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Call Updates

Cleveland Cliffs - CLF - close: 63.06 chg: -3.45 stop: 61.45

Another day of widespread market weakness pushed CLF down 5% and right to rising technical support at the 200-dma. We've been warning readers this would probably happen if the markets continued to slip. More conservative traders who haven't bailed out yet may want to tighten their stops but bear in mind that CLF closed at its lows for the session. Normally when a stock closes at its lows it's an ominous sign for the next day's open. We're not suggesting new positions at this time although technically a bounce from here would be a new entry point for bullish plays.

Picked on August 12 at $ 67.30
Change since picked: - 4.24
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.8 million

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Chevron - CVX - cls: 80.76 change: -1.11 stop: 79.35

Investors are selling stocks indiscriminately and another rise in crude oil was not enough to save the energy stocks from the sell-off. As expected CVX is dipping toward what should be support near $80.00. Wait and watch for a bounce before initiating positions. Our target is the $89.00-90.00 range. FYI: The P&F chart is still very bearish with a $68 target.

Picked on August 12 at $ 83.42
Change since picked: - 2.66
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 11.3 million

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Fluor - FLR - clse: 117.07 change: -7.17 stop: 114.99

Ouch! Shares of FLR were actually holding up reasonably well until the last hour of trading. Something changed in the last 60 minutes and FLR just fell off a cliff with a drop from $123 to $117. The bullish pattern of higher lows is holding for now. The problem is that traders will see the big move tonight and they might panic and push shares even lower again tomorrow. We are not suggesting new bullish positions at this time. We cannot find any specific news or event to account for the sudden sell-off in FLR.

Picked on August 13 at $123.25
Change since picked: - 6.18
Earnings Date 11/06/07 (unconfirmed)
Average Daily Volume = 1.1 million

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L.B.Foster Co. - FSTR - cls: 36.85 chg: -0.48 stop: 33.90

FSTR continues to show relative strength with a minor 1.2% decline. However, if you're looking for a new entry point wait and watch for a dip (better yet a bounce) near $35.00 and its 10-dma. Due to the market's volatility and FSTR's own volatility we are using a wide (aggressive) stop loss. We have two targets. Our first target is the $39.90-40.00 range. Our second target is the $42.00-42.50 zone. FYI: More conservative traders may want to put their stop loss closer to $35.00.

Picked on August 14 at $ 37.33
Change since picked: - 0.48
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 148 thousand

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Penn National Gaming - PENN - cls: 56.18 chg: +0.51 stop: n/a

We are only given PENN two more trading days before dropping it as a speculative play. Odds are not very good that someone will step up and make a new offer on the company in this environment. We are not suggesting new positions at this time. This was a very speculative, high-risk play, which is why there is no stop loss listed.

Picked on June 17 at $ 62.12
Change since picked: - 5.94
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million
 

Put Updates

Foster Wheeler - FWLT - cls: 95.32 chg: -6.14 stop: 105.05

Our new bearish put play in FWLT is now open. Market weakness pulled FWLT under the $100 mark and hit our trigger to buy puts at $99.50. The stock closed with a 6% loss but managed to hold above rising technical support at the 100-dma. Don't be surprised to see an oversold bounce when it tags the 100-dma soon. Our target is the $92.50-90.00 range. FYI: The P&F chart is bearish with a $68 target.

Picked on August 15 at $ 99.50
Change since picked: - 4.18
Earnings Date 11/08/07 (unconfirmed)
Average Daily Volume = 2.4 million

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Intuitive Surgical - ISRG - cls: 194.61 chg: -2.19 stop: 205.51

ISRG tried to rally this morning but shares rolled over under $202. This failed rally is a new lower high and a positive sign for the bears. Shares did break short-term support near $195 and hit our trigger to buy puts at $194.50 so the play is now open and our target is the $181.00-180.00 zone. We are a little surprised that given the widespread market weakness and the amount of profit built up into ISRG shares that the stock didn't see more profit taking today. We would still consider new positions here but you might want to use a tighter stop loss.

Picked on August 15 at $194.50
Change since picked: + 0.11
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.2 million

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Millicom - MICC - cls: 74.33 chg: -1.13 stop: 80.05

MICC actually tried to rebound this afternoon but it quickly reversed with the market plunging lower late in the day. Shares broke down under support near $75.00 and its 200-dma. The stock hit our trigger to buy puts at $74.25 so the play is now open. We have two targets. Our first target is the $70.25-70.00 range. Our second is the 67.50-67.00 zone. We would still consider new positions here. FYI: The P&F chart has produced a new bearish triangle breakdown sell signal with a $54 target.

Picked on August 15 at $ 74.25
Change since picked: + 0.08
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 733 thousand

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Vulcan Materials - VMC - cls: 88.52 chg: -2.10 stop: 92.55

VMC experienced some volatility this morning with an opening spike higher to $90.64 and then a very quick reversal and spike lower to $86.45. The stock bounced back almost as quickly before eventually rolling over and closing with a 2.3% decline on big volume. Traders had more than one opportunity to buy puts at our suggested trigger point at $89.75 although you had to be quick about it this morning. We have two targets. Our first target is the $85.25-85.00 range. Our second target is the $81.00-80.00 range. The P&F chart is bearish with an $81 target.

Picked on August 15 at $ 89.75
Change since picked: - 1.23
Earnings Date 10/30/07 (unconfirmed)
Average Daily Volume = 1.3 million
 

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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Daimler-Benz AG - DAI - cls: 82.45 chg: -2.04 stop: n/a

Shares of DAI are moving lower again but we're running out of time. There are only two days left before August options expire. Due to our time crunch we're adjusting our target on the August $85 put to $4.65, which would still (hypothetically) be a 25% gain. We are not suggesting new strangles on DCX at this time. The options in our suggested strangle were the August $95 calls (DAI-HS) and the August $85 puts (DAI-TQ). Our estimated cost was $3.70.

Picked on July 22 at $ 89.75
Change since picked: - 7.30
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.3 million
 

Dropped Calls

XTO Energy - XTO - cls: 54.05 change: -0.97 stop: 54.45

Oil stocks sold off along with the rest of the market, especially in the last hour of trading on Wednesday. XTO hit our stop loss at $54.45 and shares are headed toward potential technical support at the rising 200-dma. We would keep an eye on the oil stocks, which could reverse higher if tropical storm Dean turns into a hurricane and heads toward the Gulf of Mexico. You may recall that we warned readers on Monday that bulls were in trouble with XTO's bearish reversal pattern that occurred on Monday.

Picked on August 13 at $ 57.61
Change since picked: - 3.56
Earnings Date 10/24/07 (unconfirmed)
Average Daily Volume = 4.6 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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