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Call Updates

Allegheny Tech - ATI - cls: 114.28 chg: +0.14 stop: 109.99

The markets struggled to make any headway on Tuesday. Most of the major sector indices were trending lower. Shares of ATI managed a meager gain after trading sideways all day. The overall trend in ATI remains bullish but we're concerned about the weakness in the NASDAQ and the Russell potentially dragging the market lower. More conservative traders may want to avoid starting new bullish positions at this time. 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: + 0.83
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 2.4 million

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Baidu.com - BIDU - cls: 129.03 chg: -2.96 stop: 124.95

Uh-oh! There was no follow through on BIDU's bullish breakout from Monday. The stock produced what looked like an intraday failed rally near $133. The close under $130 is bearish. There is a chance that BIDU will bounce near the bottom of its gap around $128.00-128.25 or shares might find technical support at its rising 10-dma around 126.75. We are not suggesting new positions at this time. We'll wait and watch to see (if) where BIDU bounces. This is an aggressive, higher-risk play. More conservative traders, if you decided to pursue BIDU, may want to tighten their stops. Our target is the $139.50-140.00 range. The P&F chart is bullish with a $203 target.

Picked on May 14 at $130.51
Change since picked: - 1.48
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 2.2 million

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Peabody Energy - BTU - cls: 50.41 change: -0.29 stop: 47.99

Coal stocks are still getting some positive press in the media. Unfortunately, BTU is struggling to build on any momentum. Actually momentum seems to be stalling. A dip back toward $50.00 or maybe $49.50 seems like a good bet here. 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: - 0.29
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 5.3 million

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Ctrip.com - CTRP - cls: 71.49 chg: -0.61 stop: 69.99

Tomorrow is our last day for this call play on CTRP. The company reports after the closing bell so we plan to exit at the close on Wednesday, May 16th. More conservative traders may want to exit at the open tomorrow since CTRP looks poised to dip toward $70.00. Wall Street is looking for a profit of 27 cents a share.

Picked on April 29 at $ 70.63
Change since picked: + 0.86
Earnings Date 05/16/07 (confirmed)
Average Daily Volume = 389 thousand

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General Dynamics - GD - cls: 80.95 chg: +0.59 stop: 78.85 *new*

GD displayed relative strength on Tuesday but the stock couldn't hold any gains past the early May highs. Looking at the daily chart today's action might be considered a failed rally, which is usually bearish. Watch for another bounce near $80 as a new entry point. We are adjusting our stop loss to $78.85. 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: + 0.68
Earnings Date 04/25/07 (confirmed)
Average Daily Volume = 1.4 million

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Goldman Sachs - GS - cls: 224.38 chg: -1.80 stop: 222.45

The broker-dealer stocks were big under performers today. The XBD index lost 1.4% and broke down under the 250 level. The daily chart for the XBD has produced a MACD sell signal. Shares of GS are still holding up pretty well but any further weakness in the XBD or the NASDAQ or the Russell could definitely weigh on investor confidence. It doesn't help that GS' daily chart also sports a new MACD sell signal. More conservative traders may want to abandon ship with GS right here to cut their losses. We're not suggesting new positions at this time!

Picked on May 13 at $227.50
Change since picked: - 3.12
Earnings Date 06/12/07 (unconfirmed)
Average Daily Volume = 7.4 million

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Precision Castparts - PCP - cls: 112.81 chg: +1.68 stop: 106.85 *new*

PCP continues to rally and on above average volume, which tends to be bullish. We are adjusting our stop loss to $106.85. More conservative traders may want to put their stop closer to the 10-dma. Our target is the $118.00-120.00 range.

Picked on May 13 at $110.91
Change since picked: + 1.90
Earnings Date 05/09/07 (confirmed)
Average Daily Volume = 1.0 million

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Marathon Oil - MRO - cls: 111.46 chg: +2.54 stop: 104.99 *new*

Target achieved. Another positive day for crude oil helped most oil stocks close higher. MRO out performed with a 2.3% rally. Boosting shares of MRO were an upgrade to a "buy" this morning. The stock has surpassed our conservative target in the $109.85-110.00 range. The breakout over $110 on big volume is bullish but we're not suggesting new positions at this time. Our aggressive target is the $114.00-115.00 range. If you failed to take some money off the table we would definitely reconsider as MRO is looking a little short-term overbought. FYI: The P&F chart points to $110 and MRO has a 2-for-1 split coming up on June 19th. Please note that we're raising the stop loss to $104.99.

Picked on May 08 at $105.55
Change since picked: + 5.91
Earnings Date 07/31/07 (unconfirmed)
Average Daily Volume = 3.8 million

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Sears Holding - SHLD - cls: 177.00 chg: +0.23 stop: 174.74

We are reiterating yesterday's warning! SHLD has not seen any follow through on its bounce from the multi-month trendline of support. The negative earnings news from HD today did not inspire any confidence in the retailers. The RLX retail index lost almost 1% and closed at a new relative low. Furthermore the RLX looks poised for more weakness. We are not suggesting new positions in SHLD at this time and more conservative traders may just want to exit early right here to avoid or limit any losses.

