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Call Updates

Energen - EGN - close: 64.98 change: +0.75 stop: 63.45

Right on cue investors bought the dip in EGN near support. Today's relative strength (+1.1%) is even more impressive considering the market's weakness. This is a new bullish entry point to buy calls. However, we would be very cautious about opening new bullish positions with the market looking this vulnerable. Our target is the $69.50-70.00 range. The P&F chart is bullish with a $74 target.

Picked on December 18 at $ 65.32
Change since picked: - 0.34
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 700 thousand

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Express Scripts - ESRX - cls: 73.15 chg: +0.15 stop: 69.49

Shares of ESRX also ignored the market's weakness today. Traders bought the dip twice near $72.10. We suggested that readers look for a bounce near $72 as a new entry point to buy calls. This continues to look like a new entry point. More conservative traders could tighten their stop toward $70.00. Our target is the $77.50-80.00 range. The P&F chart is very bullish with a $97 target.

Picked on December 23 at $ 71.09
Change since picked: + 2.06
Earnings Date 02/07/08 (unconfirmed)
Average Daily Volume = 2.5 million

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Holly Corp. - HOC - close: 50.71 change: -0.18 stop: 49.45

HOC displayed some volatility today but overall the session was a wash. We are somewhat encouraged that investors seemed to be buying the late day dip near support around $50 again. A bounce from here can be used as a new entry point but the next challenge for the bulls is potential resistance at its 50-dma near $53.25. More conservative traders might want to consider placing their stop closer to Monday's low. Our target on HOC is the $54.75-55.00 range.

Picked on December 03 at $ 50.58 *bad tick/gap open
Change since picked: + 0.13
Earnings Date 02/12/08 (unconfirmed)
Average Daily Volume = 859 thousand

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Hologic - HOLX - close: 67.51 chg: -1.13 stop: 65.99

HOLX continued to see some profit taking. What was really negative about today was the early morning failed rally under $70.00. Bulls were buying the dip this morning. A rebound from here might be a new entry point but given the market's current short-term bearish trend we would hesitate to open new call 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.

Picked on December 18 at $ 66.22
Change since picked: + 1.29
Earnings Date 01/30/08 (unconfirmed)
Average Daily Volume = 2.8 million

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Noble Energy - NBL - close: 79.81 chg: +0.29 stop: 77.45 *new*

Today was the second time in two weeks that traders bought the dip in NBL near $79.00. The bounce back from its lows is encouraging but we would want to see a stronger rally from here before considering new call positions. More conservative traders may want to tighten their stops. Our target is the $84.50-85.00 range. The P&F chart is bullish with an $86 target. FYI: Please note that we are adjusting our stop loss to $77.45. Broken resistance near $78.00 should be support.

Picked on December 19 at $ 78.25
Change since picked: + 1.56
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 1.5 million

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Syntel Inc. - SYNT - close: 37.26 chg: -1.26 stop: 35.99 *new*

SYNT under performed the market today. Tech-related issues were some of the worst performers. SYNT was caught up in that sell-off and the stock lost 3.2%. Today's move is a breakdown below the 10-dma, 50-dma and 100-dma. Volume was above average on the decline and we seriously considered dropping the stock right here. Readers need to reevaluate how much risk they are willing to take. Conservative traders will want to consider exiting now or raising their stop loss toward $37.00 or $36.50. We are adjusting our stop to $35.99. The 200-dma could offer support near $36.50. We are not suggesting new positions.

Picked on December 24 at $ 38.75 *triggered
Change since picked: - 1.49
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 232 thousand
 

Put Updates

Allegheny Tech. - ATI - cls: 84.25 change: -2.15 stop: 90.05

Steel-related stocks were under performers. Shares of U.S.Steel (X) really lead the group lower with a 6% loss. ATI lost 2.67% and did so on decent volume. ATI is going to be testing its December lows soon. Our target is the $80.50-80.00 zone.

Picked on December 31 at $ 86.75
Change since picked: - 2.50
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 2.0 million

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Boeing - BA - close: 86.62 change: -0.84 stop: 90.15 *new*

BA seems to be pumping out press releases to stall the decline in its stock price. Today the company announced deals with airlines in Brazil, Dubai, and Vietnam. Meanwhile the stock price continues to slip. Shares have fallen back toward support near $86.00. We would strongly suggest readers take some profits right here! Seriously - we should just adjust our target from $85.55 to $86.00. After four days of declines this is the spot that BA should bounce. We are adjusting our stop loss to $90.15. We're not suggesting new put positions at this time. 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.

Picked on December 04 at $ 91.43 *triggered/gap down
Change since picked: - 4.81
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 7.0 million

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Genentech - DNA - close: 67.40 chg: +0.33 stop: 68.65*new*

The numbers for DNA show a gain on the session but the trading looked bearish. The stock produced another failed rally and another lower high. While this looks like a good move for the bears we remain very cautious here. The markets were down sharply and this would have been a great day to see DNA sell-off and break through support near $66.75. Unfortunately support held and that should tell the bears that we're still in a fight here and DNA could go either way. Aggressive traders will want to leave their stop above $70.00, which is natural resistance. We are adjusting our stop loss to $68.65. Wait for a new decline under $66.75 before considering new puts. 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.

