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Call Updates

Broadcom - BRCM - cls: 37.30 change: +0.70 stop: 34.95

The broad market rally allowed the semiconductor sector to rise about 1%. Shares of BRCM managed to out perform its peers with a 1.9% gain. The stock has rallied back toward significant resistance near $37.50. Friday's move combined with Thursday's intraday rebound has repaired some of the short-term technical indicators. We are still cautious on the stock and would hesitate to open new positions here but technically a move over $37.50 would be a new entry point. More conservative traders could tighten their stops even further. 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.

Suggested Options:
If you choose to buy a breakout over $37.50 we'd use the November calls. Keep in mind that we want to exit ahead of the October 23rd earnings report.

Picked on September 12 at $ 35.85
Change since picked: + 0.75
Earnings Date 10/23/07 (confirmed)
Average Daily Volume = 11.0 million

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Citigroup - C - clos: 48.30 change: +0.67 stop: 45.79

You wouldn't know it from looking at Citigroup's chart but banking stocks had a pretty good week. The BIX banking index posted five gains in a row. Shares of C did not have a bad week but most of the gains all came on Monday morning and then Friday after the jobs report. Citigroup acts like it wants to go higher but the stock is facing a trend of lower highs and resistance near $49.00. Meanwhile the rally in the BIX index stopped cold near technical resistance at its 100-dma. We are cautiously optimistic on C but readers will want to strongly consider using a tighter (higher) stop loss. 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.

Suggested Options:
We have two weeks left until C's earnings report. If you choose to open new positions we'd pick the November calls.

Picked on September 16 at $ 46.64
Change since picked: + 1.66
Earnings Date 10/19/07 (confirmed)
Average Daily Volume = 40.7 million

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Ceradyne - CRDN - cls: 78.05 change: +0.16 stop: 73.95 *new*

CRDN tagged a new two-month high on Friday but overall gains were anemic thanks to some under performance in the defense sector. Bulls can blame a sell-off in shares of Boeing (BA) for weighing on the group. The general trend in CRDN is still bullish and the stock is within striking distance of our target. Please note that we're adjusting our stop loss to $73.95. Our short-term target is the $79.50-80.00 range. The P&F chart is bullish with a $92 target.

Suggested Options:
We are not suggesting new positions in CRDN at this time.

Picked on September 25 at $ 74.61
Change since picked: + 3.40
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 653 thousand

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Deutsche Bank - DB - cls: 135.16 chg: +0.10 stop: 128.99 *new*

Shares of DB have spent the last three sessions trading sideways in a two-dollar range following the Wednesday morning gap higher. The general trend still looks like DB has turned the corner into a new bullish pattern but short-term the stock looks like it may need to correct or digest last week's gains. We would watch for a dip back to $132 or the $130 region as a new bullish entry point. Please note that we are adjusting our stop loss to $128.99. 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.

Suggested Options:
If DB provides another entry point we would use the November calls.

Picked on October 01 at $130.79
Change since picked: + 4.37
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 633 thousand

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Intl. Bus. Mach.- IBM - cls: 116.30 chg: +0.61 stop: 114.49 *new*

IBM has been under performing the tech sector all week but the stock is still holding above support near $115 and its rising 50-dma. We are inching up our stop loss to $114.49. A rebound from current levels near $116 could be used as a new bullish entry point but keep in mind that IBM has significant resistance in the $118-119-120 region. Furthermore it looks like IBM is due to report earnings in less than two weeks. 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.

Suggested Options:
We would hesitate to open new positions in IBM at this time.

Picked on August 26 at $113.24
Change since picked: + 3.06
Earnings Date 10/17/07 (unconfirmed)
Average Daily Volume = 9.5 million

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L-3 Comm. - LLL - cls: 104.74 chg: +0.33 stop: 99.49 *new*

Weakness in shares of Boeing (BA) slowed the rally in defense stocks on Friday. Yet that didn't stop shares of LLL from closing near all-time highs. LLL looks poised to breakout higher after a week's worth of consolidating sideways. Readers looking for a new entry point might want to consider buying calls on a rise past Friday's high near $105.07. An alternative entry point would be a bounce near its rising 10-dma. If you launch new plays this week we would suggest aiming for the $110 region or above. 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. Please note that we're adjusting our stop loss to $99.49.

