Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Ashland - ASH - cls: 62.40 change: +0.06 stop: 59.95

Shares of ASH hit a new two-month high on Friday at $64.00. The stock gapped open higher and ran to $64.00 before paring its gains. Unfortunately, the move now looks like a short-term (bearish) failed rally pattern. We didn't see any specific news or event to account for the early morning strength. However, the new relative high pushed the Point & Figure chart into a new buy signal with a new $75 price target. We would watch for a dip back toward $62.00. A dip or bounce near $62 could be used as a new entry point for bullish positions. However, bear in mind that we're aiming for the $200-dma near $64.50. More aggressive traders may want to aim higher but we would not hold over the late July earnings report.

Suggested Options:
If ASH provides a new entry point we would consider the July calls.

Picked on June 10 at $ 61.49
Change since picked: + 0.91
Earnings Date 07/23/07 (unconfirmed)
Average Daily Volume = 657 thousand

---

Avery Dennison - AVY - cls: 66.69 chg: +0.25 stop: 64.19

AVY continued to rally on Friday and shares hit new ten-week highs. We remain bullish on the stock and a move over $67.00 would reverse the P&F chart into a new buy signal. Readers can choose to buy calls here or look for a dip back toward $66.00 or the $65.50 zone. More conservative traders might still want to tighten their stops toward $64.80-65.00. Our target is the $69.75-70.00 range.

Suggested Options:
We are suggesting the July calls.

BUY CALL JUL 65.00 AVY-GM open interest=1194 current ask $3.00
BUY CALL JUL 70.00 AVY-GN open interest= 453 current ask $0.40

Picked on June 11 at $ 66.05
Change since picked: + 0.64
Earnings Date 07/24/07 (unconfirmed)
Average Daily Volume = 728 thousand

---

Baker Hughes - BHI - cls: 88.01 change: +1.63 stop: 81.75

Oil stocks continue to rise. The OIX oil index and OSX oil services index are at historic highs. Shares of BHI surged to new 52-week highs and are nearing potential resistance at its own all-time highs from early 2006. We are not suggesting new positions at this time. Our target is the $89.00-90.00 range. More conservative traders may want to tighten their stops. Should BHI see any profit taking on Monday the $86 level looks like possible short-term support.

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

Picked on June 04 at $ 84.26
Change since picked: + 3.75
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 4.3 million

---

FTSE China Index - FXI - cls: 122.73 chg: +2.88 stop: 114.90*new*

The FXI Chinese ETF continues to rocket higher. The exchange-traded fund gapped above potential resistance at the $120 level and posted a 2.4% gain on strong volume. We're raising the stop loss to $114.90. Our target is the $124.00-125.00 range. More aggressive traders may want to only close a portion of their positions in the $124-125 zone and let the rest ride. The $128-130 range might make a good aggressive target. Please note that the newsletter will close the play at $124.00 if FXI trades at or above that mark.

Suggested Options:
We're not suggesting new positions in the FXI at this time.

Picked on June 11 at $116.75
Change since picked: + 5.98
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 2.4 million

---

General Dynamics - GD - cls: 80.25 change: +0.21 stop: 78.35

Defense giant GD is struggling to participate in the market's rally and that should make the bulls nervous. The overall, long-term trend continues to look very positive but short-term GD can't seem to breakout over $81.00. Shares did hit $81.35 on Friday morning but only because an analyst firm reiterated their "buy" rating for the stock Friday morning. The strength didn't last and now the move looks like a short-term bearish failed rally pattern fueled by big volume - again this is another reason bulls should be nervous. We're not suggesting new positions at this level. Earlier last week we suggest buying calls above $81.00. At this time we would wait for a rally past $81.50 to initiate positions. We do not want to hold over the mid July earnings report. Currently we have two targets. Our first target is the $84.50-85.00 range. Our second target is the $87.50-90.00 range. The P&F chart is bullish with a $96 target.

Suggested Options:
If GD provides another entry point we would consider the July calls or August calls.

Picked on June 10 at $ 80.58
Change since picked: - 0.33
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume = 1.3 million

---

Global SantaFe - GSF - cls: 71.67 chg: +1.05 stop: 66.65

Another positive day for crude oil contributed strength to the rally in oil and oil service stocks. GSF rose 1.4% to another new high. The stock got an extra boost after one analyst firm issued positive comments on the jackup driller industry. GSF was one of three companies they were bullish on. If you are looking for a new entry point we would watch for a dip back towards the $70.00 level. Our target is the $74.50-75.00 range.

Suggested Options:
If GSF provides a new entry point we'd suggest the July calls.

Picked on June 03 at $ 68.86
Change since picked: + 2.81
Earnings Date 08/01/07 (unconfirmed)
Average Daily Volume = 4.8 million

---

China Life - LFC - cls: 50.09 chg: +1.82 stop: 45.75

Investors jumped into LFC on Friday. The stock shot higher right at the open and closed up 3.7%. Volume came in pretty strong for the rally and the close over $50.00 is bullish. We would still consider new positions here but we would prefer to buy a dip in the $49.00-48.50 zone, which is possible if LFC tries to "fill the gap" from Friday morning. LFC might see some resistance from its May highs near $51.00. Our target is the $54.00-55.00 range.

Suggested Options:
We would suggest the July calls.

