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Call Updates

Burlington Nor.SantaFe - BNI - cls: 80.79 chg: -0.63 stop: 77.99

Monday turned out to be a day of consolidation. Most of the market felt some profit taking after last week's strong performance. The transports slipped 0.8% and the railroad index dropped 0.5%. Shares of BNI closed down 0.77% and looks poised to continue lower. Traders bought the initial dip this morning near $80.00 but we suspect that BNI will dip toward $80.00 again and potentially toward the $79 region. We are suggesting readers buy calls on a dip or a bounce in the $79.00-80.25 zone. Our target is the $87.00-87.50 range. The Point & Figure chart points to $100 and BNI's inverse H&S pattern also suggests a $100 target.

Picked on February 1 at $ 82.01
Change since picked: - 1.22
Earnings Date 01/23/07 (confirmed)
Average Daily Volume = 2.4 million

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Bear Stearns - BSC - cls: 165.06 chg: -1.29 stop: 161.49

The broker-dealers did not escape Monday's profit taking. The XBD index slipped 0.3% and BSC closed down 0.7%. We are still suggesting new positions but odds are good that we'll get a better entry on a dip soon. We would watch for a dip into the $162.50-163.50 region as a new entry point to buy calls. BSC should have support at its rising 50-dma near $162.50, which is also near the bottom, supporting edge of its rising channel. More conservative traders may want to wait for a rally past $167.50 before initiating positions. We have two targets. Our first target is the $172.00 level. Our second target is the $174.75-175.00 range. We do not want to hold over the mid-March earnings report.

Picked on February 04 at $166.35
Change since picked: - 1.29
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Garmin - GRMN - close: 50.91 change: -0.24 stop: 48.79

We do not see any changes from our weekend new play description on GRMN. The stock remains a short-term swing trade and we're suggesting new positions with the stock above $50.00. The company is expected to report earnings on the morning of Wednesday, February 14th. That means we need to exit the night before. More conservative traders may want to use a tighter stop loss (maybe 49.49). Our target is the $54.75-55.00 range. We have six trading days.

Picked on February 04 at $ 51.15
Change since picked: - 0.24
Earnings Date 02/14/07 (confirmed)
Average Daily Volume = 2.3 million

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Macerich - MAC - close: 97.30 change: +0.70 stop: 93.46*new*

Almost there! MAC continues to rally and just posted its ninth gain in a row. We are not suggesting new positions. Our target is the $98.00-100.00 range. More conservative traders may want to exit early now. Please note that we're adjusting the stop loss to $93.46 (breakeven). This remains an aggressive, higher-risk play. We do not want to hold over the February 13th earnings report.

Picked on January 28 at $ 93.46
Change since picked: + 3.84
Earnings Date 02/13/07 (confirmed)
Average Daily Volume = 436 thousand

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OM Group - OMG - close: 48.09 change: -1.57 stop: 45.75

What happened to OMG today? We could not find anything specific to account for the stock's gap down this morning and dip to $47.11 shortly after the opening bell. We did see a press release that OMG was paying off some debt, which should be a good thing. Shares closed off their worst levels of the session but the bounce was fading from its highs. We remain bullish with the stock above $47.00 but today's unexpected sell-off puts us in a defensive mood. A bounce from here can be used as a new entry point. We are aiming for the $54.00-55.00 range. We do not want to hold over the early March earnings.

Picked on January 25 at $ 48.05
Change since picked: + 0.04
Earnings Date 03/02/07 (unconfirmed)
Average Daily Volume = 770 thousand

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Research In Motion - RIMM - cls: 136.81 chg: +3.99 stop: 124.95

RIMM is definitely marching to the beat of its own drum. The stock ignored any profit taking in tech stocks and rose another 3% following Friday's bullish breakout. There were some reports that today's rally was fueled by enthusiasm over RIMM's next hand-held product called "Indigo", which is due to be released soon. We do not see any changes from our weekend new play description. Our target is the $140.00-142.50 range. FYI: The P&F chart is still bearish due to the January sell-off.

Picked on February 04 at $132.82
Change since picked: + 3.99
Earnings Date 03/22/07 (unconfirmed)
Average Daily Volume = 9.2 million

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RTI Int. - RTI - close: 83.00 change: +0.44 stop: 76.75

This is the second day in a row that traders bought the dip near $81.20. Yet it's the third day in a row that RTI has struggled with resistance near $84.00. Overall we don't see anything out of the ordinary. This looks like a normal consolidation after the recent bullish breakout. We would still continue to buy dips anywhere above $80.00. More conservative traders may want to tighten their stops. The P&F chart points to a $105 target. Our target is the $88.00-90.00 range.

Picked on January 31 at $ 81.75
Change since picked: + 1.25
Earnings Date 03/12/07 (unconfirmed)
Average Daily Volume = 737 thousand

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Ryland Group - RYL - close: 58.23 chg: -1.06 stop: 54.99

The homebuilders experienced some profit taking on Monday following last week's big rally. We told readers over the weekend that our preferred entry point would be on a dip near $57.50. RYL provided that dip today with an intraday low at $57.56. If you missed the move it looks like RYL might dip toward $57.50 again tomorrow. Broken resistance near $57.50 should now act as support. The Point & Figure chart for RYL has produced a double-top breakout buy signal with a $70 target. We are aiming for the $64.00-65.00 range.