Suggested Options:
We would suggest the November calls on LLL.

Picked on September 25 at $100.96
Change since picked: + 3.78
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 904 thousand

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Martin Marietta - MLM - cls: 142.61 chg: +1.43 stop: 134.85

MLM continued to rebound on Friday and posted a 1% gain but shares remain under potential resistance at its 100-dma. We remain positive on the stock given last week's bullish breakout from a two-month consolidation/bottoming pattern. We are still suggesting new positions here or on another dip near $140. More conservative traders might want to consider a tighter stop loss. 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.

Suggested Options:
We would suggest the November calls.

Picked on October 02 at $141.31
Change since picked: +1. 30
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 1.0 million

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Stryker - SYK - cls: 73.14 change: +0.54 stop: 68.49 *new*

Last week was very bullish for SYK. The stock finally broke out over very significant resistance in the $70.0-70.50 region. Shares of SYK hit a string of all-time highs. While we remain very bullish on SYK we're not suggesting new positions at current levels. Wait and watch for a dip into the $71-70 zone. Broken resistance should now act as new support. We are adjusting our stop loss to $68.49. 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.

Suggested Options:
We are not suggesting new positions in SYK at this time.

Picked on October 02 at $ 70.65
Change since picked: + 2.49
Earnings Date 10/17/07 (confirmed)
Average Daily Volume = 1.4 million

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Terex - TEX - cls: 86.41 change: +0.38 stop: 83.75 *new*

Thursday's intraday bounce in TEX looked like a new bullish entry point to buy calls but Friday's follow through has us worried. The stock struggled with the $87.50 level almost all day on Friday. Meanwhile last week's consolidation has put a worrisome tilt in the MACD indicator. We would either wait for another dip and bounce near $84.00, which is short-term support, or wait for a new rise past $87.55. Please note that we're adjusting our stop loss to $83.75. The P&F chart is very bullish with a $100 target. Our target is the $94-95 range although more conservative traders may want to exit near $91.00.

Suggested Options:
If TEX provides a new entry point we would suggest the November calls.

Picked on September 25 at $ 86.50
Change since picked: - 0.09
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.8 million
 

Put Updates

IDEXX Labs - IDXX - cls: 112.40 change: -0.06 stop: 113.85

Our aggressive, high-risk play in IDXX is still in jeopardy. The stock continued to bounce on Friday morning but eventually running into resistance near $113.50 before rolling over. This may prove to be the sort of failed rally we've been looking for as a new entry point for puts. However, at this time, we'd probably wait for a new decline under $111 or $110 before initiating new positions. Our target is the $101.00-100.00 range. We do not want to hold over the late October earnings report.

Suggested Options:
If you choose to open new positions we would suggest the November puts.

Picked on September 30 at $109.59
Change since picked: + 2.90
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: 140.66 chg: +0.92 stop: n/a

The rally in the DJIA pushed the October $137 calls toward $4.50 again. We have two weeks left before October options expire. If the DJIA can rally another 150-200 points then our strangle might hit our target. 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.

Suggested Options:
We are not suggesting new positions at this time.

Picked on September 16 at $134.43
Change since picked: + 6.23
Earnings Date 00/00/00
Average Daily Volume = million
 

Dropped Calls

Whole Foods - WFMI - cls: 53.20 change: +2.12 stop: 46.26

Target achieved again. The rally in WFMI continued on Friday as shares posted a 4.15% gain. The stock was able to breakout to new relative highs. Our first target was the $49.75-50.00 range. WFMI hit our second target on Friday in the $52.50-55.00 range.

Picked on September 26 at $ 46.26
Change since picked: + 6.94
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 3.2 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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