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Call Updates

Penn National Gaming - PENN - cls: 57.91 chg: +0.84 stop: n/a

If you're feeling adventurous then today's rebound in PENN looks like a potential entry point (maybe with a stop under $56.70) but we're not suggesting new positions. The stock has been displaying way too much weakness given its pending merger and shares will be subject to any sort of headline news regarding the merger's progress. 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. FYI: We'll be dropping this stock at August option expiration.

Picked on June 17 at $ 62.12
Change since picked: - 4.18
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million

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Sears Holding - SHLD - cls: 134.17 chg: +1.12 stop: 127.49

We are still urging caution here. SHLD produced a volatile day. The stock spiked to $138.63 and then eventually gave most of its gains back. SHLD did not rebound as strongly as the rest of the market during the late afternoon bounce. SHLD rose 0.8% versus a 1.9% rally in the RLX retail index. We're not suggesting new positions at this time. Right now our target is the $139.50-140.00 range but we're thinking about adding an aggressive target in the $145.00-150.00 zone.

Picked on August 3 at $133.00
Change since picked: + 1.17
Earnings Date 08/30/07 (unconfirmed)
Average Daily Volume = 1.7 million
 

Put Updates

ITT Educ. - ESI - cls: 100.95 change: -3.40 stop: 107.51

Bears can feel a little bit more comfortable with ESI. The stock displayed a lot of relative weakness today. Shares produced a failed rally near $105.50 and its 10-dma. Plus, the stock produced a bearish engulfing candlestick pattern. The $100 level is still holding as support but ESI did lose more than 3.2% today. 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: - 1.27
Earnings Date 07/26/07 (confirmed)
Average Daily Volume = 491 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: 88.56 chg: +0.30 stop: n/a

DCX produced a meager bounce after trading near rising technical support at the 100-dma. 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: - 1.19
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.3 million
 

Dropped Calls

Lam Research - LRCX - cls: 58.63 chg: +1.04 stop: 53.90

Target achieved. The SOX index rallied sharply following strength in the NASDAQ (thanks to CSCO). This strength in the semiconductors helped LRCX hit an intraday high of $59.79. Our target was the $59.75-60.00 range. The play is closed for us but more aggressive traders may want to stick with it and aim higher. However, you can easily see on the daily chart that LRCX does have resistance at the $60.00 level.

Picked on August 3 at $ 55.10
Change since picked: + 3.53
Earnings Date 08/24/07 (confirmed)
Average Daily Volume = 2.9 million

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PACCAR - PCAR - cls: 81.92 change: -0.88 stop: 79.70

PCAR displayed relative weakness today. The stock spiked to an intraday low of $79.58 and closed with a 1% decline versus a broad-based market rally. Our stop loss was at $79.70 so we would have been stopped out early this morning. A break above $85 could be a bullish signal but the 50-dma near $88.40 and the $90.00 level are both potential resistance. A new relative low under $79.50 could be used as a new bearish entry point.

Picked on July 26 at $ 82.87
Change since picked: - 0.95
Earnings Date 07/24/07 (confirmed)
Average Daily Volume = 1.8 million
 

Dropped Puts

MSCI Brazil iShares - EWZ - close: 64.28 chg: +2.10 stop: 64.15

The Brazilian market was up sharply with the main index up more than 2.6%. Shares of EWZ reacted and rose 3.3% toward resistance near $65.00. The iShares hit our stop loss at $64.15. You can see on the daily chart how the EWZ has broken out above potential technical resistance at the 10 and 50-dma.

Picked on August 06 at $ 59.90
Change since picked: + 4.38
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 9.7 million

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FMC Tech. - FTI - cls: 94.07 change: +1.89 stop: 92.51

Oil-related stocks continued to rebound and FTI rose 2% on heavy volume, which is not good news for the bears. The stock actually gapped open higher at $92.92 before trading back down to $91.19. Unfortunately, our stop loss was at $92.51 so we would have been taken out at the open.

Picked on August 05 at $ 88.22
Change since picked: + 5.85
Earnings Date 07/30/07 (confirmed)
Average Daily Volume = 677 thousand

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Harley Davidson - HOG - cls: 58.13 change: +1.51 stop: 60.26

We are going to abandon ship on HOG. The market's rebound looks too sharp and poised to continue tomorrow. Today's market strength lifted shares of HOG past short-term resistance at the $58.00 level. We'd rather cut our losses now.

Picked on July 23 at $ 57.75
Change since picked: + 0.38
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = million

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Lubrizol - LZ - cls: 56.53 change: -3.71 stop: 64.15

Target achieved. Negative analyst comments about LZ pushed the stock lower. Shares broke support near $60 and lost 6% plunging toward technical support at the 200-dma. Our target was the $57.00-55.00 range.

Picked on July 29 at $ 61.62
Change since picked: - 5.09
Earnings Date 07/27/07 (confirmed)
Average Daily Volume = 563 thousand
 

Dropped Strangles

None
 

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