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Call Updates

Energen - EGN - close: 64.88 change: -0.24 stop: 62.95

Unfortunately, EGN provided more of the same on Friday. We've been cautioning readers that the stock looked headed lower toward $65 or $64. The close under what should have been round-number, psychological support near $65.00 is bearish. Plus, three days of declines is weighing on the short-term technical oscillators turning them bearish. EGN should find support at its rising 50-dma and the bottom of its rising bullish channel both near $63.80. Wait for a bounce near $64.00 before considering new bullish positions. More conservative traders could tighten their stops but even though the 50-dma should be strong support we don't want to be immediately under it. EGN needs a little bit of room to maneuver. Our target is the $69.50-70.00 range. The P&F chart is bullish with a $74 target.

Suggested Options:
If EGN provides a new bullish entry point we would suggest the January or February calls. FYI: January strikes expire in three weeks.

Picked on December 18 at $ 65.32
Change since picked: - 0.44
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 700 thousand

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Express Scripts - ESRX - cls: 72.93 chg: -0.57 stop: 69.49*new*

ESRX is still looking pretty good. After a four-day sprint higher it is not a surprise to see a couple of days of rest. Our bias for next week is flat to down. If you're looking for an entry point in ESRX we would wait and watch for a dip or a bounce near $72.00 or the $70.00 level. Either should be short-term support with $70.00 being stronger support. We are adjusting our stop loss to $69.49. Our target is the $77.50-80.00 range. The P&F chart is very bullish with a $97 target.

Suggested Options:
If ESRX provides a new entry point we would suggest the January or February calls. FYI: January strikes expire in three weeks.

Picked on December 23 at $ 71.09
Change since picked: + 1.84
Earnings Date 02/07/08 (unconfirmed)
Average Daily Volume = 2.5 million

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Goodrich - GR - close: 70.95 change: -1.49 stop: 69.95

Traders need to turn more cautious on GR. The stock under performed the market and its peers on Friday with a 2% loss. Furthermore the stock broke down under its 50-dma and produced what appears to be a bearish engulfing candlestick pattern. Given our outlook for next week being flat to down more conservative traders may want to exit early right now. We would still expect to see a bounce from support near $70.00 but Friday's performance is a little ominous. The DFI defense index also looks vulnerable to more selling pressure. We would want to see a convincing bounce in GR before considering new bullish positions. Our target is the $77.50-80.00 range. The P&F chart is bullish with a $99 target.

Suggested Options:
We are not suggesting new positions at this time but look for support near $70.00.

Picked on December 23 at $ 72.57
Change since picked: - 1.62
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 1.2 million

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Holly Corp. - HOC - close: 50.34 change: -0.62 stop: 48.95*new*

HOC is still testing what should be support near $50.00. It's common for broken resistance to become new support and we've been warning readers for days now that HOC looked like it was headed back toward the $50 region. A bounce from here could be used as a new bullish entry point. Please note that we're adjusting our stop loss to $48.95. More conservative traders could try and get by with a tighter stop. Our target on HOC is the $54.75-55.00 range. FYI: It does look like HOC has put in a bottom and the P&F chart now points to a $65 target. More aggressive traders may want to aim for the $58-60 zone.

Suggested Options:
If HOC bounces from here we would suggest the January or February calls. FYI: January strikes expire in three weeks.

Picked on December 03 at $ 50.58 *bad tick/gap open
Change since picked: - 0.24
Earnings Date 02/12/08 (unconfirmed)
Average Daily Volume = 859 thousand

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Hologic - HOLX - close: 69.65 chg: -0.17 stop: 65.99

We have some good news on HOLX. Friday's session failed to see any real follow through on Thursday's bearish reversal pattern. The stock continues to look short-term oversold and could see more profit taking but any profit taking may be more mild than previously expected. Right now we would watch for HOLX to find short-term support at the rising 10-dma or the $68.00 level. At this time we're not suggesting new bullish positions. HOLX has already hit our initial target in the $69.50-70.00 range. Our more aggressive target is the $74.00-75.00 range. FYI: The P&F chart is bullish and points to an $87 target.

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

Picked on December 18 at $ 66.22
Change since picked: + 3.43
Earnings Date 01/30/08 (unconfirmed)
Average Daily Volume = 2.8 million

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Noble Energy - NBL - close: 80.66 chg: +0.11 stop: 75.75

Friday was a quiet session for NBL. The stock spent the day trading sideways. The trend is still bullish and if shares hit any profit taking we would watch for the rising 10-dma to be short-term support. More conservative traders may want to tighten their stops. Another bounce near $80.00 could be used as a bullish entry point. Our target is the $84.50-85.00 range. The P&F chart is bullish with an $86 target.

