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Call Updates

Broadcom - BRCM - cls: 36.60 change: +0.02 stop: 33.95

A relatively quiet day on Wall Street left shares of BRCM to churn sideways. Shares remain under resistance at the $37.00 level. Readers can wait for a bounce near $36.00 or wait for a new rally over $37.00 as a potential entry point. Our BRCM target is the $39.85-40.00 range. The Point & Figure chart is bullish with a $49 target. Please note that we do not want to hold over the mid October earnings report.

Picked on September 12 at $ 35.85
Change since picked: + 0.75
Earnings Date 10/10/07 (unconfirmed)
Average Daily Volume = 11.0 million

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Citigroup - C - clos: 46.88 change: +0.33 stop: 45.65

Shares of Citigroup continue to rebound albeit very slowly. This bounce from the $46.00 level looks like a new bullish entry point to buy calls. However, more conservative readers might want to wait for a rise past the $47.00 level or its 50-dma near $47.30 before initiating new positions. Readers might want to tighten their stops toward $46.00. Our initial target is the $49.85-50.00 range but we might decide later to add a more aggressive target at the 200-dma. Please note that we do not want to hold over the October 19th earnings report.

Picked on September 16 at $ 46.64
Change since picked: + 0.24
Earnings Date 10/19/07 (confirmed)
Average Daily Volume = 40.7 million

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Ceradyne - CRDN - cls: 75.73 change: -0.28 stop: 71.74

CRDN experienced a little bit of profit taking today but traders bought the dip at $74.40 midday. Our short-term target is the $79.50-80.00 range. The P&F chart is bullish with a $92 target.

Picked on September 25 at $ 74.61
Change since picked: + 1.22
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 653 thousand

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Intl. Bus. Mach.- IBM - cls: 117.71 chg: +0.41 stop: 113.90

The consolidation in IBM is coiling more tightly and the trend of rising lows is suggesting a bullish breakout soon. Readers might want to consider new bullish positions on a rise past $119 or $120. The stock has already hit our $118-120 target range. Our second, more-aggressive target is the $124.00-125.00 zone. FYI: The Point & Figure is very bullish with a $177 target. We do not want to hold over the mid October earnings report.

Picked on August 26 at $113.24
Change since picked: + 4.47
Earnings Date 10/17/07 (unconfirmed)
Average Daily Volume = 9.5 million

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L-3 Comm. - LLL - cls: 102.68 chg: +0.21 stop: 95.99

The rally in LLL took a day to rest and shares spent the session trading sideways. Readers can choose to buy a dip in the $100-101 region or wait for a new relative high over $103. Our target is the $107.50-110.00 range. More aggressive traders may want to aim higher.

Picked on September 25 at $100.96
Change since picked: + 1.72
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 904 thousand

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Lockheed - LMT - cls: 106.79 change: +1.07 stop: 98.99

Thursday turned out to be another bullish session for LMT. The stock dipped toward $104 (actually 103.81) but traders quickly bought the pull back and shares rebounded back to a new closing higher. Volume on the session was pretty strong. Fueling the rally was an early afternoon press release from LMT stating that the company was raising its dividend by 20% to 42 cents per share. The company also announced they were adding another 20 million shares to their stock buy back program. Our target is the $109.50-110.00 range. We are seriously considering adding a second, more aggressive target given the strength in the defensive sector and LMT. More aggressive traders may want to aim higher. The P&F chart points to a $117 target. We do not want to hold over the late October earnings.

