.40
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 3.4 million

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China Life Ins. - LFC - close: 46.70 change: -0.41 stop: 44.89*new*

Shares of Chinese life-insurance company LFC continue to under perform both the U.S. markets and the Chinese markets over the last several days. The quick rebound that we were expecting has failed to materialize. More conservative traders may want to exit early right now. We are going to raise our stop loss to $44.89. We'd probably wait for a rise past $47.75 or $48.00 before considering any new positions since such a move would be a breakout above its trendline of resistance. 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.

Picked on January 14 at $ 46.86
Change since picked: - 0.16
Earnings Date 04/18/07 (unconfirmed)
Average Daily Volume = 1.7 million

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Lockheed Martin - LMT - cls: 98.74 change: +1.97 stop: 94.99*new*

Defense stocks surged on Tuesday with the DFI index rising more than 2%. Shares of LMT paced the move with a 2% gain to another new all-time high. The breakout over short-term resistance near $98 is bullish as is the strong volume on today's rally. We are exiting tomorrow one way or the other. LMT will either hit our aggressive target in the $99.00-100.00 range or we'll exit at the closing bell to avoid holding over LMT's earnings report on Thursday. We suspect that the only thing that would undercut LMT's chances of hitting our target tomorrow would be a negative earnings report from General Dynamics (GD) who reports earnings tomorrow morning. Please note that we're adjusting our stop loss to $94.99.

Picked on November 29 at $ 90.62
Change since picked: + 8.12
Earnings Date 01/25/07 (confirmed)
Average Daily Volume = 2.1 million

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Mohawk Ind. - MHK - close: 79.86 chg: +1.11 stop: 76.49

A strong day for the homebuilders rubbed off on shares of MHK. The stock rose 1.4% and is challenging resistance at the $80.00 level. We have been suggesting that more conservative traders wait for a breakout over $80.00 before opening call positions. 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: + 1.48
Earnings Date 02/16/07 (confirmed)
Average Daily Volume = 557 thousand

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Altria Group - MO - close: 87.76 change: +0.69 stop: 85.95

Shares of MO rose 0.79% with a bounce from its multi-week trendline of support. The three-day candlestick pattern also looks like a short-term bullish reversal. We are suggesting new call positions here. However, traders should note that MO is due to report earnings on January 31st and we do not want to hold over the report. More aggressive traders might want to hold over MO's earnings report. Forbes.com reported on one analyst's opinion at Goldman Sachs who suggests that investors buy MO before the upcoming earnings report because the company is likely to announce the Kraft (KFT) spin-off with earnings. There have been plenty of positive comments about the KFT spin-off being good for MO and that shares would probably see a 5% gain (or more) on the news. Then again MO is already up significantly from its lows last quarter and the spin-off news may already be price in. 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: + 0.11
Earnings Date 01/31/07 (confirmed)
Average Daily Volume = 8.8 million

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Marathon Oil - MRO - close: 90.22 change: +2.73 stop: 84.85 *new*

Rumors that President Bush would announce plans to double the country's strategic oil reserve lead crude oil to a significant rally, where the commodity closed back above $55 a barrel. The oil strength fueled a widespread rally in the energy sector. Shares of MRO surged 3.1% and confirmed the breakout from its trading range. The rise past $88.00 was another entry point for readers to buy calls. Currently MRO is now challenging resistance near $90 and its simple 50-dma. If there is any profit taking tomorrow we'd look for a dip/bounce anywhere above $88 as a new entry point. Our target is the $93.50-94.00 range. Please note that we're raising the stop loss to $84.85.

Picked on January 22 at $ 88.05
Change since picked: + 2.17
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 3.7 million

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Teleflex - TFX - close: 66.43 chg: +0.04 stop: 64.75

Industrial stocks managed a bounce today yet shares of TFX failed to truly participate. Looking at the intraday chart we can see that bulls were trying to buy the dips and, as expected, the $66.00 level is thus far acting as support. We would use the dip as a new entry point to buy calls but more conservative traders might feel more comfortable waiting for TFX to show a little more conviction and rebound back above the $67 level first. 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: - 0.68
Earnings Date 02/14/07 (unconfirmed)
Average Daily Volume = 202 thousand
 

Put Updates

Celgene Corp. - CELG - close: 53.94 change: -0.23 stop: 57.01

Biotech stocks under performed the market on Tuesday. The BTK index lost just over 1% and odds are growing that the BTK is in the process of forming a bearish double-top pattern. CELG continued to slowly drift lower and shares closed with a 0.4% loss. We do not see any changes from our previous comments. 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.

Picked on January 18 at $ 54.98
Change since picked: - 1.04
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 4.4 million

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eBay Inc. - EBAY - close: 28.62 change: -0.70 stop: 31.26

Internet stocks, as a group, under performed the broader market. The INX Internet index lost 0.6% and broke down under technical support at its rising 50-dma. Yahoo was the big story today. Shares of YHOO posted their sixth loss in a row as traders exited ahead of earnings. YHOO reported after the closing bell and beat estimates but warned for the first quarter. The after hours reaction has been surprising. At first YHOO sold off even further but now shares of YHOO are bouncing strongly in after hours markets on positive comments and an early debut for Yahoo's "Panama" service. The Yahoo's earnings warning for the first quarter could weigh on EBAY and we are expecting new relative lows for the online auction giant. We would suggest that more conservative traders exit tomorrow afternoon to avoid holding over EBAY's earnings announcement. We've recently changed our strategy and plan to hold over EBAY's results. Our target is the $26.00-25.00 range. Wall Street is looking for EBAY to report earnings of 28 cents a share.

Picked on January 08 at $ 29.70
Change since picked: - 1.08
Earnings Date 01/24/07 (confirmed)
Average Daily Volume = 14.5 million

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Whole Foods - WFMI - close: 43.64 chg: -0.55 stop: 46.55

WFMI continues to under perform and the stock sank to another new one-year low. We do not see any changes from our previous comments. Readers can choose to buy puts now or look for a failed rally under $45.00 as a new entry point. 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: - 1.21
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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