Picked on May 13 at $177.96
Change since picked: - 0.96
Earnings Date 05/31/07 (unconfirmed)
Average Daily Volume = 1.7 million

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Terex - TEX - cls: 81.66 change: -1.25 stop: 77.95

Market weakness on Tuesday prompted some profit taking in TEX. Shares lost 1.5% but remain near all-time highs. A bounce near $80.00 could be used as a new entry point but given the market's recent weakness we would hesitate to open new positions. Our target is the $87.00-90.00 range. The P&F chart points to a $105 target.

Picked on May 09 at $ 81.16
Change since picked: + 0.50
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.2 million

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Vangard Emergy Mkts ETF -VWO- cls: 85.30 chg: +0.04 stop: 83.45

The VWO actually tried to rally midday but failed at resistance near $86.00 for the fifth time in the last several days. We would be extra cautious about opening new bullish positions given the NASDAQ's and Russell's current weakness. Currently we're suggesting calls on a VWO breakout over $86.00. Our trigger is at $86.15. If triggered our target is the $89.85-90.00 range. More aggressive traders may want to aim higher since the P&F chart points to $113.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 416 thousand

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WATSCO - WSO - cls: 55.70 change: -0.77 stop: 54.85 *new*

Trading in WSO took a bearish turn for the worse on Tuesday. Shares produced a failed rally under $57.50 and a breakdown under the rising 10-dma. More conservative traders may want to exit early even though WSO should have support near $55.00. We are raising our stop loss to $54.85.

Picked on May 06 at $ 55.73
Change since picked: - 0.03
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 382 thousand
 

Put Updates

Equinix - EQIX - cls: 78.21 chg: -3.30 stop: 83.55 *new*

EQIX displayed relative weakness on Tuesday with a reversal under its 10-dma and a breakdown under $80.00. Shares closed with a 4% loss. 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. Please note that we're adjusting the stop to $83.55.

Picked on May 06 at $ 82.83
Change since picked: - 4.62
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 515 thousand

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Essex Property - ESS - cls: 125.01 chg: -2.66 stop: 130.05

ESS turned in another very bearish session. Shares produced another failed rally under resistance near $129 and its 200-dma. The intraday high of $132.60 looks like a bad tick. Volume on today's sell-off was above average. 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: 66.41 change: -1.02 stop: 69.35 *new*

ITRI lost another 1.5% and the decline today looks like confirmation of Monday's failed rally. Traders can use today's weakness and close under the 50-dma as a new entry point or you can keep waiting for a drop under $66.00 before launching new put positions. We are adjusting the stop loss to $69.35. Our target is the $60.50-60.00 range.

Picked on May 08 at $ 65.85
Change since picked: + 0.56
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 547 thousand

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Russell 2000 Ishares - IWM - cls: 80.97 chg: -0.73 stop: 83.55

The Russell 2000 and its IWM ishares continue to look weak. We may have missed the entry point near $83.00. More nimble traders may want to think about chasing the IWM's current weakness. We're going to stick to our plan for now and wait for another failed rally near $83.00. We're suggesting a trigger to buy puts at $82.90. We'll try and limit our risk with a tight stop at $83.55. More aggressive traders may want to put their stop just above $84.00. If we are triggered at $82.90 then we will have two targets. Our conservative target is $80.25-80.00. Our aggressive target is the $78.25-78.00 range.

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 58.4 million

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Las Vegas - LVS - cls: 77.97 change: -0.29 stop: 85.01

LVS was upgraded to an "out perform" this morning. The news accounted for LVS' gap open at $79.45 but the rally ran out of steam near $80.00 again. The trend remains bearish. We would still consider new put positions here. 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: - 1.88
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: 99.51 change: +0.31 stop: n/a

LMT continued to rally and shares are challenging resistance near $100. Unfortunately, the current market weakness could not come at a worse time for this strangle play. If the major averages (minus the DJIA) keep sliding then LMT is going to have a hard time breaking out higher. There are only three trading days left for our strangle play on LMT. May options expire after the 18th. At this point we need to see LMT trade to $101.50 or 88.50 just to breakeven. 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: + 4.11
Earnings Date 04/24/07 (confirmed)
Average Daily Volume = 1.7 million
 

Dropped Calls

Bear Stearns - BSC - cls: 150.55 chg: -3.30 stop: 154.75

BSC displayed relative weakness on Tuesday. Shares lost 2.1% and broke down under what should have been technical support at its 50-dma and 200-dma. The selling stalled near round-number support at $150.00. It was our plan to buy calls on a breakout over $160 but it hasn't happened. We're dropping the stock as a bullish candidate (unopened). More nimble traders will want to consider buying puts on a breakdown under $150.00.

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
 

Dropped Puts

AvalonBay - AVB - cls: 122.24 chg: -2.07 stop: 125.26

We would have been stopped out of AVB at $125.26. Sometimes the market can be cruel. Before the open AVB was upgraded to a "buy". The stock spiked higher this morning on the upgrade news but the rally stalled at $127 and shares gave back all of its gains and more. The move today looks like a failed rally/bearish reversal and traders can use it as a new entry point for puts. We have to list it as a closed play. If AVB continues lower tomorrow we may re-add it as a put play again.

Picked on April 30 at $124.45
Change since picked: - 2.21
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 770 thousand
 

Dropped Strangles

None
 

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