Penn National Gaming - PENN - cls: 56.79 chg: -0.80 stop: n/a
PENN reported earnings today and missed estimates by a penny but revenues came in above expectations. The stock traded lower with the market. The afternoon spike dipped to $54.40. The big rebound looks like a potential "hammer" style candlestick, which can be a one-day bullish reversal pattern. Unfortunately, we don't have much time left on this high-risk, speculative play. It looks like we're down to the last seven days before PENN's 45-day window to solicit another bid expires. 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
Harley Davidson - HOG - cls: 57.30 change: -1.36 stop: 60.26
HOG dipped to a new 52-week low before bouncing back to close with a 2.3% decline. Volume on the session was pretty strong but we're somewhat concerned by the afternoon bounce. The larger pattern is bearish but very short-term HOG still looks poised to rebound. 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
Ryanair Holdings - RYAAY - cls: 37.81 change: -0.89 stop: 40.15
We are growing less and less excited about the RYAAY put play. The stock did gap down and close with a 2.2% loss. However, the XAL airline index dove 4.4% marking it as one of the market's worst performing sectors today. RYAAY seems to be showing too much relative strength. The trend is bearish but we hesitate to open new put positions at this time unless we see a clear failed rally in the $38-39 zone. 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
(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.)
Advanced Micro - AMD - cls: 14.73 chg: -0.85 stop: n/a
It was a big day for AMD. The stock broke down under short-term support at the $15.00 level and did so on big volume! Shares closed with a 5.4% decline. 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
DaimlerChrysler - DCX - cls: 88.91 chg: -4.11 stop: n/a
DCX has reversed again, this time losing 4.4% and closing at a new four-week low. 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
Intel - INTC - cls: 24.07 change: -0.43 stop: n/a
INTC dipped toward its rising 50-dma before bouncing back to close with a 1.75% decline. If the stock bounces we would look for the $24.50-25.00 zone to act as overhead resistance. 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. FYI: The August $25 put (INQ-TE) hit an intraday high of $1.54 and is trading at $1.21bid/$1.29ask.
Picked on July 15 at $ 25.97
Lexmark - LXK - cls: 42.21 change: -1.76 stop: n/a
LXK continues to sell-off and lost 4% on heavy volume. The stock closed at a new 18-month low. 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 $ 45.43
Manpower - MAN - close: 85.95 chg: -0.95 stop: n/a
MAN tried to bounce this morning but quickly reversed course. The stock did manage another bounce from round-number support near $85.00 this afternoon. More conservative traders may want to exit their strangle position now. MAN could easily bounce again with support near $85 and the 100-dma. The August $90 put (MAN-TR) is trading at a $4.60bid/$5.30ask. We're thinking about adjusting our target (exit price) lower on the option but we'll wait another day before making that decision. We're not suggesting new positions at this time. The options in our strangle were 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.
Picked on July 15 at $ 94.60
Bear Stearns - BSC - cls: 124.25 chg: -5.03 stop: 140.55
Target exceeded! Concern over the sub-prime issue sent the market plunging this morning. BSC gapped open lower at $126.50 and then dipped to $119.55 before bouncing back to close down 3.8%. Our target was the $125.50-125.00 range. The stock looks way overdue for a bounce but we'll be watching for a failed rally near $130 or its 10-dma as a possible new entry for more put plays.
Picked on July 22 at $134.72