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Call Updates

Anadarko Petrol. - APC - cls: 57.61 change: -1.96 stop: 55.99

Crude oil may be trading near record highs but it is not translating into strength for oil stocks, at least not on Friday. APC did happen to hit new highs on Wednesday and Thursday this past week but hit profit taking on Friday with a 3.29% loss. Both APC and the OIX oil index have pulled back toward what should be support at its trendline of higher lows. Unfortunately, given the market's bearishness we would hesitate to open new bullish positions at this time. More conservative traders might want to tighten their stops toward $57.00 or the $56.50 levels. Our target is the $64.85-65.00 range. The P&F chart points to an $86 target.

Suggested Options:
We are not suggesting new call positions in APC at this time but if the stock does rebound and provide a new entry point we would suggest the December or January calls.

Picked on November 07 at $ 60.55
Change since picked: - 2.94
Earnings Date 11/05/07 (confirmed)
Average Daily Volume = 3.9 million

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Deere Co. - DE - close: 153.03 change: -4.88 stop: 152.75

Shares of DE lost just over 3% on Friday's market sell-off. The stock looks poised to drop toward the $150.00 level and odds are good that DE will hit our stop loss at $152.75 on Monday morning. The only reason we do not drop the stock as a play right now is that there is still a chance that markets will see a sharp oversold bounce on Monday. Otherwise, we do expect to be stopped out. We would watch the $150 level or the 50-dma as a potentially bullish entry point for new positions. DE already hit our first target near $160. Our second target is the $164.00-165.00 zone.

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

Picked on November 04 at $152.73
Change since picked: + 0.30
Earnings Date 11/21/07 (unconfirmed)
Average Daily Volume = 2.4 million

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ITT Educational Ser. - ESI - cls: 126.48 chg: -3.99 stop: 122.49

Correction: On Thursday we added ITT Educational Services as a new call play. The symbol for the stock is "ESI". We put "ITT" as the symbol, which is for ITT corp. The option symbols we listed below were for "ESI".

Shares of ESI had displayed some very impressive relative strength during the market's weakness on Wednesday and Thursday last week. Unfortunately, the stock finally gave in to profit taking during Friday's decline. We suspected that broken resistance near $127.50 would act as support for ESI but shares slipped through that level and look headed for the $125 zone. More conservative traders might want to raise their stops toward the $125 level to reduce their risk. We would wait for a bounce near $125 or a new relative high over $130 again before considering new call positions. Our target is the $139.75-140.00 range.

Suggested Options:
Wait for a new entry point. We are suggesting the December or January calls. It is up to each individual investor to decide which month and which strike price best suits their trading style and risk.

BUY CALL DEC 130 ESI-LF open interest= 67 current ask $5.60
BUY CALL DEC 135 ESI-LG open interest= 83 current ask $3.60
BUY CALL DEC 140 ESI-LH open interest=154 current ask $2.20

BUY CALL JAN 130 ESI-AF open interest=554 current ask $ 8.00
BUY CALL JAN 135 ESI-AG open interest=190 current ask $ 6.10
BUY CALL JAN 140 ESI-AH open interest=887 current ask $ 4.20

Picked on November 08 at $130.47
Change since picked: - 3.99
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 426 thousand

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Goodrich Corp. - GR - close: 70.74 change: -1.16 stop: 66.90

Shares of GR have been holding up pretty in the face of such widespread market weakness. The stock hit new highs midweek and the profit taking has been minor. Shares are holding above broken resistance and what should be support near $70.00. Look for a dip to and a bounce near $70.00 as a new bullish entry point. More conservative traders may want to raise their stop loss closer to the rising 50-dma near $67.90. Our conservative target is the $74.90-75.00 range. Our more aggressive target is the $78.00-80.00 range. The P&F chart is bullish and points to a $99 target. FYI: The last candlestick on the weekly chart does look like a short-term top. Traders need to play defensively.

Suggested Options:
If GR provides a new bullish entry point we would suggest the December calls.

Picked on November 05 at $ 71.05
Change since picked: - 0.31
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 1.0 million

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Icon Pub. Ltd. - ICLR - close: 59.75 chg: +0.16 stop: 55.90

ICLR continues to show a lot of strength. Shares hit a new two-week high on Friday while the rest of the market was falling. Volume on the current rally has been improving and Friday's volume was more than double the norm. We remain bullish here. However, if you're looking for a new entry point consider waiting for a dip back toward $58.50-58.00. More conservative traders could adjust their stop higher toward $57.00. Our target is the $63.50-65.00 range. We would consider this a higher-risk play for the simple reason that volume is so low on both the stock and the options. FYI: More aggressive traders may want to aim higher.

Suggested Options:
If ICLR provides a new entry point we would suggest the December calls.

