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Call Updates

Allegheny Tech - ATI - cls: 106.81 change: 4.40 stop: 98.49

Hmm... it looks like we were not the only ones eyeing the dip in ATI. Unfortunately, we were expecting another dip this morning but traders jumped in at the open and ATI rose 4.2%. Currently our plan is to buy a dip into the $100.50-100.00 range, just above round-number support at $100 and technical support at the 200-dma. We're going to stick with the plan for now but nimble traders may want to watch for a failed rally near $110 as a short-term bearish entry point for a ride down toward $100. If triggered at $100.50 our target is the $107.50-110.00 range.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 2.0 million

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Celgene - CELG - cls: 61.75 change: 0.62 stop: 57.49

CELG is still inching higher and continues to look bullish above $60-61. Readers can choose to buy calls now or wait for a potential dip back toward the $60 level should the markets reverse lower again. Our target is the $66.50-67.00 range. As predicted the move over $61.00 has produced a new Point & figure chart buy signal with a $73 target.

Picked on July 27 at $ 61.25
Change since picked: 0.50
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 4.1 million

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Diamond Offshore - DO - cls: 102.88 chg: -0.39 stop: 99.75

Monday produced a close call in our bullish DO play. The OSX oil services index continued to dip and the sector slipped toward its rising 50-dma before bouncing. In similar fashion shares of DO dipped toward its rising 50-dma before rebounding. The intraday low was $99.87. We recently adjusted our stop loss to $99.75 so the play is still open. The midday rebound near $100 looks like a new entry point to buy calls on DO. We're suggesting two targets. Our conservative target is the $114.00-115.00 range. Our more aggressive target is the $119.00-120.00 range. The P&F chart points to a $137 target. FYI: We are expecting this to be a two or three week play since we plan to exit oil-related stocks when crude eventually corrects.

Picked on July 26 at $106.36
Change since picked: - 3.48
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 2.6 million

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Goldman Sachs - GS - cls: 195.74 change: 3.09 stop: 188.49

The financial stocks managed to bounce after a rough week last week. The broker-dealers seemed to lag behind the banks but GS still produced a 1.6% gain. This remains a very speculative, higher-risk play in our book but GS looks very oversold and due for a correction higher. The rebound from support near $190 is our aggressive entry point. The 200-dma, near $208, should now be overhead resistance. Our target is the $205-208 range. FYI: The P&F chart is incredibly bearish with a $144 target.

Picked on July 26 at $195.12
Change since picked: 0.62
Earnings Date 09/12/07 (unconfirmed)
Average Daily Volume = 6.9 million

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Lam Research - LRCX - cls: 57.74 chg: 0.87 stop: 54.45

As expected the semiconductor stocks bounced on Monday. Yet we were expecting more weakness this morning before any bounce. LRCX failed to dip toward $56.00 but that doesn't mean we may not get another chance soon. A dip into the $56-55 region would look like a new bullish entry point. We're suggesting readers use $56.10-55.00 as an entry zone to buy calls. We will set our initial stop loss at $54.45. We'll have two targets. Our conservative target is the $59.75-60.00 range. Our aggressive target is the $63.75-65.00 range. The P&F chart points to a $81 target.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 08/24/07 (confirmed)
Average Daily Volume = 2.9 million

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PACCAR - PCAR - cls: 84.24 change: 3.08 stop: 79.45

We are finally seeing investors buy the dip in PCAR. The stock rose 3.79% on strong volume today. We do not see any changes from our weekend comments. Our target is the $89.50-90.00 range. Yes, given the volatility, we would qualify this as a higher-risk, more aggressive play. FYI: The P&F chart is very bearish and points to a $61 target.

Picked on July 26 at $ 82.87
Change since picked: 1.37
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.8 million

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Penn National Gaming - PENN - cls: 57.80 chg: -0.09 stop: n/a

PENN continues to languish as the market worries the current acquisition deal won't close due to rising capital costs. PENN should be down to its last few days before the 45-day window to solicit another bidder expires. We're not suggesting new positions at this time.

Picked on June 17 at $ 62.12
Change since picked: - 4.32
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million

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Sears Holding - SHLD - cls: 139.04 chg: 2.84 stop: 127.49

SHLD bounced earlier than expected. An upgrade for Nordstrom (JWN) this morning helped lift the retail stocks. Our plan still stands. SHLD has some support near $135 but it has stronger support near $130. We are suggesting that readers buy calls on a dip into the $133.00-130.00 zone, which is where we expect it will bounce. If triggered we'll target a rebound into the $139.50-140.00 range. More aggressive traders could aim higher. Bear in mind that we don't want to hold over the mid August earnings report.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 08/16/07 (unconfirmed)
Average Daily Volume = 1.7 million

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Terex - TEX - cls: 89.28 change: 6.13 stop: 79.49

Target achieved. TEX soared 7.3% today and hit an intraday high of $90.79. Our first target was the $89.50-90.00 range. Fueling the move was Ingersoll-Rand's sale of its Bobcat unit, sparking speculation in TEX. Plus, Goldman Sachs issued some positive comments and raised their price target on TEX today. We're not suggesting new positions at this time. Our second target is the $94.00-95.00 range.

