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Call Updates

Allegheny Tech - ATI - cls: 104.53 change: -0.40 stop: 98.49

ATI did dip lower today, as expected, but traders bought the dip at $101.34. We were looking for a dip into the $100.50-100.00 range. The big bounce this afternoon and the big volume behind it is a tempting event to consider buying calls. However, we're going to stick to our plan for now. Our suggested entry range to buy calls is the $100.50-100.00 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: 60.02 change: -0.54 stop: 57.49

CELG dipped to $59.00 this afternoon before traders bought the dip . The bounce back above the $60.00 level and its 10 and 50-dma looks like a new entry point to buy calls. However, we have to warn you that today's decline following yesterday's bearish reversal pattern is a confirmation of the reversal. If you're buying calls now you may want to use a tighter stop loss (maybe just under $59.00). Our target is the $66.50-67.00 range.

Picked on July 27 at $ 61.25
Change since picked: - 1.23
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 4.1 million

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Lam Research - LRCX - cls: 57.91 chg: +0.07 stop: 53.90

Hmm... the SOX semiconductor index produced a sharp decline toward the 490 level today but the sector rebounded pretty strongly before the closing bell. This looks like a short-term bullish reversal for the group. That would suggest that LRCX is not going to trade near our suggested entry in the $55.10-54.00 zone. Readers may want to go back to our original entry zone in the $56.10-55.00 range. Of course if the sector bounces tomorrow then LRCX probably won't see any weakness. Nimble traders may want to buy calls right now with a stop loss under $56.00.

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: 81.87 change: +0.05 stop: 79.45

Good news! PCAR held support near $80.00. Traders bought the dip several times near the $80 level and the afternoon bounce looks like a new entry point to buy calls. 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: - 1.00
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.8 million

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Penn National Gaming - PENN - cls: 57.11 chg: -0.39 stop: n/a

There is no change from our previous comments on PENN. 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: - 5.01
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million

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Sears Holding - SHLD - cls: 137.57 chg: +0.78 stop: 127.49

Aggressive traders might want to buy today's bounce near the $135.00 level. We are sticking to our plan. 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: 86.85 change: +0.60 stop: 79.49

Investors bought the pull back in TEX near $85.00 and its rising 50-dma. We're not suggesting new positions at this time but nimble traders may want to consider new positions here. The $85 level was previous resistance so it's natural for it to act as support. More conservative traders may want to tighten their stops. The stock has already 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: + 2.98
Earnings Date 07/25/07 (confirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Baker Hughes - BHI - cls: 79.13 change: +0.08 stop: 84.15

Oil service stocks under performed the market today and a 2% decline in crude oil doesn't help. Shares of BHI spent the session in indecision with a high above yesterday's high and a low under Monday's low yet shares closed almost unchanged. A failed rally under $82.00 could be used as a new bearish entry point. 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: - 0.30
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 4.6 million

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Harley Davidson - HOG - cls: 57.81 change: +0.49 stop: 60.26

HOG managed an 0.8% gain after traders bought the dip near $56.00. The rebound looks like bad news for the shorts. We're not suggesting new positions at this time. The stock looks poised for a rally toward the $59.00 region. 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: + 0.06
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = million

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Lubrizol - LZ - cls: 62.61 change: -0.05 stop: 65.26

LZ didn't get very far on Wednesday. The stock continues to look bearish following last Friday's breakdown but traders are buying the dip near $61.50 and its rising 100-dma. We're not suggesting new positions at this time. 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: + 0.99
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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DaimlerChrysler - DCX - cls: 89.86 chg: -0.89 stop: n/a

It was more of the same with DCX. Yes, the stock did display some volatility but in the end shares just bounced around the same $88-92 range, which is not good news for our neutral strangle play. 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: + 0.11
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.3 million

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Lexmark - LXK - cls: 39.84 change: +0.30 stop: n/a

We are suggesting that more conservative traders may want to take an early exit right now. LXK displayed relative weakness with its failure to rebound back above $40.00 but the stock is very short-term oversold and due for a bounce. Any bounce would kill the current premiums on the puts in this play. 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: - 5.59
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.9 million
 

Dropped Calls

Diamond Offshore - DO - cls: 101.66 chg: -1.39 stop: 99.75

Oil service stocks continued lower following a 2% decline in crude oil. Shares of DO hit our stop loss at $99.75 before bouncing back into the closing bell. A new relative low under $98.50 could be used as a bearish entry point while a new rise past the $106.70-107.50 range could be used as a new bullish entry point.

Picked on July 26 at $106.36
Change since picked: - 4.70
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 2.6 million
 

Dropped Puts

None
 

Dropped Strangles

Advanced Micro - AMD - cls: 13.41 chg: -0.13 stop: n/a

Target achieved. AMD dipped to $13.03 this morning and this sent the August $15 put (AMD-TC) to an intraday high of $2.00. Our target was to exit at $1.85. Our estimated cost was $1.18. If you did not exit with us be very careful! The SOX semiconductor index has produced a very big intraday rebound, which looks like a short-term bullish reversal.

Picked on July 15 at $ 15.43
Change since picked: - 2.02
Earnings Date 07/19/07 (confirmed)
Average Daily Volume = 26.1 million
 

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