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Call Updates

Allegheny Tech - ATI - cls: 114.28 chg: +1.53 stop: 109.99

Given the market's strength we are once again going to suggest buying the dip or in this case Friday's bounce in ATI. The stock has been lagging the market and some if its peers this past week but the overall trend remains bullish. Plus the steel sector is hearing more talk of mergers and acquisitions heat up again. We're leaving our stop loss at $109.99 but more conservative traders may want to adjust theirs toward Thursday's low (near $111). Our target is the $119.00-120.00 range. FYI: The Point & Figure chart forecasts a $122 target. Given the bullish channel more aggressive traders may want to aim higher (see chart).

Suggested Options:
We are suggesting the June or July calls. It is up to the individual trader to decide which month and which strike price best suits their trading style and risk.

BUY CALL JUN 110 ATI-FX open interest=3253 current ask $7.30
BUY CALL JUN 115 ATI-FC open interest=3369 current ask $4.40
BUY CALL JUN 120 ATI-FY open interest=1635 current ask $2.50

BUY CALL JUL 110 ATI-GX open interest=2578 current ask $10.20
BUY CALL JUL 115 ATI-GC open interest=1937 current ask $ 7.40
BUY CALL JUL 120 ATI-GY open interest=2984 current ask $ 5.10

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: 131.05 chg: +0.16 stop: 124.95

Internet stocks in general were higher on Friday with the INX up 1.2%. Yet BIDU under performed its peers with a 0.12% gain. Momentum appears to be slowing. While we are suggesting call plays with BIDU above $130 more conservative traders may want to use a tighter stop or wait for a new relative high over $134.50 before opening positions. This is an aggressive, higher-risk play. Our target is the $139.50-140.00 range. The P&F chart is bullish with a $203 target.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 130 BDQ-FF open interest=8001 current ask $6.10
BUY CALL JUN 135 BDQ-FG open interest=3473 current ask $3.80

Picked on May 14 at $130.51
Change since picked: + 0.54
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 2.2 million

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Peabody Energy - BTU - cls: 53.51 change: +2.21 stop: 47.99

Coal stocks soared on Friday. BTU broke out over short-term resistance near $52.00 and posted a 4.3% gain on above average volume. We remain bullish on the stock but we're not suggesting new positions at this time. 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.

Suggested Options:
We are not suggesting new positions in BTU at this time.

Picked on May 09 at $ 50.70
Change since picked: + 2.81
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 5.3 million

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General Dynamics - GD - cls: 81.26 chg: +0.25 stop: 78.85

The DFI defense index closed at another new all-time high on Friday. Shares of GD posted a gain but is still struggling with short-term resistance near $81.50. While we're a little disappointed with GD's performance on Friday it is noteworthy that traders bought the dip near $80.50 midday. We are suggesting new positions here but more conservative traders will want to wait for a new relative high over $81.50 before buying calls. 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.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 80.00 GD-FP open interest=2122 current ask $2.60
BUY CALL JUN 85.00 GD-FQ open interest=1112 current ask $0.50

Picked on April 29 at $ 80.27
Change since picked: + 0.99
Earnings Date 04/25/07 (confirmed)
Average Daily Volume = 1.4 million

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Goldman Sachs - GS - cls: 230.34 chg: +2.96 stop: 224.25*new*

The broker-dealers finally showed some strength after lagging all week. Shares of GS rose 1.3% and broke out to a new all-time high over recent resistance near $230. This looks like another entry point to buy calls. Our target is the $238.00-240.00 range. The P&F chart points to a $244 target. Please note that we are adjusting our stop loss to

Suggested Options:
We are suggesting the June calls since we plan to exit ahead of the mid June earnings report. The July strikes would also work well.

BUY CALL JUN 220 GPY-FD open interest=8721 current ask $13.80
BUY CALL JUN 230 GPY-FF open interest=6403 current ask $ 7.20
BUY CALL JUN 240 GPY-FH open interest=5970 current ask $ 3.00

Picked on May 13 at $227.50
Change since picked: + 2.84
Earnings Date 06/12/07 (unconfirmed)
Average Daily Volume = 7.4 million

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Precision Castparts - PCP - cls: 114.30 chg: +0.32 stop: 109.85

PCP is still trading near all-time highs but the momentum has stalled a bit the last couple of days. We heard something on Friday about PCP might be added to the S&P 500 soon but couldn't find anything to confirm that rumor. We are not suggesting new positions at this time but a dip back toward the rising 10-dma near $112 could be a new entry point. More conservative traders may want to consider a little bit of profit taking here. Our target is the $118.00-120.00 range.

Suggested Options:
We are not suggesting new positions at this time.

Picked on May 13 at $110.91
Change since picked: + 3.39
Earnings Date 05/09/07 (confirmed)
Average Daily Volume = 1.0 million

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Sears Holding - SHLD - cls: 179.88 chg: +1.20 stop: 174.74

A positive earnings report from Kohl's (KSS) boosted the RLX retail index. The RLX rose 1.6% on Friday. SHLD under performed its peers but was still inching higher. Shares of SHLD look poised to breakout over short-term resistance at $180 soon. We are still suggesting new positions now but more conservative traders may want to wait for a rise past $180 or its 100-dma near $180.20 before opening positions. Our target is the $184.00-185.00 range. Remember, we do not want to hold over the late May earnings report.