Picked on June 14 at $ 48.25
Change since picked: + 1.84
Earnings Date 08/25/07 (unconfirmed)
Average Daily Volume = 1.0 million

---

XTO Energy - XTO - cls: 63.53 chg: +0.95 stop: 58.95

The rise in crude oil and the continuation of the market's rally helped XTO to another new all-time high. Volume continues to come in above average on XTO's rally, which is bullish. We are not suggesting new positions at this time. More conservative traders will want to strongly consider taking some profits right here! Our target is the $64.75-67.50 range.

Suggested Options:
We're not suggesting new bullish positions in XTO at this time.

Picked on May 27 at $ 57.63
Change since picked: + 5.90
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 3.2 million
 

Put Updates

Allegheny Tech - ATI - cls: 110.20 chg: +0.78 stop: 112.15

The battle between the bulls and bears in ATI continues. Bulls were able to reverse the bearish breakdown on June 12th but thus far the bears are holding resistance near $112.00. If the Dow Industrials can breakout to a new high early next week we would expect ATI to stop us out. We're also at a risk if there is any M&A news in the steel and metals sector on Monday. On the technical side ATI has failed three times in the last several days at $112 and volume is fading on the rebound. More aggressive traders might want to consider new puts right here. We are suggesting that readers wait for a new decline under $107.75 or $107.50 before opening new put positions. More conservative traders may want to wait for a new decline under $106. We have two targets for ATI. Our first target is the $100.50-100.00 range. Our second target is the $95.50-95.00 range. More aggressive traders may want to aim for the simple 200-dma (currently near $92). Currently the P&F chart is bearish with a $94 target.

Suggested Options:
If ATI provides another entry point we would suggest the July puts.

Picked on June 12 at $106.70
Change since picked: + 3.50
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 2.1 million

---

Gilead Sciences - GILD - cls: 80.83 chg: +0.19 stop: 82.55

The bears may be in trouble with GILD. The stock spiked to $82.17 on Friday morning but eventually gave back most of its gains and closed back under technical resistance at its 50-dma. Most of the excitement was about a potential FDA approval for GILD's potential treatment for a severe lung disease. Well investors didn't have to wait too long. After the closing bell on Friday it was announced that the FDA did approve of GILD's new ambrisentan drug to treat pulmonary arterial hypertension (PAH). One Reuters article said the drug could eventually reach $1 billion in annual sales. You can read the press release here.

Shares of GILD were trading higher after hours in the $82.25 range. Odds are good the stock will spike higher on Monday morning. The question is whether or not it will hit our stop loss at $82.55. Even if GILD hits our stop the stock continues to have significant resistance in the $84-85 range. We're not suggesting new positions at this time. FYI: The stock is set to split
2-for-1 on June 25th.

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

Picked on June 07 at $ 79.90
Change since picked: + 0.93
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume = 4.1 million

---

QUALCOMM - QCOM - cls: 42.63 change: +0.01 stop: 44.05

The first thing traders will note about QCOM's performance is how shares are not participating in the market's rally. You may recall that we're playing QCOM as a put play due to the legal battle between QCOM and BRCM. QCOM is currently on the losing end of a patent dispute and the courts have ordered a two-year ban on importing mobile phones into the U.S. with QCOM's latest 3G chips. QCOM is trying to get an emergency stay of that decision. We are at risk for any headline news in this case but right now we don't see any reason for investors to buy the stock. Readers can choose to buy puts right here or look for another failed rally under $44.00 or the 50-dma (near $43.50). More conservative traders may want to wait for a decline under $41.00 before opening positions. We're aiming for the $37.00-36.00 range.

Suggested Options:
We are suggesting the July puts. Please note that we do not want to hold over the mid July earnings report.

BUY PUT JUL 45.00 AAO-RI open interest=39448 current ask $2.45
BUY PUT JUL 42.50 AAO-RV open interest=42085 current ask $0.05
BUY PUT JUL 40.00 AAO-RH open interest=47297 current ask $0.05

Picked on June 10 at $ 41.87
Change since picked: + 0.76
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume = 18.0 million

---

Regency Centers - REG - cls: 74.38 chg: +0.63 stop: 77.76

REIT stock REG is still trying to bounce but it's stuck under round-number resistance at $75.00. The overall trend in REG continues to look bearish. However, we would watch the major averages and wait for market direction first before initiating new positions in REG. If the Dow Industrials and/or the S&P 500 breakout to new highs then we would not suggest new positions in REG. If the major averages fail at resistance and roll over then we would suggest new puts on REG. There is some support near $72.50 but our target is the $70.50-70.00 range.

Suggested Options:
Wait and watch the major averages before considering new positions in REG.

Picked on June 11 at $ 74.68
Change since picked: - 0.30
Earnings Date 08/01/07 (unconfirmed)
Average Daily Volume = 374 thousand

---

Weyerhauser - WY - cls: 82.05 chg: +0.25 stop: 82.05

We do not see any significant changes from our recent comments on WY. As of last Tuesday WY looked poised to breakout from a neutral pattern of higher lows and lower highs. We were suggesting a trigger to buy puts at $79.34. Yet instead of breaking down the stock moved higher. However, the bulls are having a tough time building on the "breakout" so we're not giving up just yet. If WY can close over $83.50 we'll drop WY as a bearish candidate. Until then we'll leave it on the newsletter with a suggested trigger to buy puts at $79.49, which is a new adjusted trigger. If we are triggered our target is the $75.00-74.00 range. The $75 level is likely to be psychological support and the $74 level was support back in March. The Point & Figure chart looks very bearish with a $61 target.

Suggested Options:
If triggered at $79.49 we would suggest the July puts.

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/03/07 (unconfirmed)
Average Daily Volume = 2.1 million
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

Play Update Archives