Picked on November 06 at $ 58.79
Change since picked: + 0.94
Earnings Date 10/23/07 (confirmed)
Average Daily Volume = 107 thousand

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L-3 Comm. - LLL - cls: 111.70 chg: -1.69 stop: 107.99

LLL held up very well. Shares only gave back 1.49% during the carnage on Friday. We would expect further declines but LLL might find support near its 10-dma and the $110 level. A bounce near $110 could be used as a new bullish entry point for calls. More conservative traders might want to think about raising their stops toward $109 or $110. LLL has already hit our first target in the $114-115 range. Our second, more aggressive target is the $118.00-120.00 range. FYI: The P&F chart's bullish target has risen from $133 to $139.

Suggested Options:
We are not suggesting new positions at this time but if LLL does provide a new entry point (like a bounce near $110) then we would suggest the December or January calls.

Picked on October 29 at $108.10
Change since picked: + 3.60
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 627 thousand

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Las Vegas Sands - LVS - cls: 115.91 chg: +4.31 stop: 107.45*new*

Target achieved. LVS produced a sold rebound on Friday. The stock dipped to $108 early Friday morning and shot higher. Shares hit $118.75 before paring its gains. Our initial target was the $116.90-117.50 range. We're not suggesting new positions at this time. It looks like LVS will pull back on Monday. Wait and watch for a bounce in the $112.00-110.00 zone. We're going to raise our stop loss to $107.45. Our secondary, aggressive target is the $121.00-122.50 zone.

Suggested Options:
If LVS provides us another entry point we would suggest the December or January calls.

Picked on November 08 at $111.60
Change since picked: + 4.31
Earnings Date 11/02/07 (confirmed)
Average Daily Volume = 4.0 million

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Northrop Gruman - NOC - cls: 82.47 chg: -1.43 stop: 79.99

We have been suggesting that readers look for a pull back into the $82-83 zone as a potential entry point in NOC. The stock has complied. The intraday low on Friday was $82.11. A bounce from here can be used as a new bullish entry point to buy calls. However, we would be very cautious. It might pay off to just wait a day, may be two, to see where the market bounces and if any further weakness pulls NOC toward support near $80 and its rising 50-dma. Our target is the $89.00-90.00 range. The P&F chart shows a bullish catapult pattern with a $92 target.

Suggested Options:
If NOC provides a new bullish entry point we'd suggest the December or January calls.

Picked on November 06 at $ 84.48
Change since picked: - 2.01
Earnings Date 10/24/07 (confirmed)
Average Daily Volume = 1.4 million

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Petro Canada - PCZ - close: 57.71 change: -1.97 stop: 54.90

Until Friday shares of PCZ had been relatively resistant to the market's weakness. The stock succumbed to market weakness and lost 3.3% on Friday. At this point we would look for a bounce near $57.00 or $56.00 as a new bullish entry point to buy calls. Readers might want to consider a tighter, more conservative stop loss. Our target is the $64.50-65.00 range. FYI: We are going to point out that the daily chart's RSI indicator has a bearish divergence of lower highs versus the stock's price.

Suggested Options:
If PCZ provides a new bullish entry point we would suggest the December calls.

Picked on November 06 at $ 59.25
Change since picked: - 1.54
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 742 thousand

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PetroChina - PTR - close: 201.89 chg: + 1.64 stop: 189.49

PTR had produced a decent bounce by late Friday afternoon, up to $207.95. Unfortunately, the very late day wave of selling erased most of PTR's gains. We can probably expect more weakness on Monday. Asian markets will most likely turn lower in reaction to our weakness on Friday. Thus when trading in New York opens on Monday shares of PTR might gap lower. The stock "should" find some technical support near the 50-dma around $196 but that might be too optimistic. If PTR can bounce from here or anywhere in the $195-205 zone we would use it as a new bullish entry point to buy calls. Remember, this is a high-risk, aggressive play. PTR can make huge intraday moves and the options are expensive because of it. We have two targets. Our first target is the $219.00-220.00 range. Our second target is the $229.00-230.00 range.

Suggested Options:
If PTR bounces again we would suggest the December or January calls.

Picked on November 08 at $200.25
Change since picked: + 1.64
Earnings Date 03/08/08 (unconfirmed)
Average Daily Volume = 1.5 million

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Steel Dynamics - STLD - close: 49.58 chg: -2.31 stop: 49.25

Investors decided to sell STLD in spite of its tempting bounce on Thursday. The stock spiked lower at the open on Friday and eventually closed under what should have been round-number support at the $50.00 mark. STLD is very close to our stop loss at $49.25 and odds are very high that we will be stopped out on Monday morning. The only reason we don't drop STLD from the newsletter now is the chance that stocks might see an oversold rebound on Monday morning. We're not suggesting new positions. FYI: If you look at the chart more aggressive traders might be tempted to widen their stop under $48 or the bottom of its rising channel.

