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Call Updates

Burlington Nor.SantaFe - BNI - cls: 80.31 chg: -0.48 stop: 77.99

The railroads continued to slip lower on Tuesday thanks to a couple of downgrades in the group. BNI was not downgraded but shares dipped toward short-term technical support at its rising 10-dma. We would use a bounce from here as a new bullish entry point to buy calls. 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: - 1.70
Earnings Date 01/23/07 (confirmed)
Average Daily Volume = 2.4 million

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Bear Stearns - BSC - cls: 166.15 chg: +1.09 stop: 161.49

The broker-dealers didn't make much progress today but that didn't stop shares of BSC from bouncing higher. We are suggesting new call positions now but if a dip occurs then look for a bounce in the $162.50-163.00 region. 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: - 0.20
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Garmin - GRMN - close: 50.95 change: +0.04 stop: 48.79

The major market averages traded sideways on Tuesday and GRMN followed suit. The stock bounced between short-term support near $50.00 and overhead resistance near the 50-dma. We are 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 five trading days.

Picked on February 04 at $ 51.15
Change since picked: - 0.20
Earnings Date 02/14/07 (confirmed)
Average Daily Volume = 2.3 million

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OM Group - OMG - close: 50.41 change: +2.32 stop: 45.75

Today's bounce in OMG looks like a new bullish entry point. The stock has broken out above last week's highs and the $50.00 level. Driving the move appears to be news out today that the E.U. has approved a deal for Russian miner OAO Norilsk Nickel to buy OMG's nickel assets for $408 million (source: AP). 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: + 2.36
Earnings Date 03/02/07 (unconfirmed)
Average Daily Volume = 770 thousand

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Research In Motion - RIMM - cls: 137.60 chg: +0.79 stop: 127.75*new*

Tech stocks were hardest hit today but traders eventually bought the dip and the NASDAQ managed to (barely) close in the green. Shares of RIMM dipped to $133.74 before traders bought the dip and pushed it back into the green. The positive earnings report from CSCO tonight could renew enthusiasm for tech stocks in general tomorrow. We are raising our stop loss to $127.75. 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: + 4.78
Earnings Date 03/22/07 (unconfirmed)
Average Daily Volume = 9.2 million

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RTI Int. - RTI - close: 83.97 change: +0.97 stop: 77.75 *new*

RTI is creeping higher. The stock rose 1.1% and closed at a new all-time high. Our only concern with the rally is the fading volume, which is a cautionary flag for the bulls. We're going to inch up our stop loss to $77.75. Broken resistance near $80 should be support. 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: + 2.22
Earnings Date 03/12/07 (unconfirmed)
Average Daily Volume = 737 thousand

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Ryland Group - RYL - close: 58.45 chg: +0.22 stop: 54.99

RYL is trying to bounce. We suggested that readers try and buy the dip near $57.50. Today's low was $57.62, which is close enough. 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: - 0.84
Earnings Date 04/25/07 (unconfirmed)
Average Daily Volume = 1.2 million

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Teleflex - TFX - close: 66.84 chg: -0.13 stop: 64.75

We still don't see any changes from our weekend comments on TFX.
Recently our concerns have been the lack of volume and today's volume came in pretty low. We suggested buying a bounce or a dip near $66.00 and today's intraday low was $66.34, which is probably close enough. 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: - 0.27
Earnings Date 02/14/07 (unconfirmed)
Average Daily Volume = 202 thousand
 

Put Updates

F5 Networks - FFIV - close: 72.19 change: +0.21 stop: 76.25

Double-check your stop loss and make sure you're comfortable with how much risk you are taking. Tonight's earnings report from CSCO could have a big impact on FFIV. CSCO reported after the bell and beat estimates for both profits and revenues. CSCO was up strongly after hours and the bullish news is lifting shares of FFIV as well. Shares of FFIV were trading near $73.00 in after hours. FFIV should have short-term resistance near $75.00 and its simple 50-dma. More conservative traders may want to adjust their stop toward $75.00. We're not suggesting new positions at this time until we see how FFIV reacts tomorrow. 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: - 0.51
Earnings Date 01/24/07 (confirmed)
Average Daily Volume = 1.0 million

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Ventana Medical - VMSI - cls: 41.05 chg: +0.37 stop: 42.05

VMSI is still trying to bounce and the stock rose 0.9% on Tuesday. We are waiting for a breakdown under $40.0.00. Our suggested trigger to buy puts is 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: 471.48 change: +4.32 stop: n/a

Traders have a choice to make. It's been four days sine GOOG's earnings report. Normally GOOG tends to make its biggest post-earnings move in the three to four days after the announcement. Do we exit now or do we hang on? February options expire in less than two weeks so that's not much time. Any option not yet in the money will see the premiums diminish very rapidly. If GOOG tries to bounce then the put side of our strangle will wither away even faster. You can see the dilemma. GOOG has produced a bearish double top, a bearish breakdown, failed rally and sell signal. Yet we're running out of time and our options are still out of the money. We are choosing to stick it out and see if GOOG will continue to fall. However, after tonight's bullish earnings report from CSCO the tech sector is likely to bounce tomorrow. More conservative traders may want to cut their losses and exit early! 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: -24.36
Earnings Date 01/31/07 (confirmed)
Average Daily Volume = 5.2 million

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United Parcel Srv. - UPS - cls: 73.93 chg: +0.25 stop: n/a

UPS is still not moving and that is the worst thing that can happen for us and this strangle play. We are not suggesting new strangle positions at this time. February options expire in less than 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).

Picked on January 28 at $ 72.49
Change since picked: + 1.44
Earnings Date 01/30/07 (confirmed)
Average Daily Volume = 2.9 million
 

Dropped Calls

Macerich - MAC - close: 100.96 change: +3.66 stop: 93.46

Target achieved and exceeded. REITs were strong today thanks in part to the Blackstone Group raising their all-cash offer to buy Equity Office Properties (EOP). The M&A news fanned the flames underneath MAC and the stock soared 3.7% and broke out past the $100 mark. Our target was the $98.00-100.00 range.

Picked on January 28 at $ 93.46
Change since picked: + 7.50
Earnings Date 02/13/07 (confirmed)
Average Daily Volume = 436 thousand
 

Dropped Puts

None
 

Dropped Strangles

None
 

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