Suggested Options:
If NBL provides a new entry point we would suggest the January or February calls. FYI: January strikes expire in three weeks.

Picked on December 19 at $ 78.25
Change since picked: + 2.41
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 1.5 million

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Syntel Inc. - SYNT - close: 39.04 chg: +0.78 stop: 35.75

SYNT displayed some relative strength on Friday. Traders bought the dip near $38 again and SYNT added 2% by the closing bell. This looks like another bullish entry point to buy calls. Our target is the $44.00-45.00 range. The P&F chart has recently produced a new buy signal with a $50 target.

Suggested Options:
We are suggesting the January or February calls. However, we would not want to hold over the late January earnings report.

BUY CALL JAN 40.00 DUB-AH open interest=73 current ask $1.00

BUY CALL FEB 40.00 DUB-BH open interest= 6 current ask $2.30

Picked on December 24 at $ 38.75 *triggered
Change since picked: + 0.29
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 232 thousand
 

Put Updates

Boeing - BA - close: 88.25 change: -0.63 stop: 91.43

Shares of BA continue to slip. Friday morning brought news that BA announced a five-month delay for delivery of its new Dreamliner jets to India. They were expected in September 2008 and now they won't be delivered until February 2009. Investors have been concerned about delays for this product line for months. The stock is in a bearish decline of lower lows and lower highs following a huge (bearish) double top in mid 2007. The recent failed rally near $90 looks like a new entry point to buy puts. We have two targets. Our first target is the $85.55-85.00 range. Our second target is the $81.50-80.00 zone. The P&F chart is bearish with a $75 target.

Suggested Options:
We are suggesting the January or February puts. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk. FYI: January strikes expire in three weeks.

BUY PUT JAN 90.00 BA-MR open interest=30158 current ask $3.10
BUY PUT JAN 85.00 BA-MQ open interest=15592 current ask $0.95

BUY PUT FEB 85.00 BA-NQ open interest= 7325 current ask $2.35

Picked on December 04 at $ 91.43 *triggered/gap down
Change since picked: - 3.18
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 7.0 million

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Genentech - DNA - close: 67.51 chg: +0.38 stop: 70.05 *new*

We remain very dissatisfied with DNA's performance. The BTK biotech sector index continues to look bearish especially after Thursday's breakdown under the 200-dma. Yet shares of DNA continue to trade sideways. We came close to just dropping DNA as a bearish candidate today but decided that the short-term trend is still bearish with a pattern of lower highs and as long as DNA is under the 10-dma we're okay. We are dropping our stop loss to $70.05 and more conservative traders may want to adjust theirs even lower. At this point we would wait for a decline under $66.75 before considering new bearish positions. Our DNA target is the $62.50-60.00 range. The main hurdle for the bear is potential support near the early December lows. DNA's P&F chart is very bearish with a $54 target. FYI: Any time we play a biotech stock it should be considered high risk. You never know when news will come out about some successful or failed clinical trial or some FDA decision that could send the stock gapping one way or the other.

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

Picked on December 16 at $ 68.43
Change since picked: - 0.92
Earnings Date 01/10/08 (unconfirmed)
Average Daily Volume = 4.3 million

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Garmin - GRMN - close: 99.17 chg: -1.65 stop: 105.05 *new*

Bears still appear to be in control with GRMN. They stopped the advance near resistance around $103.50. Now share are slipping again. Late Friday afternoon GRMN offered another entry point for puts with the dips under $99.00. We are adjusting our stop loss to $105.05. More conservative traders could slip theirs closer to $104. This remains a very high risk play due to the stock's volatility. A week ago GRMN exceeded our initial target in the $96.00-95.00 zone. Our second more aggressive target is the $91.00-90.00 range. The P&F chart is bearish with an $86 target but the P&F chart also shows potential support near $91.

Suggested Options:
We are suggesting the January or February puts. FYI: January strikes expire in three weeks.

Picked on December 11 at $104.78
Change since picked: - 5.61
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 6.2 million

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Ralph Lauren Polo - RL - cls: 61.76 change: +0.31 stop: 66.26

We don't have anything new to say about RL. Investors are still selling the mini-bounces the stock produces. Shares do look short-term oversold but broken support near $63.50-64.00 should be overhead resistance. Readers may want to wait for a new failed rally pattern to appear before initiating new positions. Actually, since we are expecting a bounce the first time RL hits $60 readers could wait until after this bounce rolls over before considering new positions. The Point & Figure chart produced a quadruple bottom breakdown sell signal and points to a $55 target. We were suggesting puts with RL under $64.00. Our target is the $58.00-57.00 range although odds are good the stock will see an oversold bounce near $60.00.

Suggested Options:
We would still consider the January or February puts. FYI: January strikes expire in three weeks.

