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Call Updates

Advance Auto Parts - AAP - cls: 41.20 chg: -0.47 stop: 39.90

AAP continues to consolidate lower after last week's big spike higher. We are not suggesting new positions at this time but a bounce from here, near $41.00 and its rising 10-dma, could be used as a new entry point. Our target is the $43.90-45.00 range. We do not want to hold over the mid-May earnings report. FYI: The P&F chart points to a $48 target.

Picked on April 11 at $ 40.05
Change since picked: + 1.15
Earnings Date 05/17/07 (unconfirmed)
Average Daily Volume = 854 thousand

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Armor Holdings - AH - cls: 71.50 chg: +0.69 stop: 68.99

Our new bullish play in AH is now open. The stock actually gapped down on Monday morning but traders bought the dip at $70.00. AH really surged higher midday after it was announced that the company won a new $32 million contract from the United Kingdom. Volume behind today's rally was big, which is normally a bullish sign. Our suggested entry point to buy calls was at $71.51. We would still consider new positions now although patient traders may want to wait for a potential dip towards $71.00 again. We have two targets. Our first target is the $74.75-75.00 range. Our aggressive target will be $77.50-80.00. The P&F chart is bullish and points to a $73 target.

Picked on April 30 at $ 71.51
Change since picked: - 0.01
Earnings Date 04/19/07 (confirmed)
Average Daily Volume = 482 thousand

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Abercrombie - ANF - cls: 81.66 chg: -1.73 stop: 79.85

Uh-oh! ANF under performed the market and the RLX retail index on Monday. Shares broke down under the 10-dma and closed with a 2% loss. The stock looks poised to dip toward what should be support near $80.00. Our target is the $89.00-90.00 range. We do not want to hold over the late May earnings. FYI: The Point & Figure chart suggests a $109 price target.

Picked on April 22 at $ 83.51
Change since picked: - 1.85
Earnings Date 05/23/07 (unconfirmed)
Average Daily Volume = 1.9 million

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Ctrip.com - CTRP - cls: 70.92 chg: +0.29 stop: 67.45

CTRP tried to rally this morning with a gap higher and a new three-month high at $72.42 but the afternoon market sell-off weighed on the stock. A bounce from here or near $70 could be used as a new entry point. Our short-term target is the stock's highs in the $74.50-75.00 range. The Point & Figure chart forecasts a $93 target. We do not want to hold over the May 16th earnings report.

Picked on April 29 at $ 70.63
Change since picked: + 0.29
Earnings Date 05/16/07 (confirmed)
Average Daily Volume = 389 thousand

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General Dynamics - GD - cls: 78.50 chg: -1.77 stop: 76.45

As we were writing the weekend's newsletter we debated on whether or not to wait for a breakout and use a trigger above $81.00 with GD. It looks like the decision to jump in now might not work out. Shares fell sharply, down 2.2%, toward the bottom of its recent trading range and under what should have been short-term support at the simple 10-dma. We would normally expect some support near the bottom of the gap around $78, which is also underpinned by the 50-dma. A bounce above $77.00 can be used as a new entry point and we may get a bounce sooner than you think. Today, after the closing bell, it was announced that GD had won a $244 million order from the U.S. Marines. This had shares trading higher near $79.00 in after hours markets. More conservative traders may still want to wait for a breakout over $81 before initiating positions. Our target is the 84.75-85.00 range. More aggressive traders may want to aim higher. The P&F chart has produced a triple-top breakout buy signal with a $96 target.

Picked on April 29 at $ 80.27
Change since picked: - 1.77
Earnings Date 04/25/07 (confirmed)
Average Daily Volume = 1.4 million

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Holly Corp. - HOC - cls: 63.60 chg: -0.55 stop: 59.49

HOC briefly traded above the $65.00 level midday and then sold off with the rest of the market later this afternoon. The trend remains bullish but HOC could be poised to dip toward $62.50-62.00. Our target is the $67.50-70.00 range. The P&F chart is bullish with a $74 target. We do not want to hold over the May 8th earnings report.

