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Call Updates

ciShares China Index - FXI - close: 104.65 chg: -5.85 stop: 103.99

Ouch! The FXI just erased all of our unrealized gains and then some! The ETF gapped open at $107.72 and plunged to $104.34 before closing near its lows for a 5.2% loss. Volume was very strong on the sell-off. We are not suggesting new positions and more conservative traders should strongly consider exiting early to limit any losses. 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: - 0.75
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 1.3 million

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KB Home - KBH - close: 52.12 change: -1.69 stop: 49.99

Once again investors are doubting the rebound in the homebuilders. Beazer Homes (BZH) reported earnings today and missed estimates by 10 cent and guided lower for 2007. You might wonder why the market is reacting negatively to the news since almost all the homebuilders have warned that they are still in a "challenging" environment. Some believe that the threat of rising rates lent strength to the profit taking today. We would watch for a bounce in KBH near its rising 10-dma around $51.20 as a potential entry point. Our target remains the $54.90-55.00 level. More aggressive traders may want to aim higher.

Picked on January 21 at $ 51.74
Change since picked: + 0.38
Earnings Date 03/19/07 (unconfirmed)
Average Daily Volume = 2.2 million

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Leap Wireless - LEAP - close: 64.34 change: +3.25 stop: 57.95

Shares of LEAP really out performed the markets on Thursday. Shares rose more than 5.3% and broke out to new highs on big volume! Fueling the move were positive analyst comments for the company this morning. If you're looking for a new entry point consider waiting for a dip near the $62.00 region, which as broken resistance might be new support. Our target is the $66.00-67.50 range. We do not want to hold over the mid March earnings report.

Picked on January 24 at $ 61.09
Change since picked: + 3.25
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 437 thousand

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Lehman Brothers - LEH - cls: 80.96 change: -3.04 stop: 79.95*new*

LEH erased most of our potential gains with today's 3.6% sell-off. Volume on today's decline was relatively strong and that's not good for the bulls. Furthermore the move today looks like a bearish reversal after Wednesday's rally. More conservative traders should consider exiting early to avoid or limit any losses. We're inching up our stop loss to $79.95. We are not suggesting new plays at this time.

Picked on January 11 at $ 80.25
Change since picked: + 0.71
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 3.4 million

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Mohawk Ind. - MHK - close: 79.56 chg: -0.74 stop: 76.49

The market weakness and the homebuilders' weakness prompted some profit taking in MHK. The stock lost 0.9% but was bouncing from its lows into the closing bell. We would use a rebound from here, back above $80, as a new entry point to buy calls. More conservative traders might want to consider tighter stops. 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: + 1.18
Earnings Date 02/16/07 (confirmed)
Average Daily Volume = 557 thousand

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Altria Group - MO - close: 87.85 change: -0.07 stop: 86.45*new*

MO was resilient in the face of a widespread decline in the markets. The stock gapped open higher and then slowly drifted lower. We suspect that many investors plan to hold on to their shares until after the upcoming earnings report and potential announcement of the Kraft spin-off. Thus there is probably a lack of sellers. We are going to adjust our stop loss to $86.45, which is under the recent low. We're not suggesting new positions any more due to MO's upcoming earnings report on January 31st. 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: + 0.20
Earnings Date 01/31/07 (confirmed)
Average Daily Volume = 8.8 million

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Marathon Oil - MRO - close: 88.86 change: -1.89 stop: 84.85

A 2% pull back in crude oil left the energy stocks without much support. MRO dipped just over 2% and closed near short-term support around the $88 level. More conservative traders may want to tighten their stops. We would use a bounce from here as a new bullish entry point to buy calls. Our target is the $93.50-94.00 range. More aggressive traders may want to aim higher.