Picked on July 26 at $ 83.87
Change since picked: 5.41
Earnings Date 07/25/07 (confirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Baker Hughes - BHI - cls: 79.22 change: -0.21 stop: 84.15

Oil service stocks continued to under perform on Monday. BHI slipped 0.2% but did manage a bounce from its rising 100-dma. We are long-term bullish on the energy and oil service stocks but short-term the trend and technicals look bearish for BHI. If the stock does bounce look for a failed rally under the 10-dma as an entry point. We would still consider new positions here. Our target is the $75.25-74.00 range. The 200-dma near $74 is probably support.

Picked on July 29 at $ 79.43
Change since picked: - 0.21
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 4.6 million

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Harley Davidson - HOG - cls: 57.15 change: 0.75 stop: 60.26

Warning! HOG has produced a bullish reversal today. The rebound from its intraday low near $55.71 has created a bullish engulfing candlestick pattern. Now normally these patterns need some confirmation but this doesn't look good for the bears. We are not suggesting new positions and more conservative traders may want to tighten their stops. 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: - 0.60
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = million

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Lubrizol - LZ - cls: 62.83 change: 1.21 stop: 65.26

The market's rebound inspired a 1.9% bounce in LZ. The stock should have overhead resistance in the $63.50-65.00 zone so watch for a failed rally there as a new entry point; although we'd still consider new put positions here. Our target is the $57.00-55.00 range. $57.00 is near the top of the April gap and $55.00 is near technical support at its 200-dma. FYI: The $66.03 intraday high on Friday looks like a bad tick.

Picked on July 29 at $ 61.62
Change since picked: 1.21
Earnings Date 07/27/07 (confirmed)
Average Daily Volume = 563 thousand

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Southern Copper - PCU - cls: 111.99 chg: 2.95 stop: 113.55

No weakness here! PCU failed to see any follow through lower today. The stock rebounded near $107.50 and closed back above the $110 level. This doesn't look good for the bears. Even though PCU looks a bit overbought and due for a correction there was some news out today that may have influenced the stock price. PCU said one of its projects in Peru might be able to more than double its planned copper production to 90,000 tons. We would wait for a new decline under $109 before considering new put positions. Odds are very good that if the markets continue higher tomorrow that PCU will stop us out at $113.55. As we said over the weekend, we're really bullish on PCU but we want to buy a dip near $100 and its rising 50-dma.

Picked on July 29 at $109.04
Change since picked: 2.95
Earnings Date 08/02/07 (unconfirmed)
Average Daily Volume = 2.0 million

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Ryanair Holdings - RYAAY - cls: 36.70 change: 0.49 stop: 40.15

Airline stocks were generally down today but RYAAY displayed relative strength with a 1.3% rebound. We are not suggesting new positions at this time. Our target is the $35.05-34.00 range, which is near the November 2006 gap. The P&F chart is already bearish and its target has moved from $26 to $22 this past week.

Picked on July 22 at $ 38.13
Change since picked: - 1.43
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: 13.79 chg: -0.08 stop: n/a

AMD is still trending lower and the stock looks poised to sink again tomorrow. 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: - 0.78
Earnings Date 07/19/07 (confirmed)
Average Daily Volume = 26.1 million

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DaimlerChrysler - DCX - cls: 89.79 chg: 1.22 stop: n/a

We want to urge caution here. This back and forward (a.k.a. sideways chop) in shares of DCX is deadly to a neutral strategy like our strangle. We need the stock to pick a direction and move. The lack of reaction to the recent preliminary earnings numbers is enough of a reason to abandon this play early. August options expire in three weeks. 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: 0.04
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Lexmark - LXK - cls: 40.43 change: -1.36 stop: n/a

Shares of LXK continued to plunge. The stock lost 3.2% on heavy volume and closed near round-number support near $40.00. Shares do look oversold here and due for a bounce. More conservative traders may want to think about an early exit now to lock in a small profit. 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. The August $40 put (LXK-TU) is trading at $1.05bid/$1.15ask.

Picked on July 22 at $ 45.43
Change since picked: - 5.00
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.9 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

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