Picked on April 22 at $ 62.30
Change since picked: + 1.30
Earnings Date 05/08/07 (confirmed)
Average Daily Volume = 669 thousand

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Wynn Resorts - WYNN - cls: 102.21 chg: -2.31 stop: 99.95

Ouch! Today's 2.2% decline just erased any potential gains in WYNN. The stock was doing okay until about 1:30 p.m. this afternoon - that is when it began to stumble. Today's breakdown under the simple 10-dma is bearish. We would expect a pull back toward the $100 level. More conservative traders may want to exit early right now to cut their losses. Readers should note that the gaming sector will have lots of news this week with ASCA reporting earnings on Tuesday, LVS reporting on Wednesday, and MGM reporting on Thursday. WYNN is due to report earnings on or near May 5th. We plan to exit ahead of the early May earnings report. Our target is the $108.00-110.00 range. FYI: WYNN's P&F chart points to a $120 target.

Picked on April 15 at $102.44
Change since picked: - 0.23
Earnings Date 05/05/07 (unconfirmed)
Average Daily Volume = 1.4 million
 

Put Updates

AvalonBay - AVB - cls: 122.26 chg: -3.69 stop: 130.05

The sell-off in AVB continued on Monday and shares broke down from their trading range. AVB lost 2.9% on big volume, which is bearish. We were suggesting a trigger to buy puts at $124.45 so the play is now open. Traders should prepare for a possible bounce near $120 since AVB is starting to look short-term oversold. Our target is the $112.50-110.00 range. The P&F chart points to a $110 target.

Picked on April 30 at $124.45
Change since picked: - 2.19
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 770 thousand

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British Airways - BAB - cls: 101.18 chg: -0.24 stop: 104.26

BAB is still drifting lower. The stock produced yet another small (bearish) failed rally near its sliding 10 and 50-dma's today. We don't see any changes from our weekend comments. More conservative traders may want to wait for a decline under $100. We'll use a $96.00-95.00 target range. More aggressive traders may want to aim for the rising 200-dma near $92. We do not want to hold over the mid-May earnings report.

Picked on April 29 at $101.42
Change since picked: - 0.24
Earnings Date 05/18/07 (unconfirmed)
Average Daily Volume = 65 thousand

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Ceradyne - CRDN - cls: 58.85 chg: -0.23 stop: 62.51

CRDN produced a small oversold bounce this morning but the bounce began to fail this afternoon. Any sort of failed rally under $60 or the 10-dma can be used as a new entry point for puts. Our short-term target is the $55.25-55.00 range. Watch out for potential support at the rising 50 or 100-dma.

Picked on April 29 at $ 59.08
Change since picked: - 0.23
Earnings Date 04/27/07 (confirmed)
Average Daily Volume = 667 thousand

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Lockheed Martin - LMT - cls: 96.14 chg: -0.55 stop: 97.51

Bears got a reprieve on Monday with a lack of follow through on LMT's rally from Friday. We're not out of the woods yet. After the bell tonight LMT got some news about another Airforce contract and LMT was trading slightly higher after hours. We're not suggesting new positions until we see a new decline under $95. We still see potential resistance near $97.50 and its 50-dma near $97.84. More aggressive traders may want to place there stop above the 50-dma.

Picked on April 24 at $ 94.82
Change since picked: + 1.32
Earnings Date 04/25/07 (confirmed)
Average Daily Volume = 1.7 million
 

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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Lockheed Martin - LMT - cls: 96.14 change: -0.55 stop: n/a

Lack of movement is the kiss of death for a strangle play. We need LMT to pick a direction and go. If the stock doesn't break one way or the other soon more conservative traders may want to abandon this play early. We're not suggesting new strangle plays at this time. The suggested options we had listed were the May $100 calls (LMT-ET) and the May $90 puts (LMT-QR). Our estimated cost was $1.50. We want to sell if either option rises to $2.25 or more.

Picked on April 22 at $ 95.40
Change since picked: + 0.74
Earnings Date 04/24/07 (confirmed)
Average Daily Volume = 1.7 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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