Picked on September 24 at $103.81 *gapped higher
Change since picked: + 2.98
Earnings Date 10/24/07 (unconfirmed)
Average Daily Volume = 2.7 million

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Stryker - SYK - cls: 68.88 change: +0.98 stop: 65.90

SYK is starting to look tempting again. The stock rose past its simple 10-dma and posted a 1.4% gain on a rather lackluster day in the markets. This afternoon SYK issued a press release stating, "...announced today that it has reached a resolution with the United States Attorney's office in Newark, New Jersey in connection with its investigation of consulting practices in the orthopaedic industry.... The resolution requires the Company's Orthopaedics subsidiary to comply with certain standards and procedures in connection with the retention and payment of orthopaedic surgeon consultants related to reconstructive products and the provision of certain benefits to such surgeons." We're sticking to our plan, which calls for a trigger at $70.65 to open positions. If triggered at $70.65 our target is the $74.90-75.00 range. Given the length of SYK's consolidation we would actually aim higher, maybe the $77.50-80.00 range, but we don't have much time and plan to exit ahead of the mid October earnings report. The P&F chart is bullish with an $83 target.

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/17/07 (confirmed)
Average Daily Volume = 1.4 million

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Terex - TEX - cls: 89.89 change: +2.16 stop: 81.99 *new*

TEX just posted its fifth gain in a row. The stock rose 2.4% and managed to trade intraday over resistance at the $90 level. We remain bullish on the stock but the rally might be a little tired so don't be surprised to see a one or two day pull back. The $85-86 level should now be short-term support. We are raising our stop loss to $81.99. More conservative traders might want to use a higher stop loss. The P&F chart is very bullish with a $100 target. There will likely be some resistance near $90 but our target is the $94-95 range.

Picked on September 25 at $ 86.50
Change since picked: + 3.39
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.8 million

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Whole Foods - WFMI - cls: 48.14 change: +0.17 stop: 42.49

WFMI hit some profit taking after yesterday's big gain but bulls bought the dip and pushed WFMI back into the green. Our first target is the $49.75-50.00 range. Our second target is the $52.50-55.00 zone. We do not want to hold over the early November earnings report. We're suggesting a stop loss at $42.49 but it looks like readers might be able to get away with a stop much closer around $44.00.

Picked on September 26 at $ 46.26
Change since picked: + 1.88
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 3.2 million
 

Put Updates

Alexander & Baldwin - ALEX - cls: 49.39 chg: +0.33 stop: 52.01

The tone of the market seems to be cautiously bullish and given this generally positive undercurrent we would hesitate to open new bearish plays. ALEX continues to look bearish with shares under support near $50.00 but it looks like the bears are having a hard time. A failed rally under $50 can still be used as a new entry point but readers might want to consider a tighter stop loss. The P&F chart is already bearish with a $36 target. There is some support near $47.50 but we're aiming for a decline into the $45.50-45.00 range. We do not want to hold over the late October earnings.

Picked on September 23 at $ 49.50
Change since picked: - 0.11
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 337 thousand

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Cephalon - CEPH - cls: 72.85 chg: +0.40 stop: 74.25

Given the reaction in shares of CEPH the last two days it seems evident that investors are not worried about the FDA's recent public health warning on CEPH's Fentora drug. The general trend in CEPH is still bearish but short-term the bulls are really defending it near $72.00. We would only consider new positions with CEPH under $72 and it might be better off to wait for a new relative low (under $71.00). Our target is the $68.00-67.00 range. More aggressive traders could aim for the $65 region. The P&F chart is very bearish with a $50 target.

Picked on September 26 at $ 71.70
Change since picked: + 1.15
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 1.5 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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Dow Jones Industrial Avg. - DJX - cls: 139.13 chg: +0.35 stop: n/a

The DJIA and DJX are still inching higher. At this point we probably need to see the DJIA breakout over resistance at the 14,000 level before the DJX October $137 call option will even come close to hitting our target at $6.75. We are not suggesting new positions on the October version of our strangle. The options listed for our October strangle were the October $137 calls (DJY-JG) and the October $132 puts (DJW-VB) with an estimated cost of $4.75. We want to sell if either option hits $6.75.

Picked on September 16 at $134.43
Change since picked: + 4.70
Earnings Date 00/00/00
Average Daily Volume = million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

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