Cummins Inc. - CMI - cls: 137.94 change: +1.05 stop: 135.85*new*
Shares of CMI did not make much progress on Wednesday. The stock bounced around the $136-140 range. The bad news being that round-number resistance at $140 held again. The good news being that traders bought the dip at $136 yet again. Before you consider new positions consider your time frame. We do not want to hold over the October 25th earnings report. Our target is the $149.50-150.00 range. Please note that we're adjusting our stop loss to $135.85.
Picked on October 11 at $140.85
Diamond Offshore - DO - cls: 115.24 chg: -2.60 stop: 112.45
Crude oil hit another high intraday but this time oil and oil service stocks hit some profit taking. DO lost 2.2% and dipped under what should have been support near $115.00. A bounce from here could be used as a new bullish entry point. DO is due to report earnings on October 25th. If shares don't hit our target we'll plan to exit on October 24th at the closing bell. Our short-term target is the $124.50-125.00 range. One of our biggest concerns is that a correction in crude oil would spark some heavy profit taking in the oil service stocks. FYI: The P&F chart is bullish with a $173 target.
Picked on October 14 at $117.20
(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.)
Dow Jones Industrial Avg. - DJX - cls: 138.93 chg: -0.20 stop: n/a
Tomorrow is our last day of trading in the DJX October options. We will plan to exit at the closing bell. The DJX is a European style option and trading will cease after Thursday even though the option doesn't expire until Saturday. 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 $6.00.
Picked on September 16 at $134.43
Google Inc. - GOOG - cls: 633.48 chg: +17.48 stop: n/a
GOOG rebounded sharply, possibly due to strong earnings from rival Yahoo (YHOO). Our strategy is unchanged although if you have not yet opened positions you may want to move your strikes prices up a couple of strikes. We don't see any changes from our play description. We're expecting GOOG to see a post-earnings sell-off. The company reports tomorrow (Thursday) after the closing bell. Wall Street expects the Internet titan to earn $3.77 a share. This time we're not suggesting a strangle play. We're going to list an aggressive, directional, and highly-speculative put play. Plus, we're listing a slightly less aggressive but still speculative put-spread play.
Our first strategy was the speculative put play. Our suggested strike was the November $550 put (GOP-WY). Our estimated cost was $7.00. If you haven't opened a position yet you may want to consider the November 570s.
Our second strategy was the speculative put spread. We suggested buying the November $580 put (GOO-WP) and selling the November $530 put (GOP-WW). If you haven't opened positions yet you may want to use the November 600 and November 560 instead.
Picked on October 16 at $616.00
Intl. Bus. Mach. - IBM - cls: 115.78 chg: -3.82 stop: n/a
IBM did not see much of an after hours reaction last night but shares did see a post-earnings reaction today. The stock gapped open lower. Then, when most of the market was bouncing higher this afternoon, shares of IBM saw its sell-off pick up speed! We're not suggesting new positions. Our aggressive October strangle suggested the October $125 call (IBM-JE) and the October $110 put (IBM-VB). These expire at the end of this week. Our estimated cost was $1.20. We wanted to sell if either option hit $2.40. Our November strangle suggested the November $125 call (IBM-KE) and the November $110 put (IBM-WB). Our estimated cost was $3.00. We wanted to sell if either option hits $6.00.
Picked on October 15 at $118.03
NASDAQ 100 trust - QQQQ - cls: 53.56 chg: +0.69 stop: n/a
The NDX rebounded sharply from its intraday lows and looks poised to rally higher. Will it break through resistance near $54? We are not suggesting new positions. This is an aggressive play with October options that expire in three days. The options we suggested in our October strangle were the October $54 calls (QQQ-JB) and the October $53 puts (QQQ-VA). Our estimated cost was $0.76. We want to exit this strangle if either side hits $1.50 or higher.
Picked on October 14 at $ 53.53
Amgen Inc. - AMGN - cls: 56.41 change: -0.37 stop: 55.90
It looks like we should have exited after Monday's bearish reversal. AMGN barely paused at the $56.00 level today, which was where shares appeared to have some short-term support. The stock dove to $55.27 before bouncing back with the NASDAQ's big afternoon rebound. AMGN would have hit our stop at $55.90 around 1:00 p.m. today.
Picked on October 11 at $ 58.01
Stryker - SYK - cls: 72.19 change: -0.08 stop: 70.65
We have run out of time with SYK. It was our plan to exit today at the closing bell to avoid holding over the company's earnings report. The company has reported and EPS numbers were inline with expectations at $0.55 a share. The stock is not seeing much of an after hours reaction.
Picked on October 02 at $ 70.65