Picked on January 22 at $ 88.05
Change since picked: + 0.81
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 3.7 million

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OM Group - OMG - close: 46.17 change: -1.19 stop: 43.89

Caution! OMG produced an early morning spike to $48.14 and that was enough to open our play since the suggested trigger was at $48.05. Unfortunately, OMG failed to maintain those gains and the stock actually erased yesterday's rally. More conservative traders may want to tighten their stops here. We would look for a bounce back above $47.40 as a new entry point to buy calls. Our target is the $54.00-55.00 range. We do not want to hold over the early March earnings.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/02/07 (unconfirmed)
Average Daily Volume = 770 thousand

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Teleflex - TFX - close: 65.74 chg: -0.60 stop: 64.75

Attention! The close under $66.00 in TFX is short-term bearish for the stock. Today's decline contributed to the new MACD sell signal on the daily chart. Now that shares have broken support near $66 the next level is $65.00 with its rising 50-dma. We would hesitate to open new positions now but a bounce above the $65 level would look like a new entry point. 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: - 1.37
Earnings Date 02/14/07 (unconfirmed)
Average Daily Volume = 202 thousand
 

Put Updates

Celgene Corp. - CELG - close: 53.93 change: -1.24 stop: 57.01

CELG erased yesterday's gain and reversed the bullish breakout over $55 and its 10-dma. The decline today is good news for the bears but we're quickly running out of time. CELG is due to report earnings on February 1st and we don't want to hold over the report. Our target is the $50.50-50.00 range, near its rising 100-dma.

Picked on January 18 at $ 54.98
Change since picked: - 1.05
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 4.4 million

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Whole Foods - WFMI - close: 43.05 chg: -0.95 stop: 46.05 *new*

WFMI continues to decline. The stock lost another 2.1% on above average volume to close at a new 52-week low. Please note that we are adjusting the stop to $46.05. More conservative traders might want to use a tighter stop. 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: - 1.80
Earnings Date 02/08/07 (unconfirmed)
Average Daily Volume = 3.3 million
 

Strangle Updates

None
 

Dropped Calls

Bear Stearns - BSC - cls: 164.72 chg: -5.13 stop: 164.95

We have been stopped out of our new call play in BSC at $164.95. Market watchers claim that new concerns over rising interest rates sparked the sell-off in financials on Thursday. The profit taking was pretty sharp in the broker-dealers and BSC lost 3% with a bearish failed rally at the $170 mark and a bearish breakdown under its multi-month trendline of support. Nimble traders might want to actually consider bearish positions following today's reversal.

Picked on January 24 at $169.85
Change since picked: + 0.00
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Chaparral Steel - CHAP - cls: 49.17 chg: +0.90 stop: 44.45

Target achieved. The market weakness on Thursday failed to slow down the rally in CHAP. Shares of CHAP hit a new all-time high at $49.94 this morning. Our target was the $49.00-50.00 range. Volume was pretty strong on the move. Readers may want to keep an eye on CHAP for a future entry point down the road.

Picked on January 14 at $ 45.16
Change since picked: + 4.01
Earnings Date 03/20/07 (unconfirmed)
Average Daily Volume = 635 thousand

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China Life Ins. - LFC - close: 43.52 change: -3.12 stop: 44.99

U.S. markets were not the only ones to suffer some profit taking today. The Chinese markets also pulled back. Weakness at home combined with weakness here was too much for LFC, who had already been showing some relative weakness. The stock gapped down to open at $44.98 and then dropped towards its lows to lose 6.6%. We would have been stopped out at the open.

Picked on January 14 at $ 46.86
Change since picked: - 3.34
Earnings Date 04/18/07 (unconfirmed)
Average Daily Volume = 1.7 million
 

Dropped Puts

eBay Inc. - EBAY - close: 32.45 change: +2.45 stop: 31.26

A few days ago we announced a strategy change that we would hold over earnings with EBAY but suggested more conservative traders proceed with our original plan to exit ahead of the report. Today is a good example of why we do not want to hold over an earnings report. The stock moved significantly against us after the company reported stronger than expected earnings and raised guidance. Shares gapped open at $33.60 and hit $33.80 before succumbing to any profit taking. Our stop was at $31.26 so we would have been stopped out at the open.

Picked on January 08 at $ 29.70
Change since picked: + 2.75
Earnings Date 01/24/07 (confirmed)
Average Daily Volume = 14.5 million
 

Dropped Strangles

None
 

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