Picked on December 19 at $ 63.11
Change since picked: - 1.35
Earnings Date 02/07/08 (unconfirmed)
Average Daily Volume = 1.5 million

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Sears Holding - SHLD - cls: 102.10 chg: +0.94 stop: 110.55

We do not see any changes from our previous comments on SHLD. The stock continues to look very bearish with a consistently bearish trend of lower highs. However, shares are short-term oversold after a three-week decline and they are resting on round-number, psychological support at $100. If there was going to be an oversold bounce it should be here. The positive sign for the bears is that SHLD keeps trying to rebound and investors keep selling it. SHLD has already hit our initial target in the $100.50-100.00 zone. We are not suggesting new bearish positions at this time. Our second more-aggressive target is the $92.50-90.00 zone. The P&F chart is bearish with a $78 target.

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

Picked on December 11 at $110.28
Change since picked: - 8.18
Earnings Date 10/27/07 (unconfirmed)
Average Daily Volume = 3.3 million

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Shire Plc - SHPGY - close: 68.83 change: +0.15 stop: 70.26*new*

If you look at the technical indicators on SHPGY you're going to get a lot of mixed signals. Meanwhile looking at the chart we can see that shares are in a bearish channel. The stock has found resistance right where it should at the top of its gap down and near a cloud of overhead moving averages. We're actually adjusting our stop loss to $70.26, which is just above the 50-dma. We would consider new put positions here or on a drop below $68.00. Our initial target is the $65.25-65.00 range and we have decided to add a second, more aggressive target in the $62.00-60.00 zone. The Point & Figure chart is bearish with a $54 target. FYI: Any time we play a biotech or even a drug stock we're dealing with a higher-risk situation. We are at risk that some FDA decision or some clinical trial news could send the stock gapping one direction or the other.

Suggested Options:
We are suggesting the January or February puts. FYI: January strikes expire in three weeks.

BUY PUT JAN 70.00 UGH-MN open interest=5548 current ask $2.85
BUY PUT JAN 67.50 UGH-MU open interest=1500 current ask $1.65
BUY PUT JAN 65.00 UGH-MM open interest=1144 current ask $0.95

BUY PUT FEB 65.00 UGH-NM open interest= 32 current ask $1.95

Picked on December 13 at $ 68.07 *triggered/gap down entry
Change since picked: + 0.76
Earnings Date 02/00/08 (unconfirmed)
Average Daily Volume = 956 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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Encana - ECA - close: 69.21 chg: +0.77 stop: n/a

ECA displayed some relative strength on Friday but we need to see more momentum. We only have three weeks left before the January options expire. We're not suggesting new positions at this time. The options we listed for the strangle were the January $75 calls (ECA-AO) and the January $60 puts (ECA-ML). Our estimated cost is $0.65. We want to sell if either option hits $1.85 or higher. FYI: The P&F chart is bullish with a $92 target.

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

Picked on December 20 at $ 67.52
Change since picked: + 1.69
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million
 

Dropped Calls

Cameron - CAM - close: 98.33 chg: +0.63 stop: 89.90

Target achieved. CAM gave us a little holiday bonus with a spike higher on Friday morning. Shares hit $99.14 before settling sideways into the weekend. Our target was the $99.00-100.00 range. The trend in CAM continues to look bullish and we'll keep an eye on it for another entry point. Right now we'd be watching a dip back toward the rising 100-dma or a breakout over resistance near $100. FYI: CAM is due to split 2-for-1 as of Monday.

Picked on December 18 at $ 91.85
Change since picked: + 6.48
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 2.1 million

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ConocoPhillips - COP - close: 89.13 chg: +0.48 stop: 83.85

Target achieved. Shares of COP also rallied higher on Friday morning. The stock hit $89.89 before paring its gains. Our target was the $89.50-90.00 range. The $90 level does look like significant resistance and after a strong two-week run up shares of COP are probably due for a correction. We remain bullish on COP and would watch for a dip and bounce near $85.00 or a breakout over $90.00 as a potential entry point for new call positions.

Picked on December 20 at $ 85.23
Change since picked: + 3.90
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 11.4 million

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Foster Wheeler - FWLT - cls: 156.27 chg: -0.63 stop: 154.99

We have been stopped out of FWLT at $154.99. The intraday low was $152.73. We're still bullish on FWLT but this was probably just some end of year profit taking. The low for 2007 was $46.50. We would keep FWLT on our watch list for another entry point. It's certainly possible that FWLT could see more profit taking after the turn of the year. Look for support (and a bounce) near $150 or a breakout to new highs as potential entry points.

Picked on December 26 at $162.00 *triggered
Change since picked: - 5.73
Earnings Date 02/27/08 (unconfirmed)
Average Daily Volume = 1.7 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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