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Call Updates

Broadcom - BRCM - cls: 36.96 change: -0.21 stop: 34.45

The momentum indicators are suggesting that the rally in BRCM may be in trouble but so far the stock continues to show a trend of higher lows. There was no reaction to news that the EU was investigating BRCM's rival QCOM. 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: + 1.11
Earnings Date 10/10/07 (unconfirmed)
Average Daily Volume = 11.0 million

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Citigroup - C - clos: 47.86 change: +0.14 stop: 45.79

It was a relatively quiet day for shares of C. The stock posted another gain even after one analyst firm downgraded the stock to a "sell". After the "sell" rating came out another firm reiterated their "over weight" to defend C. Monday's move still looks like a bullish reversal pattern. Watch for resistance near $49.00 and then again near $50.00. Our initial target is the $49.85-50.00 range. 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: + 1.22
Earnings Date 10/19/07 (confirmed)
Average Daily Volume = 40.7 million

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Ceradyne - CRDN - cls: 77.17 change: -0.47 stop: 71.74

After a string of new highs the DFI defense index finally hit some profit taking. The DFI lost 1%. Shares of CRDN ended the session with a 0.6% decline after traders bought the dip near $75.65 midday. Our short-term target is the $79.50-80.00 range. The P&F chart is bullish with a $92 target. More conservative traders might want to consider a tighter stop loss on CRDN.

Picked on September 25 at $ 74.61
Change since picked: + 2.56
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 653 thousand

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Deutsche Bank - DB - cls: 132.37 chg: +1.58 stop: 124.99

European markets were mostly higher lead by strength in financials. This carried over to the U.S.-traded shares of DB, which rose 1.2%. Readers can choose to buy calls here or wait for a dip back toward the $130 region. There is potential resistance at the 200-dma near $138.70 so we're targeting a rally into the $138.00-140.00 range. The P&F chart is bullish with a $154 target.

Picked on October 01 at $130.79
Change since picked: + 1.58
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 633 thousand

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Intl. Bus. Mach.- IBM - cls: 118.36 chg: -0.67 stop: 113.90

There was no follow through on IBM's breakout over $119 yesterday. The pattern continues to look bullish especially if the stock can bounce from current levels, near what should be short-term support at $118. More conservative traders may want to wait for a rally past potential round-number resistance near $120 before entering new positions. The stock has already hit our first target in the $118-120 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: + 5.12
Earnings Date 10/17/07 (unconfirmed)
Average Daily Volume = 9.5 million

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L-3 Comm. - LLL - cls: 104.19 chg: -0.24 stop: 97.99

Some profit taking in the defense sector also weighed on LLL but for the most part LLL out performed its peers with a 0.2% decline. If you're looking for a new entry point watch for a dip into the $103.00-102.00 region. Our target is the $107.50-110.00 range. More aggressive traders may want to aim higher. The P&F chart points to a $115 target.

Picked on September 25 at $100.96
Change since picked: + 3.23
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 904 thousand

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Stryker - SYK - cls: 70.54 change: +0.41 stop: 66.49

It took more than two weeks but SYK finally managed to breakout over resistance in the $70.00-70.50 zone. We were suggesting a trigger to buy calls at $70.65 and SYK hit an intraday high of $71.30 so the play is now open. 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. SYK is due to report earnings on October 17th and we do not want to hold over the report. FYI: The P&F chart is bullish with an $83 target. Plus, we heard that part of SYK's strength today was due to another round of rumors that the company was a takeover target.

Picked on October 02 at $ 70.65
Change since picked: - 0.11
Earnings Date 10/17/07 (confirmed)
Average Daily Volume = 1.4 million

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Terex - TEX - cls: 88.20 change: -1.84 stop: 81.99

TEX suffered a 2% decline but bulls were trying hard to defend it in the $87.50-88.00 region. A dip back toward $86.50 or its 10-dma would not be a surprise. If you're looking for a new entry point watch for that test of its 10-dma. More conservative traders might want to use a higher stop loss. The P&F chart is very bullish with a $100 target. Our target is the $94-95 range.

Picked on September 25 at $ 86.50
Change since picked: + 1.70
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.8 million

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Whole Foods - WFMI - cls: 49.74 change: +1.00 stop: 44.85

Target achieved. WFMI hit an intraday high of $49.82 and closed up 2% just under resistance at the $50.00 mark. Our initial target was the $49.75-50.00 range. Unless the markets rocket higher tomorrow we would expect the $50 level to be short-term resistance and thus WFMI is due for a pull back. Watch for a dip or a bounce in the $47-48 region. Our second target is the $52.50-55.00 zone. We do not want to hold over the early November earnings report.

Picked on September 26 at $ 46.26
Change since picked: + 3.48
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 3.2 million
 

Put Updates

Cephalon - CEPH - cls: 73.56 chg: -0.01 stop: 74.25

Shares of CEPH didn't move much today and closed virtually unchanged on the session. We remain very defensive here with CEPH looking poised to breakout over resistance near $74.00. We are not suggesting new positions at this time. Wait for a new decline under $72.00 or even a new relative low under $71.00 before considering new put positions. 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. Remember that any time we play a biotech stock it should be considered higher-risk. There is always the chance that an unexpected headline about a successful or failed clinical trial or FDA decision could send the stock violently one direction or the other.

Picked on September 26 at $ 71.70
Change since picked: + 1.86
Earnings Date 11/08/07 (unconfirmed)
Average Daily Volume = 1.5 million

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IDEXX Labs - IDXX - cls: 109.28 change: +1.86 stop: 113.85

IDXX continues to show a lot of volatility. The stock traded between $107.16 and $111.30 today. Another failed rally in the $112-110 region could be used as a new entry point for puts. Our target is the $101.00-100.00 range. We do not want to hold over the late October earnings report.

Picked on September 30 at $109.59
Change since picked: - 0.31
Earnings Date 10/27/07 (unconfirmed)
Average Daily Volume = 210 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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Dow Jones Industrial Avg. - DJX - cls: 140.47 chg: -0.41 stop: n/a

We do not see any changes from our previous comments on the DJX strangle. We have less than three weeks left before October options expire. 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: + 6.04
Earnings Date 00/00/00
Average Daily Volume = million
 

Dropped Calls

None
 

Dropped Puts

Alexander & Baldwin - ALEX - cls: 51.41 chg: +0.47 stop: 52.01

We are giving up on ALEX. The stock's oversold rebound has been almost straight up since its bounce near $48.00 six days ago. Today's rally (+0.9%) is a breakout above its 200-dma. Shares of ALEX still have potential resistance near $52.00 and its 50-dma but we're suggesting an early exit now.

Picked on September 23 at $ 49.50
Change since picked: + 1.91
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 337 thousand

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Sears Holding - SHLD - cls: 135.97 chg: +5.69 stop: 132.65

The oversold bounce (or short squeeze) in SHLD continued into Tuesday's session. The stock broke out over the $130 level and soared past $135 before stalling at its 50-dma. Our stop loss was at $132.65.

Picked on September 30 at $127.20
Change since picked: + 8.77
Earnings Date 11/15/07 (unconfirmed)
Average Daily Volume = 2.3 million
 

Dropped Strangles

None
 

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