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Call Updates

Advance Auto Parts - AAP - cls: 41.30 chg: +0.36 stop: 39.90

Today's 0.8% bounce was encouraging but hardly inspiring as AAP gave back most of its early gains. Today's rebound could have been nothing more than an oversold bounce after four days of declines. We hesitate to open new call positions here and the lack of volume behind today's strength doesn't add to our enthusiasm. If AAP doesn't continue to bounce tomorrow we may just drop it. More conservative traders may want to exit early. 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: + 1.25
Earnings Date 05/17/07 (unconfirmed)
Average Daily Volume = 854 thousand

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Armor Holdings - AH - cls: 72.08 chg: +1.39 stop: 68.99

Defense stocks were a bright spot on Wednesday with the DFI index breaking out from its trading range and hitting a new all-time high. Shares of AH also hit a new all-time high this afternoon. Volume behind today's 1.9% gain was very strong, which tends to be bullish. 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: + 0.57
Earnings Date 04/19/07 (confirmed)
Average Daily Volume = 482 thousand

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Ctrip.com - CTRP - cls: 69.90 chg: -0.08 stop: 67.45

Danger! CTRP's relative weakness today is a warning sign. The stock looks poised to dip toward the $69-68 region. We would hesitate to open new positions although a rebound from here would look like 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: - 0.73
Earnings Date 05/16/07 (confirmed)
Average Daily Volume = 389 thousand

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General Dynamics - GD - cls: 79.82 chg: +1.33 stop: 76.45

GD shot higher this morning and ended the day with a 1.69% gain. This contributed a lot of strength to the DFI defense index, which broke out to a new all-time high today. If you missed buying the dip it might work better now to wait for a breakout over $81.00. 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: - 0.45
Earnings Date 04/25/07 (confirmed)
Average Daily Volume = 1.4 million

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Holly Corp. - HOC - cls: 63.78 chg: +0.64 stop: 59.49

Energy stocks participated in the very widespread rally today in spite of a pull back in crude oil futures. Shares of HOC rose 1% and looks poised to move higher. If you're feeling cautious consider tightening your stop loss. 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: + 1.48
Earnings Date 05/08/07 (confirmed)
Average Daily Volume = 669 thousand

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Wynn Resorts - WYNN - cls: 107.05 chg: +5.67 stop: 99.95

WYNN turned in a very big day with a 5.59% gain on huge volume. We didn't see any stock-specific news so odds are good that today's rally in WYNN was fueled by the positive earnings surprise from ASCA last night. Rival LVS reported after the bell today and beat estimates by a penny. MGM is due to report tomorrow morning. More conservative traders may want to exit WYNN right here. The intraday high was $107.98. Our target is the $108.00-110.00 range. We are not suggesting new positions. WYNN is due to report earnings on or near May 7th. We plan to exit ahead of the early May earnings report.

Picked on April 15 at $102.44
Change since picked: + 4.61
Earnings Date 05/07/07 (confirmed)
Average Daily Volume = 1.4 million
 

Put Updates

AvalonBay - AVB - cls: 120.19 chg: -0.04 stop: 130.05

We don't see any changes from our previous comments. AVB continues to under perform the market but we're not suggesting new positions at this time. The $120 level is a good spot for the stock to produce an oversold bounce. More conservative traders may want to think about tightening their stops toward $126 or $125, which should be new overhead resistance. More conservative traders may want to think about taking a profit here. 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: - 4.26
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 770 thousand

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Lockheed Martin - LMT - cls: 96.07 chg: -0.16 stop: 97.51

We are actually surprised that LMT didn't show more strength today. The DFI index broke out to a new all-time high. Yet LMT produced another lower high and a failed rally near $97.00, under its 50-dma. We're not going to complain about its relative weakness but we're not sure how long it will last. More conservative traders may want to tighten their stops toward $97.00. We're not suggesting new positions until we see a new decline under $95.

Picked on April 24 at $ 94.82
Change since picked: + 1.25
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: 96.07 change: -0.16 stop: n/a

There is no change from our previous comments on LMT as a strangle play. The lack of movement is bad news for this kind of strategy. 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: + 0.67
Earnings Date 04/24/07 (confirmed)
Average Daily Volume = 1.7 million
 

Dropped Calls

None
 

Dropped Puts

British Airways - BAB - cls: 103.84 chg: +2.76 stop: 104.26

Caution! We're throwing in the towel with BAB. The stock rallied sharply adding 2.7% and breaking out above its short-term trendline of resistance and its 50-dma. The rally did run out of steam near resistance around $104.00. It's still possible that the $104 level of resistance will hold. However, we're not willing to bet on it at this time and would rather cut our losses and look elsewhere.

Picked on April 29 at $101.42
Change since picked: + 2.42
Earnings Date 05/18/07 (unconfirmed)
Average Daily Volume = 65 thousand

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Ceradyne - CRDN - cls: 61.50 chg: +1.63 stop: 62.51

We are going to cut our losses early on CRDN as well. The bounce is looking too strong with today's 2.7% gain and breakout over its 10-dma. Last Friday's move looked like a bearish reversal and failed rally but there's been no follow through.

Picked on April 29 at $ 59.08
Change since picked: + 2.42
Earnings Date 04/27/07 (confirmed)
Average Daily Volume = 667 thousand
 

Dropped Strangles

None
 

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