Picked on December 16 at $ 68.43
Change since picked: - 1.03
Earnings Date 01/14/08 (confirmed)
Average Daily Volume = 4.3 million

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Essex Property - ESS - close: 95.81 chg: -1.68 stop: 100.55

ESS reversed course again and lost 1.7% on above average volume. The volume on today's move is a good sign for the bears! We would consider new put positions at this time. We have two targets. Our first target is the $90.25-90.00 range. Our second target is the $85.50-85.00 zone. We do not want to hold over the early February earnings report. FYI: Our biggest risk is a short squeeze. The most recent data puts short interest at close to 16% of the 22.9 million-share float. That is a relatively high amount of short interest and a small float. This does raise the risk for this play.

Picked on December 30 at $ 95.34
Change since picked: - 0.47
Earnings Date 02/04/08 (unconfirmed)
Average Daily Volume = 315 thousand

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Ralph Lauren Polo - RL - cls: 61.64 change: -0.15 stop: 65.05*new*

RL is still not moving very fast. The trend is negative but the lack of momentum makes us nervous. We're adjusting our stop loss to $65.05. More conservative traders might want to tighten their stop closer to $64.00. We are expecting a bounce the first time RL hits $60 and 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. Our target is the $58.00-57.00 range although odds are good the stock will see an oversold bounce near $60.00.

Picked on December 19 at $ 63.11
Change since picked: - 1.47
Earnings Date 02/07/08 (unconfirmed)
Average Daily Volume = 1.5 million

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Sears Holding - SHLD - cls: 103.00 chg: +0.95 stop: 107.75 *new*

SHLD bucked the market trend today and bounced. We've been warning readers that if SHLD was going to bounce it would be from support near $100. If you have not taken any profits yet you really need to. Our second, more aggressive target is the $92.50-90.00 but at this point we would only leave a small high-risk position in place to try and reach it. We are adjusting our stop loss to $107.75. SHLD has already hit our initial target in the $100.50-100.00 zone multiple times. We are not suggesting new bearish positions at this time. The P&F chart is bearish with a $78 target.

Picked on December 11 at $110.28
Change since picked: - 7.28
Earnings Date 10/27/07 (unconfirmed)
Average Daily Volume = 3.3 million

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Shire Plc - SHPGY - close: 66.38 change: -2.57 stop: 70.05 *new*

SHPGY gapped down this morning and ended the session with a 3.7% loss. Shares are now resting against support near $66.00. We would not find any news to account for the gap down. It might be news in a rival company. The $66 level is short-term support and SHPGY might try to fill the gap. We are adjusting our stop loss to $70.05. Conservative traders could place their stop above last week's high near 69.56. 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.

Picked on December 13 at $ 68.07 *triggered/gap down entry
Change since picked: - 1.69
Earnings Date 02/00/08 (unconfirmed)
Average Daily Volume = 956 thousand

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Vornado Realty Trust - VNO - cls: 87.68 chg: -0.27 stop: 90.05

Many of the REIT stocks were down today following some negative analyst comments and six downgrades in the industry group. Shares of VNO actually out performed most of its peers with a minor loss. This relative strength today is a warning for the bears to be on alert. We would wait and watch for a failed rally under $90.00 before considering new put positions. Our initial target is the $80.50-80.00 range. We are considering a second, more aggressive target near $75. Currently the P&F chart is bearish with a $73 target. We would not want to hold over the late February earnings report.

Picked on December 30 at $ 86.30
Change since picked: + 1.38
Earnings Date 02/27/08 (unconfirmed)
Average Daily Volume = 1.3 million
 

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: 69.61 chg: +1.65 stop: n/a

Many of the oil and energy stocks were up today following a strong gain for crude oil. ECA added 2.4% and closed at a new six-week high. Shares look poised to breakout over the $70.00 level. We don't have much time left before January options expire. We're not suggesting new strangle 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.

Picked on December 20 at $ 67.52
Change since picked: + 2.09
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million
 

Dropped Calls

Goodrich - GR - close: 69.13 change: -1.48 stop: 69.95

It looks like we should have followed our own suggestion to exit early. We've been wary of GR for a few days now and today's market sell-off prompted a bearish breakdown in GR. The stock fell through what should have been support at $70.00. There might be some technical support at the 100-dma but we wouldn't count on it. Our stop loss was at $69.95.

Picked on December 23 at $ 72.57
Change since picked: - 3.44
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 1.2 million
 

Dropped Puts

Goodrich - GR - close: 69.13 change: -1.48 stop: 69.95

It looks like we should have followed our own suggestion to exit early. We've been wary of GR for a few days now and today's market sell-off prompted a bearish breakdown in GR. The stock fell through what should have been support at $70.00. There might be some technical support at the 100-dma but we wouldn't count on it. Our stop loss was at $69.95.

Picked on December 23 at $ 72.57
Change since picked: - 3.44
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 1.2 million
 

Dropped Strangles

None
 

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