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Call Updates

Amgen Inc. - AMGN - cls: 57.83 change: +0.21 stop: 54.90

AMGN displayed some relative strength today and broke through resistance near $58.00 on an intraday basis. Our suggested trigger to buy calls was at $58.01 so the play is now open. However, if the major averages continue to sink tomorrow then AMGN might see a little profit taking too. Nimble traders might try buying a dip or a bounce near AMGN's 10-dma around $56.60. Our target is the $64.00-65.00 range, which might be a little too aggressive given our time frame. AMGN is due to report earnings around October 25th and we don't want to hold over the report. It's also worth noting that AMGN's P&F chart is still bearish and it will take a breakout over $60.00 to change it back into a bullish pattern. We also see potential resistance at AMGN's 200-dma near $59.30.

Picked on October 11 at $ 58.01
Change since picked: - 0.18
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 11.7 million

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Biogen Idec - BIIB - cls: 67.12 chg: -0.29 stop: 64.95

Shares of BIIB turned south a lot sooner than the NASDAQ, which might be a warning signal. We would wait and watch for a bounce near $66 or $65 before considering new positions at this time. There is potential resistance near $70.00 but we're going to aim for the $72.40-72.50 range. The P&F chart points to an $86 target. Part of our challenge is time. We do not want to hold over the October 23rd earnings report. FYI: There were a lot of press releases and news articles out related to BIIB today but nothing that seemed to move the stock price. Here's a list:
http://finance.yahoo.com/q/h?s=biib

Picked on October 07 at $ 67.63
Change since picked: - 0.51
Earnings Date 10/23/07 (confirmed)
Average Daily Volume = 4.4 million

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Citigroup - C - clos: 48.32 change: +1.18 stop: 45.79

Citigroup displayed relative strength and surged higher this morning. The rally failed to breakout over short-term resistance near $49.00 but the stock closed up 2.5% on strong volume, which is bullish. Considering the market weakness today we would still hesitate to open new positions at this time. We are seriously considering a higher stop loss at $46.74. 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: + 1.68
Earnings Date 10/19/07 (confirmed)
Average Daily Volume = 40.7 million

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Cummins Inc. - CMI - cls: 136.89 change: -2.15 stop: 134.45

Warning! Our play on CMI is now open but we may have been triggered on a bearish reversal/failed rally pattern. The stock surged higher this morning and broke out past resistance to hit new highs. The intraday high was $143.45. Our suggested trigger to buy calls was at $140.85. Unfortunately, the markets turned south and traders rushed to lock in profits on all the recent market winners, CMI included. If there is any follow through on today's market-wide profit taking then we would expect CMI to hit our suggested stop loss at $134.45. We warned readers that this was an aggressive play due to CMI's volatility and our time frame.

Picked on October 11 at $140.85
Change since picked: - 3.96
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 2.0 million

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Ceradyne - CRDN - cls: 75.32 change: -2.58 stop: 73.95

CRDN was not exempt from the 2:00 p.m. sell-off in the stock market. Shares plunged from $78 to under $75.00 and produced a very bearish engulfing candlestick pattern. We're not suggesting new positions and readers might want to tighten their stops toward today's low. 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: + 0.71
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 653 thousand

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Deutsche Bank - DB - cls: 131.70 chg: -1.05 stop: 128.99

There should be no surprises here. We warned readers that DB looked like it was still consolidating lower. Today's close under its 10-dma is bearish but we would watch for a dip and bounce near $130 as a potential bullish entry point to consider buying calls again. 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: + 0.91
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 633 thousand

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Intl. Bus. Mach.- IBM - cls: 118.05 chg: -0.57 stop: 114.49

Thursday started out positive for IBM. The stock had finally managed to break through significant resistance in the $119-120 range. The stock hit an intraday high and multi-year high of $121.46. Unfortunately, IBM gave it all back during the market's afternoon sell-off. We're not suggesting new positions and readers will want to strongly consider exiting early now. We're not suggesting new positions. Today's move looks like a bull trap pattern. 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: + 4.81
Earnings Date 10/17/07 (unconfirmed)
Average Daily Volume = 9.5 million

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Kohl's - KSS - close: 61.11 change: +0.00 stop: 57.90

KSS reported September same-store sales numbers today. Analysts were expecting a decline of 3.4%. KSS reported a decline of 3.2%, which may account for the early morning spike higher. Sadly the rally quickly wilted after it reached technical resistance near its 100-dma and the $64.00 level. Our suggested trigger to buy calls was at $62.01 so the play is now open. Unfortunately, the move today looks like a bull trap given the bearish failed rally pattern. We are not suggesting new positions with KSS under $62.00. Readers will want to strongly consider a tighter stop loss to reduce their exposure. We do not want to hold over the November earnings report.

Picked on October 11 at $ 62.01
Change since picked: - 0.90
Earnings Date 11/15/07 (unconfirmed)
Average Daily Volume = 5.9 million

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Lehman Brothers - LEH - close: 64.14 change: -0.35 stop: 61.99

It's the same story but different stock with LEH. The stock rallied this morning only to see the rally reverse into a bearish sell-off this afternoon. The stock's breakout over $65.00 was bullish and shares hit our suggested trigger to buy calls at $65.25. The play is now open but we are not suggesting positions with LEH under $65.00. The move looks like a bull trap type of pattern. Our target is the $69.85-70.00 range. More aggressive traders may want to aim higher and shoot for the 200-dma.

Picked on October 11 at $ 65.25
Change since picked: - 1.11
Earnings Date 12/13/07 (unconfirmed)
Average Daily Volume = 15.8 million

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Stryker - SYK - cls: 73.13 change: -0.20 stop: 69.45 *new*

We have to issue a reversal warning on SYK. The stock gapped open higher this morning (possibly on positive comments from Jim Cramer last night) but the early morning rally failed at $74.67. Our target is the $74.90-75.00 range. SYK gave back all today's gains by the closing bell. Readers will want to seriously consider an early exit to lock in some time of gain just in case the markets continue to see more profit taking tomorrow. We are adjusting our stop loss to $69.45. 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: + 2.48
Earnings Date 10/17/07 (confirmed)
Average Daily Volume = 1.4 million

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Terex - TEX - cls: 86.88 change: -1.58 stop: 83.75

TEX did not escape the market's afternoon sell-off. Shares slipped back toward very short-term support around $86.00-86.50. Readers might want to turn defensive here and adjust their stops. TEX may be in the process of building a bearish double-top pattern if you look at the late September and October 9th peaks. We're not suggesting new positions at this time. 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.

Picked on September 25 at $ 86.50
Change since picked: + 0.38
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.8 million
 

Put Updates

None
 

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: 140.15 chg: -0.64 stop: n/a

If there is any market follow through on this afternoon's sell-off then this strangle play may be dead. Readers will want to consider an early exit now to salvage some of their capital. The October $137 calls hit an intraday high of $5.15 and are currently trading at $3.40bid/$3.80ask. 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: + 5.72
Earnings Date 00/00/00
Average Daily Volume = million
 

Dropped Calls

Burlington N.SantaFe- BNI - cls: 83.88 chg: -1.68 stop: 83.90

Shares of BNI were downgraded by Lehman Brothers this morning. This negative analyst news helped pull BNI under support near $85.00 and its 100-dma. Then when the markets turned south this afternoon shares of BNI sank past additional support near $84.00 and its 200-dma. The stock hit our stop loss at $83.90 closing the play.

Picked on October 09 at $ 86.50
Change since picked: - 2.62
Earnings Date 10/23/07 (confirmed)
Average Daily Volume = 4.3 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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