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Call Updates

Allegheny Tech - ATI - cls: 112.51 chg: -3.77 stop: 108.45

Steel stocks took a beating on Thursday with most down over 2% as investors rushed to lock in some gains. ATI fell 3.2% and looks poised to dip toward what should be support near $110. We would wait and watch for a bounce near the $110 zone as a new entry point to buy calls. Our target is the $119.00-120.00 range. FYI: The Point & Figure chart forecasts a $122 target.

Picked on May 08 at $113.45
Change since picked: - 0.94
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 2.4 million

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Bear Stearns - BSC - cls: 153.53 chg: -2.03 stop: 154.75

BSC is still struggling and did not see any follow through on yesterday's rebound. We're sticking to our plan and waiting for a breakout over $160.00. Our suggested entry point to buy calls is at $160.25. Our target would be the $169.75-172.50 range. FYI: Nimble traders may want to consider buying puts if BSC breaks down under the $150 mark.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/27/07 (unconfirmed)
Average Daily Volume = 2.7 million

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Peabody Energy - BTU - cls: 49.50 change: -1.20 stop: 47.99

Caution! BTU produced a bearish reversal following Wednesday's bullish breakout. Yesterday's move may end up being a bull trap. We would wait for a new rally past $50.00 before considering new call positions. Our target is the $54.50-55.00 range. The P&F chart is very bullish with a $69 target. Our biggest concern with calls on BTU is M&A news. The risk is that BTU might announce it is acquiring one of its smaller rivals and normally shares of the acquirer go down on the announcement.

Picked on May 09 at $ 50.70
Change since picked: - 1.20
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 5.3 million

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Ctrip.com - CTRP - cls: 70.83 chg: -1.62 stop: 69.74 *new*

CTRP couldn't escape the market wide sell-off. Shares dropped 2.2% and closed under its rising 10-dma. The $70 level should be new support so we're raising the stop loss to $69.74. A bounce near $70 could be used as a new entry point but keep in mind that we plan to exit ahead of the May 16th earnings report. 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: + 0.20
Earnings Date 05/16/07 (confirmed)
Average Daily Volume = 389 thousand

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General Dynamics - GD - cls: 79.51 chg: -1.12 stop: 77.75

Defense stocks were unable to avoid the widespread market weakness. GD slipped 1.3% and closed under its 10-dma. Shares appear ready to drop back toward the $79.00-78.00 zone. We're not suggesting new positions at this time. We have two targets. Our conservative target will be the $84.75-85.00 range. Our aggressive target will be the $89.00-90.00 range. 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: - 0.76
Earnings Date 04/25/07 (confirmed)
Average Daily Volume = 1.4 million

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Lehman Brothers - LEH - cls: 75.03 chg: -1.57 stop: 74.85

Financial stocks were weak and the XBD broker-dealer index fell 1.47%. Shares of LEH under performed with a 2% drop toward round-number support at the $75.00 level. This doesn't look good for the bulls. LEH closed near its lows for the day and that doesn't bode well for tomorrow. We're expecting a dip towards the simple 200-dma near $74.50 and that means we'll be stopped out tomorrow. More aggressive traders may want to widen their stops to give LEH more room to move but we are not suggesting it. It may be worth noting that the intraday chart shows a minor head-and-shoulders pattern with a $73.00 price target. We're not suggesting new positions in LEH at this time.

Picked on May 06 at $ 77.30
Change since picked: - 2.27
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume = 5.9 million

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Marathon Oil - MRO - cls: 105.55 chg: -0.96 stop: 99.75

Oil stocks were no safe haven for the bulls on Thursday. The OIX oil index fell 1.8%. Shares of MRO managed to out perform its peers with a 0.9% loss. We're even more surprised by MRO's relative strength given news that it is under investigation by the government for a potential price manipulation scam with crude oil. The trend in MRO remains bullish but we hesitate to suggest new positions here. We have two targets. Our conservative target is the $109.85-110.00 range. Our aggressive target will be the $114.00-115.00 range. FYI: The P&F chart points to $110 and MRO has a 2-for-1 split coming up on June 19th.

Picked on May 08 at $105.55
Change since picked: + 0.00
Earnings Date 07/31/07 (unconfirmed)
Average Daily Volume = 3.8 million

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Terex - TEX - cls: 80.76 change: -0.40 stop: 77.95

TEX rallied to new highs this morning (82.91) before reversing course and closing in the red. The stock managed to out perform most of the market. Yet we wouldn't get too confident. Today's move looks like a failed rally/bearish reversal pattern. We'd probably watch for another rally past $81.50 before considering new call positions. Our target is the $87.00-90.00 range. The P&F chart is already bullish with a $105 target and is on the verge of producing a new triple-top breakout buy signal.