Picked on February 04 at $ 59.29
Change since picked: - 1.06
Earnings Date 04/25/07 (unconfirmed)
Average Daily Volume = 1.2 million

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Teleflex - TFX - close: 66.97 chg: -0.82 stop: 64.75

We do not see any changes from our weekend comments on TFX. We remain concerned by the lack of volume. We suspect that TFX is poised to dip back toward $66.50-67.00. If you're looking for a new bullish entry point wait and watch for a dip or a bounce above $66.00. Our target is the $71.00-72.00 range. The P&F chart points to an $81 target. We plan to exit ahead of the mid February earnings report. FYI: We cannot find a confirmed earnings date and it looks like TFX is due to report in the February 14th-27th range. More conservative traders may not want to open plays with a potential earnings announcement just seven trading days away.

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

F5 Networks - FFIV - close: 71.98 change: +1.00 stop: 76.25

FFIV produced a 1.4% oversold bounce on Monday. The rebound failed at short-term resistance near the sliding 10-dma. At this point in the game readers may want to wait for a new decline under $70.00 before considering new put plays. More conservative traders may want to wait on new plays until after rival Cisco Systems (CSCO) reports earnings tomorrow after the closing bell. CSCO's results and guidance could have a big influence on shares of FFIV. Our target is the $66.00-65.00 range. Traders should be aware that the rising 100-dma near $67 might offer some support. FYI: The Point & Figure chart has produced a triple-bottom breakdown sell signal with a $63 target. Plus, the company recently announced an analyst meeting for February 7th in New York.

Picked on January 28 at $ 72.70
Change since picked: - 0.72
Earnings Date 01/24/07 (confirmed)
Average Daily Volume = 1.0 million

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Ventana Medical - VMSI - cls: 40.68 chg: +0.54 stop: 42.05

VMSI produced a 1.3% oversold bounce after one analyst firm defended the stock. We half expected a bounce from $40.00, which is why we're suggesting a trigger to open plays at $39.75. More conservative traders may want to set their trigger lower to try and confirm the breakdown under $40.00. If we are triggered at $39.75 our target is the $35.50-36.00 range.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/02/07 (confirmed)
Average Daily Volume = 351 thousand
 

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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Google - GOOG - cls: 467.16 change: -14.34 stop: n/a

The sell-off resumed course on Monday. Shares of GOOG slipped almost 3% and closed near its lows for the day, which tends to be a bearish sign for the next trading day. We don't know if today's weakness was a reaction to the Viacom fight or just a delayed reaction to last week's earnings. The news in GOOG today was an announcement that GOOG, who recently purchased Youtube.com, had removed over 100,000 videos from the Youtube.com website at Viacom's request, who claimed copyright infringement. GOOG disagrees that some of the videos were violating any rights but took them down anyway as they work (or fight) with Viacom. Traders should note that GOOG might see an oversold bounce from its 100-dma near $463 soon. We would also expect some support in the $450-455 region. We are not suggesting new positions. In our original play description we suggested two different potential strangle strategies. One involved the February $530 call (GOP-BW) and the February $470 put (GOP-NG). This strategy had an estimated cost of $17.40 and we want to exit if either option rises to $29.00 or more. The second strangle strategy involved the February $550 call (GOP-BY) and the February $450 put (GOP-NJ). This second strategy had an estimated cost of $8.70 and we want to sell if either option rises to $16.00 or more.

Picked on January 28 at $495.84
Change since picked: -28.68
Earnings Date 01/31/07 (confirmed)
Average Daily Volume = 5.2 million

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United Parcel Srv. - UPS - cls: 73.68 chg: -0.49 stop: n/a

UPS, like most of the transportation sector, did not move much on Monday. Lack of movement is bad news for a strangle play. We are not suggesting new strangle positions at this time. February options expire in two weeks and considering UPS' failure to move on its earnings report more conservative traders may want to adjust their targets to break even. Our estimated cost was $1.65. We suggested the February $75 call (UPS-BO) and the February $70 put (UPS-NN). FYI: UPS announced plans to buy 27 new planes from Boeing.

Picked on January 28 at $ 72.49
Change since picked: + 1.19
Earnings Date 01/30/07 (confirmed)
Average Daily Volume = 2.9 million
 

Dropped Calls

None
 

Dropped Puts

Whole Foods - WFMI - close: 45.37 chg: +0.70 stop: 45.51

We have been stopped out of WFMI at $45.51. The stock posted another 70-cent gain and broke out past the $45.00 level and hit an intraday high of $45.54. This rebound could have legs given the recent bullish breakout past resistance and it might spark a short squeeze.

Picked on January 19 at $ 44.85
Change since picked: - 0.18
Earnings Date 02/13/07 (confirmed)
Average Daily Volume = 3.3 million
 

Dropped Strangles

None
 

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