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Call Updates

Allegheny Tech - ATI - cls: 104.93 change: -1.88 stop: 98.49

Tuesday turned out to be a very bearish session with the DJIA produced a 280-point drop from its intraday highs. Shares of ATI followed suit with some early morning strength and then a sell-off. Today's move in ATI is a bearish failed rally pattern under resistance near $110 and its 50-dma. If you're nimble enough you could buy puts on today's move with a target near $100.00. Shares definitely look poised to drop toward support near $100 and its rising 200-dma. Currently we're suggesting readers buy a dip near support but the sell-off is looking so ugly you might want to wait for that dip to show signs of bouncing first. Our suggested entry range to buy calls is the $100.5-100.00 zone. 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: 60.56 change: -1.19 stop: 57.49

Reversal alert! CELG has produced a bearish reversal, failed rally and bearish engulfing candlestick pattern. We are not suggesting new positions at this time. Technically CELG "should" have support near $60.00 and its 50-dma near $59.60. We think shares are headed toward $59 and probably $58.00. More conservative traders may want to take another look at their risk and adjust their stops.

Picked on July 27 at $ 61.25
Change since picked: - 0.69
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 4.1 million

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Diamond Offshore - DO - cls: 103.18 chg: 0.30 stop: 99.75

DO closed in the green but today's session was far from bullish. Crude oil managed to hit a new all-time high over $78 a barrel today yet oil and energy stocks traded lower with the market. Shares of DO produced a bearish reversal near $106 and its simple 10-dma. The stock appears headed for the $100 level and technical support at its 50-dma. Wait for a bounce before considering new bullish positions. 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: - 3.18
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 2.6 million

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Lam Research - LRCX - cls: 57.84 chg: 0.10 stop: 53.90*new*

LRCX also closed higher today but the move looks anything but bullish. Shares produced a bearish failed rally pattern under the $60.00 level. LRCX closed near its lows for the session and looks headed for short-term support near $56.00. We suspect that the stock will trade closer toward the $55.00 level so we're adjusting our buy-the-dip entry point from $56.10-55.00 to $55.10-54.00. We'll adjust our stop loss to $53.90. 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: 81.82 change: -2.42 stop: 79.45

Watch out! PCAR is another stock that has seen its oversold bounce roll over into a very bearish failed rally pattern. The stock appears headed back toward what should be support near $80.00. Wait for some signs of a bounce after trading near $80.00 before considering new positions. 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: - 1.05
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.8 million

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Penn National Gaming - PENN - cls: 57.50 chg: -0.30 stop: n/a

PENN continues to drift lower and the future isn't looking good. The company's 45-day window to solicit a higher bid is over. Furthermore the fact that shares are trading at $57 instead of $67 is telling us the market doesn't believe this deal is going to get done. We're not suggesting new positions at this time.

Picked on June 17 at $ 62.12
Change since picked: - 4.62
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million

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Sears Holding - SHLD - cls: 136.79 chg: -2.25 stop: 127.49

Look out below! Retail stocks were hammered today. The RLX index lost 2%. SHLD fell 1.6% after producing a failed rally near $141. If you're nimble enough then consider buying puts here with a target near $130. We're still suggesting that SHLD will bounce near support around $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. 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: 86.25 change: -3.03 stop: 79.49

It was a very ugly day and TEX gave back about half of yesterday's gains. The move looks like a bearish reversal. We are not suggesting new positions at this time. Yesterday the stock hit our first target in the $89.50-90.00 range. Our second target is the $94.00-95.00 range.

Picked on July 26 at $ 83.87
Change since picked: 2.38
Earnings Date 07/25/07 (confirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Baker Hughes - BHI - cls: 79.05 change: -0.17 stop: 84.15

Shares of BHI rolled over near $81 and the move looks like another bearish entry point to buy puts. Crude oil is hitting new all-time highs but the oil stocks can't seem to build on it. 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: - 0.38
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 4.6 million

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Harley Davidson - HOG - cls: 57.32 change: 0.17 stop: 60.26

Our concern over yesterday's bullish reversal in HOG may be short lived. The stock produced a bearish failed rally near $58.00 and under its 10-dma today. Considering the market's weakness on Tuesday this may be a new entry point for puts. 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: 62.66 change: -0.17 stop: 65.26

LZ has produced a bearish failed rally under the $64.00 level. We would use this as a new entry point to buy puts. 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.

Picked on July 29 at $ 61.62
Change since picked: 1.04
Earnings Date 07/27/07 (confirmed)
Average Daily Volume = 563 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: 13.54 chg: -0.25 stop: n/a

Both AMD and the SOX index continued lower on Tuesday. AMD lost 1.8% and closed at a new six-week low. Volume came in pretty heavy on the decline, which is normally bearish. 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. More conservative traders may want to think about taking an early profit now. The August $15 put is trading at $1.53bid/$1.58ask.

Picked on July 15 at $ 15.43
Change since picked: - 1.89
Earnings Date 07/19/07 (confirmed)
Average Daily Volume = 26.1 million

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DaimlerChrysler - DCX - cls: 90.75 chg: 0.96 stop: n/a

We suspect that GM's big earnings surprise to the upside is what lifted shares of DCX today. DCX gapped open higher and then slowly began to fade under the $92 level. This oscillation back and forth around the $90 level is deadly for a neutral play like this. More conservative traders may want to abandon this play early. 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: 1.00
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Lexmark - LXK - cls: 39.54 change: -0.89 stop: n/a

LXK plunged again. The stock lost 2.2% and broke down under support at the $40.00 level. Odds are pretty good that LXK will decline again tomorrow morning and the put side of our strangle will hit our target. 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 $1.35bid/$1.45ask.

Picked on July 22 at $ 45.43
Change since picked: - 5.89
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.9 million
 

Dropped Calls

Goldman Sachs - GS - cls: 188.34 change: -7.40 stop: 188.49

Our speculative, buy-the-bounce near support play in GS has ended. GS reached an intraday high near $199 but reversed course. The news from AHM about not being able to find funding and its 85% drop on the news reinforced the recent sub-prime fears and the brokers were hammered today! GS lost 3.7% and closed at a new relative low under support near $190. Our stop loss was at $188.49.

Picked on July 26 at $195.12
Change since picked: - 6.78
Earnings Date 09/12/07 (unconfirmed)
Average Daily Volume = 6.9 million
 

Dropped Puts

Southern Copper - PCU - cls: 112.71 chg: 0.72 stop: 113.55

PCU displayed a lot of strength this morning with a gap open higher at $113.49 and a rally to $115.92. Our stop loss was at $113.55 so the play is closed. However, we would keep a close eye on the stock. PCU failed to rally past its previous highs. This might be the beginning of a short-term (bearish) double-top pattern. We remain longer-term bullish on PCU but we'd prefer to buy a dip near $100 or its rising 50-dma.

Picked on July 29 at $109.04
Change since picked: 3.67
Earnings Date 08/02/07 (unconfirmed)
Average Daily Volume = 2.0 million

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Ryanair Holdings - RYAAY - cls: 41.49 change: 4.79 stop: 40.15

This is a great example of why we don't want to hold over earnings. The airline sector index (XAL) sank 2.3% but shares of RYAAY completely ignored the market weakness. Shares of the European airline rose 13% after reporting better than expected earnings. Unfortunately, the earnings report date wasn't anywhere we could find leaving today's news an unexpected surprise. The stock opened at $41.09, which is above our stop loss.

Picked on July 22 at $ 38.13
Change since picked: 3.36
Earnings Date 06/05/07 (confirmed)
Average Daily Volume = 812 thousand

 

Dropped Strangles

None
 

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