Suggested Options:
We are not suggesting new bullish plays in STLD at this time.

Picked on November 06 at $ 52.93
Change since picked: - 3.35
Earnings Date 01/23/08 (unconfirmed)
Average Daily Volume = 1.7 million

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Tesoro - TSO - close: 56.02 change: -0.28 stop: 54.59

Bulls bought the dip in TSO near $54.60 for the third time in one week. While this is encouraging we are not suggesting new positions at this time. A rally past $57.50 or its 10-dma might change our mind and could be used as a new bullish entry point. We are going to adjust our stop loss slightly to $54.49 just to give us a little bit more room. Our target is the $64.00-65.00 range.

Suggested Options:
If TSO provides a new bullish entry point we would suggest the December or January calls.

Picked on November 06 at $ 59.13
Change since picked: - 3.11
Earnings Date 01/29/08 (unconfirmed)
Average Daily Volume = 5.4 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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Borg Warner - BWA - cls: 98.32 change: -3.24 stop: n/a

It looks like it's game over for our BWA strangle play. As of October 31st it looked like the call side of our strangle would hit our target but the momentum ran out of steam. Now shares have broken down under $100. We have five days left before November strikes expire. The options we suggested for a strangle were the November $100 calls (BWA-KT) and the November $90 puts (BWA-WR). Our estimated cost was $4.50. We want to sell if either option hits $7.25 or more.

Suggested Options:
We are not suggesting new positions in BWA.

Picked on October 23 at $ 95.67
Change since picked: + 2.65
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 392 thousand

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Express Scripts - ESRX - cls: 62.22 chg: -1.82 stop: n/a

ESRX lost almost 3% on Friday and shares have broken below its 10-dma. However, in spite of the pull back the trend is still bullish. Unfortunately, we do not have positive expectations that this play is going to reach profitability. There are five days left for November options. We are no longer suggesting new strangle positions on ESRX. The options we suggested for a strangle were the November $65 calls (XTQ-KM) and the November $55 puts (XTQ-WK). Our estimated cost was $1.95. We want to sell if either option hits $3.50 or higher.

Suggested Options:
We are not suggesting positions in ESRX.

Picked on October 21 at $ 59.65
Change since picked: + 2.57
Earnings Date 10/24/07 (confirmed)
Average Daily Volume = 2.1 million

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Monster Worldwide - MNST - cls: 35.78 chg: -1.88 stop: n/a

If the stock market continues to sell-off then the put-side of our strangle might have a chance but we're not counting on it. MNST would need to drop toward $32.00 and break down under support near $35.00. We only have five days left on November strikes. We are no longer suggesting new positions. The options we suggested for our strangle were the November $40 calls (BSQ-KH) and the November $35 puts (BSQ-WG). Our estimated cost is $1.75. We want to sell if either option hits $2.95 or higher.

Suggested Options:
We are not suggesting new positions.

Picked on October 23 at $ 37.22
Change since picked: - 1.44
Earnings Date 10/24/07 (confirmed)
Average Daily Volume = 2.0 million
 

Dropped Calls

Boeing - BA - close: 94.21 change: -2.07 stop: 94.85

The market's sell-off finally pushed shares of BA down through support near $95.00 and its 200-dma. The stock hit our stop loss at $94.85 and shares now look poised to test the October lows near $92.50. The MACD on the daily chart is very close to a new sell signal. We would keep an eye on BA for a bounce near support around $90.00 as a potentially bullish entry point.

Picked on October 29 at $ 97.25
Change since picked: - 3.04
Earnings Date 10/24/07 (confirmed)
Average Daily Volume = 6.3 million

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Kennametal - KMT - close: 87.72 change: -1.78 stop: 87.49

We are suggesting an early exit in KMT. The stock has done a decent job of holding on to support near $87.50-88.00 but the technicals are turning negative and shares have a bearish trend of lower highs over the past couple of weeks. Odds are good that KMT will dip toward support near $85.00 and its 50-dma or even fill the gap near $82.50. We would rather exit now and just wait to see where it bounces down the road. FYI: Don't forget that KMT has a 2-for-1 split coming in December.

Picked on October 31 at $ 91.21
Change since picked: - 3.49
Earnings Date 10/24/07 (confirmed)
Average Daily Volume = 404 million

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Research In Motion - RIMM - cls: 113.22 chg: -11.26 stop: 115.49

Ouch! Shares of RIMM just got crushed two days in a row. Thursday's intraday bounce from its lows looked like an aggressive entry point to buy the dip. Evidently the tech-sector selling wasn't over yet. RIMM gapped down on Friday at $118.44 and plunged to $111.76, hitting our stop loss at $115.49.

Picked on November 08 at $124.48
Change since picked: -11.26
Earnings Date 12/20/07 (unconfirmed)
Average Daily Volume = 21.5 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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