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Call Updates

Allegheny Tech - ATI - cls: 101.91 change: -0.49 stop: 98.49

Our bullish buy-the-dip play in ATI is now open. Shares slipped to $99.79 before rebounding. The $100 level and its rising 200-dma should be support and if you missed the early entry point we would still consider new call positions here. Our only concern is that ATI displayed relative weakness with another close in the red today. More conservative traders could raise their stops toward today's low (99.79). Our target is the $104.85-105.00 range. The next hurdle is short-term technical resistance at the 10-dma.

Picked on August 6 at $100.50
Change since picked: + 1.41
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 2.0 million

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Lam Research - LRCX - cls: 57.47 chg: +2.65 stop: 53.90

The market's big rebound on Monday certainly helped LRCX perform a big bounce of its own. The stock rallied higher right from the start, which was unexpected after Friday's weakness. Shares closed up 4.8% on above average volume, which is bullish. We would not chase the bounce at this time. More conservative traders may want to tighten their stops. Our target is the $59.75-60.00 range.

Picked on August 3 at $ 55.10
Change since picked: + 2.37
Earnings Date 08/24/07 (confirmed)
Average Daily Volume = 2.9 million

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PACCAR - PCAR - cls: 83.80 change: +3.14 stop: 79.70

Technically this is another bullish entry point on PCAR. The stock bounced from support near $80.00 again, which definitely looks like an entry point to buy calls. However, the stock is still trading under short-term technical resistance at its 10-dma and 100-dma and what is quickly becoming the top of its trading range near $85.00. We would hesitate to buy this bounce. Our target is the $89.50-90.00 range.

Picked on July 26 at $ 82.87
Change since picked: + 0.93
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.8 million

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Penn National Gaming - PENN - cls: 57.28 chg: +0.09 stop: n/a

There is nothing new to report on for PENN. We have two weeks left before August options expire. Right now the situation looks grim. The stock should be trading near its buyout price around $67. The fact that it's not would suggest that the market doesn't believe this deal will get done - at least not in its current form or price. PENN's 45-day window to solicit a higher bid has expired. We're not suggesting new positions at this time.

Picked on June 17 at $ 62.12
Change since picked: - 4.84
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million

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Sears Holding - SHLD - cls: 134.09 chg: +2.51 stop: 127.49

Entry point alert. Over the weekend we suggested to readers to wait for a dip and bounce near $130 as another entry point. SHLD slipped to $129.55 before rebounding back. This remains an aggressive, higher-risk play but today's move looks like a buying opportunity. More conservative traders could put their stop under today's low. Our target is the $139.50-140.00 range.

Picked on August 3 at $133.00
Change since picked: + 1.09
Earnings Date 08/16/07 (unconfirmed)
Average Daily Volume = 1.7 million
 

Put Updates

Avalonbay - AVB - cls: 109.77 change: -4.62 stop: 115.26

Warning! Our new play in AVB is in jeopardy. The market's big bounce fueled a 1.7% rebound in AVB and the stock looks poised to continue higher tomorrow. Helping fuel the rebound was news that AVB was increasing its stock buyback program. We would wait and watch for a new failed rally under $115 before considering new put positions.

Picked on August 05 at $109.77
Change since picked: + 0.00
Earnings Date 07/31/07 (confirmed)
Average Daily Volume = 1.0 million

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Bank of Amer. - BAC - cls: 48.16 chg: +1.16 stop: 48.51

Bullish reversal alert! We have to issue a reversal warning on BAC. Investors stepped in to buy the dip in financials. There was a lot of positive press from Wall Street today as they tried to reassure the markets that things were not as bad as they sounded last week. This definitely looks like short covering. BAC rallied 2.4% on huge volume today. Odds are good that if there is any follow through higher tomorrow we'll be stopped out at $48.51. The sad news is that the early morning low today was enough to hit our trigger and open the play at $46.75. We're not suggesting new positions at this time.

Picked on August 06 at $ 46.75
Change since picked: + 0.00
Earnings Date 07/19/07 (confirmed)
Average Daily Volume = 22.7 million

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ITT Educ. - ESI - cls: 104.47 change: +2.25 stop: 107.51

Be careful here. Traders bought the dip in ESI at the $100 mark. We warned readers that the $100 level could be short-term support. At this point we would wait and watch for a failed rally under $105 or the 10-dma near $107 before considering new bearish put positions. Our target is the $92.00-90.00 range. The P&F chart is bearish with an $86 target.

Picked on August 05 at $102.22
Change since picked: + 2.25
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 491 thousand

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MSCI Brazil iShares - EWZ - close: 61.10 chg: +0.20 stop: 64.15

We have to urge some caution with EWZ as well. The intraday breakdown under $60.00 hit our trigger point to buy puts at $59.90. However, the big afternoon bounce could have more room to run. We're not suggesting new positions at this time. Wait for a failed rally under the 10-dma around $63.35 before considering new put positions. Our target is the $55.25-55.00 range.

Picked on August 06 at $ 59.90
Change since picked: + 1.20
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 9.7 million

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FMC Tech. - FTI - cls: 89.82 change: +1.60 stop: 92.51

FTI rebounded from its lows today but the overall pattern continues to look bearish. Watch for a failed rally near $90.00 or the 10-dma near $91.00 as a new bearish entry point to buy puts. Our target is the $82.00-80.00 range. We may have to adjust our target to account for the rising 50-dma. Currently the P&F chart points to an $83 target. FYI: FTI is due to split 2-for-1 on September 4th.

Picked on August 05 at $ 88.22
Change since picked: + 1.60
Earnings Date 07/30/07 (confirmed)
Average Daily Volume = 677 thousand

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Harley Davidson - HOG - cls: 56.72 change: +1.52 stop: 60.26

We have to issue another bullish reversal alert for HOG. The stock dipped to $54.24 and rebounded back to close with a 2.7% gain. Currently the stock should find short-term resistance near the $58.00 level. We're not suggesting new positions at this time. 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: - 1.03
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = million

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Lubrizol - LZ - cls: 61.37 change: +1.43 stop: 64.15

LZ's rebound today erased Friday's decline. The pattern continues to look bearish but we'd wait for a failed rally under the 10-dma around $62.80 before considering new put positions. 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. If you want to aim for the $55 region then this looks like a new entry point for puts.

Picked on July 29 at $ 61.62
Change since picked: - 0.25
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: 90.05 chg: +0.93 stop: n/a

We are facing a worst-case scenario with DCX continuing to bounce around sideways. Shares remain inside the $88-92 trading range. 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: + 0.30
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.3 million
 

Dropped Calls

Terex - TEX - cls: 83.41 change: +1.01 stop: 79.74

TEX spiked lower this morning and tested $78.55 before rebounding. Over the weekend we raised our stop loss to $79.74 so the play is now closed. However, nimble traders might want to keep an eye on TEX since today's big intraday rebound might be used as a new entry point for bullish positions. The intraday low today was relatively close to the late June low. The stock had previously hit our conservative target in the $89.50-90.00 range several days ago.

Picked on July 26 at $ 83.87
Change since picked: - 0.46
Earnings Date 07/25/07 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Puts

Baker Hughes - BHI - cls: 76.40 change: +0.56 stop: 80.05

Target achieved and exceeded. Oil service stocks continued to look weak this morning. Shares of BHI dipped to an intraday low of $73.65. Our target was the $75.25-74.00 range. If you didn't exit be careful. The big intraday bounce looks like a short-term bullish reversal and buying opportunity.

Picked on July 29 at $ 79.43
Change since picked: - 3.03
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 4.6 million
 

Dropped Strangles

None
 

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