Picked on May 09 at $ 81.16
Change since picked: - 0.40
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.2 million

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WATSCO - WSO - cls: 56.58 change: -0.42 stop: 53.95

WSO held up pretty well given the scope of the sell-off on Thursday. We would wait and watch for a bounce near $55.00 and its rising 10-dma before considering new bullish positions. More conservative traders may want to tighten their stops toward $55.00. The P&F chart looks very positive with a bullish triangle breakout pattern and a $68 target. Our target is the $59.50-60.00 range.

Picked on May 06 at $ 55.73
Change since picked: + 0.85
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 382 thousand
 

Put Updates

AvalonBay - AVB - cls: 119.31 chg: -1.58 stop: 125.26

AVB produced a failed rally under its descending 10-dma. That's a bearish sign and could be used as a new entry point for puts. However, if you are opening new positions now consider a tighter stop near $122.50 or $122.00. 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: - 5.14
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 770 thousand

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Equinix - EQIX - cls: 81.10 chg: +0.26 stop: 86.05

EQIX produced a rebound from the $80 level in spite of the market's decline. The bounce did run out of steam early on and shares have potential resistance at the 10 and 100-dma overhead. Readers may want to tighten their stops toward $85 or lower. We're leaving our stop loss at $86.05 for now. Our target is the $75.25-75.00 range. Aggressive traders may want to aim closer to $70 but be aware that the 200-dma might offer new technical support. FYI: The P&F chart points to a $70 target.

Picked on May 06 at $ 82.83
Change since picked: - 1.74
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 515 thousand

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Essex Property - ESS - cls: 125.38 chg: -1.35 stop: 130.05

ESS lost over 1% and closed near its lows for the session. This looks like a new entry point to buy puts. Yet we're waiting for a breakdown under $125. Our suggested trigger to actually buy puts is at $124.65, which is under the March 2007 low. There is potential support near $120 but if triggered our target is the $115.50-115.00 range. FYI: The P&F chart points to a $100 target.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 281 million

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Itron - ITRI - cls: 66.20 change: -1.05 stop: 70.01

This looks like another bearish entry point on ITRI. The stock produced a failed rally under the $68 level and its simple 10-dma before sliding to a 1.5% decline. Our target is the $60.50-60.00 range. More conservative traders may want to aim for the rising 100-dma (currently near 61.00) since the 100-dma could be support.

Picked on May 08 at $ 65.85
Change since picked: + 0.35
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 547 thousand

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Las Vegas - LVS - cls: 77.20 change: -1.51 stop: 85.01

Another day, another decline for LVS. Shares lost 1.9% and posted their sixth decline in a row. It's probably about time we start expecting an oversold bounce soon. LVS should find overhead resistance near $80 and again at its 10-dma. Our target is the $71.50-70.00 range. Currently the P&F chart sports a triple-bottom breakdown sell signal with a $75 target.

Picked on May 07 at $ 79.85
Change since picked: - 2.65
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 2.1 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: 98.60 change: -0.16 stop: n/a

LMT actually displayed some relative strength by only suffering a minor 16-cent decline. Unfortunately, the trend in today's session looks like a failed rally and LMT is probably heading lower. We'd watch for the $97 level to act as short-term support. We're running out of time. May options expire after the 18th. We only have a few trading days left. 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 $2.00 or more (note the change in target price).

Picked on April 22 at $ 95.40
Change since picked: + 3.20
Earnings Date 04/24/07 (confirmed)
Average Daily Volume = 1.7 million
 

Dropped Calls

Apple Inc. - AAPL - cls: 107.34 chg: +0.46 stop: 99.85

Target achieved. Even in the face of a market-wide sell-off shares of AAPL managed to post another gain. The intraday high was $108.84. Our suggested target was the $108.00-110.00 range. If you didn't exit with us you should definitely consider a much tighter stop loss.

Picked on May 07 at $102.55
Change since picked: + 4.79
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 23.9 million

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Abbott Labs - ABT - cls: 57.33 chg: -1.35 stop: 55.69

Drug stocks were one of the worst performing sectors on Thursday. Negative comments about MRK's new cervical cancer drug didn't help the mood. Shares of ABT dropped sharply falling 2.3%. ABT is still inside its rising channel and could find support near $56.00 and its rising 50-dma. We don't want to risk it. We'd rather exit now and watch for a bounce as a new entry point then wait it out. Therefore we're suggesting an early exit!

Picked on May 06 at $ 58.30
Change since picked: - 0.97
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume = 7.1 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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