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Call Updates

Intl. Bus. Mach.- IBM - cls: 115.37 chg: +0.80 stop: 109.85

IBM continues to rally. The stock out performed the broader market with a 0.69% gain on improving but still below average volume. Today's close over the $115.00 level is bullish. We want to warn readers that if Bernanke disappoints the market tomorrow we would expect IBM to follow the major averages lower. Readers may want to adjust their stops on IBM to reduce their risk. We have two targets. Our first target is the $118.00-120.00 range. Our second target is the $124.00-125.00 zone.

Picked on August 26 at $113.24
Change since picked: + 2.13
Earnings Date 10/17/07 (unconfirmed)
Average Daily Volume = 9.5 million

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Transocean - RIG - cls: 102.23 change: -1.62 stop: 99.50

There is no change from our previous comments on RIG. The stock did not see any follow through on yesterday's big rebound. We are still waiting for a breakout over resistance near $105.00 and its 50-dma near $105.50. We're suggesting a trigger to buy calls at $105.75. Our target is the $114.00-115.00 range. FYI: Readers might want to consider an alternative strategy on RIG. The stock traded sideways in a narrow range today. It looks like the stock is going to breakout one direction or the other. You may want to consider a strangle. If you bought the September $105 call and the September $100 put it would cost about $4.35. It might be a better, albeit more speculative, play to buy the September $110 call (around $0.75) and the September $95 put (around $0.90). That way the money at risk is only $1.65.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 7.3 million
 

Put Updates

Acuity Brands - AYI - cls: 52.38 change: -0.92 stop: 57.11

AYI did not experience any follow through on yesterday's bounce. That's good news for the bears. Traders sold into the morning rally near $53.66 and AYI continues to trade with a bearish pattern of lower highs. More conservative traders may want to tighten their stops and reduce their exposure. We have two targets. Our first target is the $47.75-47.50 range. Our second target is the $45.25-45.00 zone.

Picked on August 26 at $ 52.80
Change since picked: - 0.42
Earnings Date 10/04/07 (unconfirmed)
Average Daily Volume = 536 thousand
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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