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Call Updates

Broadcom - BRCM - cls: 36.26 change: -0.70 stop: 34.45

A negative earnings warning from Micron sent the semiconductor sector lower. The SOX index lost just over 2%. Shares of BRCM plunged 1.89% but managed to hold short-term support near $36.00. We have been growing more defensive on BRCM lately and today's close under its 10-dma is negative. Please note that we're adjusting our stop loss to $34.95. We're not suggesting new positions at this time. Our BRCM target is the $39.85-40.00 range. The Point & Figure chart is bullish with a $49 target. We do not want to hold over the October 23rd earnings report.

Picked on September 12 at $ 35.85
Change since picked: + 0.41
Earnings Date 10/23/07 (confirmed)
Average Daily Volume = 11.0 million

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Citigroup - C - clos: 47.89 change: +0.03 stop: 45.79

An earnings warning from DB kept the brakes on any sort of rally attempt in the financials. C just barely closed in the green after failing to breakout past Monday's high. More conservative traders may want to tighten their stops toward $47.00. 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: + 1.25
Earnings Date 10/19/07 (confirmed)
Average Daily Volume = 40.7 million

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Ceradyne - CRDN - cls: 76.36 change: -0.81 stop: 72.45 *new*

CRDN's intraday bounce near $75 and its rising 10-dma looks like a potential entry point to buy calls again. We are raising our stop loss to $72.45. 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: + 1.75
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 653 thousand

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Deutsche Bank - DB - cls: 134.07 chg: +1.70 stop: 126.99 *new*

We are impressed. DB issued an earnings warning and announced it will write off $3.12 billion in losses from the sub-prime mess here in the U.S. What does the stock do? Shares gap open higher and hit $135.98 before paring their gains to close up 1.2%. Investors must be focusing on DB's positive comments that their more stable businesses were doing well. We are adjusting our stop loss to $126.99. 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: + 3.28
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 633 thousand

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Intl. Bus. Mach.- IBM - cls: 116.40 chg: -1.96 stop: 113.90

Tech stocks felt the brunt of the profit taking today. IBM lost 1.6% and the technical picture has taken a sharp turn lower the last couple of days. We're not suggesting new positions at this time. Watch for potential support near $116 and then again near $115 with its 50-dma. 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: + 3.16
Earnings Date 10/17/07 (unconfirmed)
Average Daily Volume = 9.5 million

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L-3 Comm. - LLL - cls: 104.10 chg: -0.09 stop: 97.99

LLL is holding up relatively well. We would not be surprised to see a pull back toward $102.50 or its 10-dma. 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: + 3.14
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 904 thousand

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Martin Marietta - MLM - cls: 141.50 chg: +0.19 stop: 134.85

MLM rallied to its 100-dma just over $144 and then turned south. Fortunately, traders were buying the dip near $140 making today's session another entry point for bullish positions. If the major indices continue lower again tomorrow watch for MLM to find support in the $137-138 zone. The P&F chart now points to a $170 target. We have two targets. Our first target is the $149.00-150.00 range. Our second target is the $157.00-160.00 zone. We do not want to hold over the late October earnings report.

Picked on October 02 at $141.31
Change since picked: + 0.19
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 1.0 million

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Stryker - SYK - cls: 71.79 change: +1.25 stop: 66.49

SYK ignored the market's weakness and powered to another new all-time high. Given SYK's five-month consolidation this definitely looks like the beginning of a new leg higher. Our target is the $74.90-75.00 range. It would be tempting to 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.

Picked on October 02 at $ 70.65
Change since picked: + 1.14
Earnings Date 10/17/07 (confirmed)
Average Daily Volume = 1.4 million

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Terex - TEX - cls: 85.28 change: -2.92 stop: 82.49 *new*

Ouch! The profit taking in TEX today was painful. Shares lost 3.3% and broke down under its 10-dma. The intraday dip under $85 was also bearish. Watch for a bounce from here (maybe back over $86.00) as a new entry point to buy calls. We are raising the stop loss to $82.49. 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: - 1.22
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.8 million

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Whole Foods - WFMI - cls: 50.31 change: +0.57 stop: 44.85

The rally in WFMI continues. A raised price target from one analyst firm may have helped the bulls today. The close over round-number resistance at $50 is another bullish signal but the stock does look a little short-term overbought. WFMI has already hit our initial target in 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.

Picked on September 26 at $ 46.26
Change since picked: + 4.05
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 3.2 million
 

Put Updates

IDEXX Labs - IDXX - cls: 110.49 change: +1.11 stop: 113.85

We are starting to see an oversold bounce in IDXX. The bounce back over $110 is a caution sign for the bears. Watch for a failed rally near $112.00-112.50 as a potential entry point for new put positions. 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: + 0.90
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: 139.68 chg: -0.79 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: + 5.25
Earnings Date 00/00/00
Average Daily Volume = million
 

Dropped Calls

None
 

Dropped Puts

Cephalon - CEPH - cls: 74.75 chg: +1.19 stop: 74.25

We have been growing more defensive on CEPH the last few days. Something happened midday around 11:30 this morning that sent shares of CEPH rocketing higher through resistance near $74.00. Our stop loss was at $74.25. We would keep an eye on shares as it tries to breakout over resistance near $75 and its 200-dma.

Picked on September 26 at $ 71.70
Change since picked: + 3.05
Earnings Date 11/08/07 (unconfirmed)
Average Daily Volume = 1.5 million
 

Dropped Strangles

None
 

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