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Call Updates

Penn National Gaming - PENN - cls: 57.59 chg: -0.71 stop: n/a

It's looking pretty ugly in PENN these days. The stock dipped to $56.16 before paring its losses today. Somebody bought the dip at its rising 50-dma. We've been waiting for news that a new bidder will step up and push PENN's buyout price higher. So far there has been no news. We're down to about eight days left before PENN's 45-day window to solicit another bid expires. Maybe PENN's earnings report, due out tomorrow morning, will produce some unexpected news and/or strength. We're not suggesting new positions. If you're willing to gamble on a new offer coming in over the next several days we would stick to the August strikes.

Picked on June 17 at $ 62.12
Change since picked: - 4.53
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Bear Stearns - BSC - cls: 129.28 chg: -0.57 stop: 140.55 *new*

Most of the brokers bounced after yesterday's pummeling but BSC under performed its peers and the market with another decline. The stock hit another relative low and volume came in pretty strong. We don't see any changes here except that we're adjusting the stop loss to $140.55. More conservative traders may want to take some profits here. We're sticking with our target in the $125.50-125.00 range.

Picked on July 22 at $134.72
Change since picked: - 5.44
Earnings Date 09/13/07 (unconfirmed)
Average Daily Volume = 3.4 million

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Harley Davidson - HOG - cls: 58.66 change: 0.39 stop: 60.26

HOG popped up higher this morning but was unable to truly build on the strength. The stock spent most of the session trading sideways. Watch for a failed rally near the $59.00-60.00 zone as a new entry point for bearish positions. Our target is the $52.50-50.00 range. The P&F chart already points to $42.00.

Picked on July 23 at $ 57.75
Change since picked: 0.91
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = million

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Ryanair Holdings - RYAAY - cls: 38.70 change: -0.02 stop: 40.15

We are very surprised that airline stocks did not show more weakness today given the sharp spike in crude oil prices. RYAAY, while down, performed a lot better than its peers. We are repeating our suggestion that readers may want to wait for a new relative low under $38.00 or under $37.40 before initiating new put positions. Our target is the $35.05-34.00 range, which is near the November 2006 gap. The P&F chart is already bearish with a $26 target.

Picked on July 22 at $ 38.13
Change since picked: 0.57
Earnings Date 06/05/07 (confirmed)
Average Daily Volume = 812 thousand
 

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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Advanced Micro - AMD - cls: 15.58 chg: 0.37 stop: n/a

AMD out performed its peers today with a 2.4% bounce. Volume actually came pretty strong, which might be a bad sign for the bears. We really need to see AMD trading north of $17.20 or under $13.80 if we are going to have a chance at being profitable. We're not suggesting new strangle plays at this time. The August options we suggested were the August $16 call (AMD-HQ) and the August $15 put (AMD-TC). Our estimated cost was $1.18. We want to sell if either option hits $1.85 or higher. Aggressive traders could aim for $2.40.

Picked on July 15 at $ 15.43
Change since picked: 0.15
Earnings Date 07/19/07 (confirmed)
Average Daily Volume = 26.1 million

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DaimlerChrysler - DCX - cls: 93.02 chg: 3.57 stop: n/a

DCX released its preliminary earnings news for the Daimler/Mercedes side of the company this morning. The results look pretty strong. Yet the news was overshadowed by headlines that $12 billion in debt to finance the Chrysler buyout deal with Cerberus was on hold. Bankers have had trouble finding buyers for the debt but it looks like the banks may end up holding it to get the deal done. DCX's outlook for the global automotive market appeared flat to down. You can find more by clicking on this link and scrolling down to their "outlook" section.

We are not suggesting new strangles on DCX at this time. The options in our suggested strangle were the August $95 calls (DCX-HS) and the August $85 puts (DCX-TQ). Our estimated cost was $3.70. We want to sell if either option rises to $6.45.

Picked on July 22 at $ 89.75
Change since picked: 3.27
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Intel - INTC - cls: 24.50 change: -0.02 stop: n/a

Intel still looks weak but the stock or the SOX index didn't move much today. We are not suggesting new strangle positions at this time. The options we suggested were the August $27.50 call (INQ-HY) and the August $25.00 put (INQ-TE). Our estimated cost was $0.96. We want to sell if either option hits $1.65 or higher.

Picked on July 15 at $ 25.97
Change since picked: - 1.46
Earnings Date 07/17/07 (confirmed)
Average Daily Volume = 60.3 million

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Lexmark - LXK - cls: 43.97 change: -0.88 stop: n/a

Shares of LXK slipped almost 2% after one analyst firm reiterated their "sell" rating for the stock. The stock dipped to its July 9th low and bounced. We are not suggesting new strangle positions in LXK at this time. The options in our strangle were the August $50 calls (LXK-HJ) and the August $40 puts (LXK-TU). Our estimated cost was $0.75. We want to sell if either option rises to $1.50.

Picked on July 22 at $ 45.433
Change since picked: - 1.46
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.9 million

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Manpower - MAN - close: 86.90 chg: -1.70 stop: n/a

MAN continues to sink and shares lost another 1.9% on big volume! There was an afternoon bounce from its lows but shares look headed toward the $85 level. We are not suggesting new strangle positions in MAN at this time. We were suggesting the August $100 call (MAN-HT) and the August $90 put (MAN-TR). Our estimated cost was $3.35. We want to sell if either option hits $5.75 or higher. FYI: At the moment the August $90 put (MAN-TR) is trading at 3.80bid/4.30ask.

Picked on July 15 at $ 94.600
Change since picked: - 7.70
Earnings Date 07/19/07 (confirmed)
Average Daily Volume = 636 thousand
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

Amazon.com - AMZN - cls: 86.18 chg: 16.93 stop: n/a

Target exceeded. We reported last night that investors reacted strongly to AMZN's latest earnings report and that shares were poised to gap open higher. The stock gapped open at $84.66 and traded to $88.80 before closing with a 24.4% gain. The call side of our strangle, the August $75 calls (ZQN-HO), saw the option gap open at $10.30, traded to a high of $14.08, before setting at
11.70bid/12.00ask. Our recently adjusted exit point for the option was $9.95 but we have to take the opening price given the gap higher.

Picked on July 22 at $ 71.63
Change since picked: 14.55
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 10.7 million
 

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