Suggested Options:
We are suggesting the June calls. Please note we do not want to hold over the late May earnings report.

BUY CALL JUN 175 KDU-FO open interest=5235 current ask $8.40
BUY CALL JUN 180 KDU-FP open interest=6587 current ask $5.30
BUY CALL JUN 185 KDU-FQ open interest=8004 current ask $3.10

Picked on May 13 at $177.96
Change since picked: + 1.92
Earnings Date 05/31/07 (unconfirmed)
Average Daily Volume = 1.7 million

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Vangard Emergy Mkts ETF -VWO- cls: 86.78 chg: +0.61 stop: 83.45

The VWO continues to inch higher and closed near all-time highs. We remain bullish on it with the breakout over resistance near $86.00. Given the rebound we are suggesting new call positions now. 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.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 85.00 VWO-FQ open interest=34 current ask $3.70
BUY CALL JUN 90.00 VWO-FR open interest=17 current ask $1.10

Picked on May 16 at $ 86.15
Change since picked: + 0.63
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 416 thousand
 

Put Updates

Essex Property - ESS - cls: 119.23 chg: -1.03 stop: 126.55

REIT stocks continued to under perform on Friday. Shares of ESS lost 0.8% and broke down under potential support at the $120 level. This is good news for the bears. Volume came in strong on the breakdown, which is another good sign for the bears. The next level of support looks like the $115 level. Our target is the $115.50-115.00 range. FYI: The P&F chart points to a $100 target. More conservative traders may want to do some profit taking here.

Suggested Options:
We're not suggesting new plays. We want to reiterate our suggestion that traders may want to do some profit taking here.

Picked on May 16 at $124.65
Change since picked: - 5.42
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 281 million

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Itron - ITRI - cls: 67.17 change: +0.02 stop: 69.35

Unfortunately, we don't have much new to report on for ITRI. The stock is still consolidating sideways. We're expecting a breakout sooner rather than later. Shares failed to rally with the rest of the market on Friday so that might suggest that the next move will be lower. We are suggesting that readers wait for a drop under $66 before buying puts again. Our target is the $60.50-60.00 range.

Suggested Options:
If ITRI provides a new entry point we would suggest the June puts.

Picked on May 08 at $ 65.85
Change since picked: + 1.32
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 547 thousand

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Russell 2000 Ishares - IWM - cls: 81.74 chg: +0.95 stop: 83.55

The IWM is bouncing from its 50-dma and we might get another chance at an entry point this week. The IWM ishares have been struggling with resistance at the $83.00 level for weeks. The plan is to buy puts if IWM trades at $82.90 or higher. Should the market and the IWM continue to breakout higher then we'll be stopped out 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.

Suggested Options:
We are suggesting the June puts. Our trigger is at $82.90. Take your pick on a strike price.

BUY PUT JUN 84.00 IOW-RF open interest= 7636 current ask $2.76
BUY PUT JUN 83.00 IOW-RE open interest= 86768 current ask $2.15
BUY PUT JUN 82.00 IOW-RD open interest=176426 current ask $1.65
BUY PUT JUN 81.00 IOW-RC open interest=110788 current ask $1.27
BUY PUT JUN 80.00 IOW-RB open interest=255322 current ask $0.96

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: 76.70 change: -0.88 stop: 82.55 *new*

LVS sank to another new relative low on Friday. The stock has found steady resistance at its descending 10-dma over the last week. We are adjusting our stop loss to $82.55. Given the market's unnatural strength we would be cautious about opening new positions. 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.

Suggested Options:
We are not suggesting new positions in LVS at this time.

Annotated chart:

Picked on May 07 at $ 79.85
Change since picked: - 3.15
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 2.1 million

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Vital Images - VTAL - cls: 28.68 chg: +0.94 stop: 30.05

VTAL displayed some relative strength on Friday. The stock produced an oversold bounce and posted a 3.3% gain. This does look like a short-term bullish reversal. Thus if you're looking for a new entry point watch for a failed rally near $29.00 or under the $30.00 level as a possible entry. Our target is the $25.15-25.00 range.

Suggested Options:
We are not suggesting new positions at this time. Wait for a new entry point.

Picked on May 16 at $ 27.99
Change since picked: + 0.69
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 191 thousand
 

Strangle Updates

None
 

Dropped Calls

Terex - TEX - cls: 77.72 change: -1.60 stop: 77.95

We have been stopped out of TEX at $77.95. The stock posted its fourth decline in a row after hitting a new high last Monday. Friday's session looked very bearish with an early morning failed rally at the $80 level. The weekly chart shows that last week produced a big bearish reversal with its bearish engulfing candlestick pattern. If shares breakdown under $76 or $75 then readers may want to consider buying puts.

Picked on May 09 at $ 81.16
Change since picked: - 3.44
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.2 million
 

Dropped Puts

None
 

Dropped Strangles

Lockheed Martin - LMT - cls: 98.16 change: -0.29 stop: n/a

Our strangle play in LMT is a bust. The stock couldn't breakout over resistance at the $100 level nor could it break support near $93. 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.

Picked on April 22 at $ 95.40
Change since picked: + 2.76
Earnings Date 04/24/07 (confirmed)
Average Daily Volume = 1.7 million
 

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