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Call Updates

Covance - CVD - cls: 92.70 change: +2.61 stop: 84.99

We are kicking ourselves for not making our alternative entry point at $90.50 an official entry point. Over weekend we suggested buying a dip in the $88-87 range and mentioned that momentum traders may want to buy a breakout over $90.00 if the stock doesn't dip. We didn't officially state that was a newsletter entry so we're not going to take it. Now that CVD has broken resistance at $90.00 this level should be new support. We are now suggesting that readers buy a dip into the $90.50-90.00 zone. We are raising our stop loss to $86.99. We are setting two targets. Our first conservative target is $94.50-95.00. Our second, more aggressive target is the $99.00-100.00 range.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/23/08 (unconfirmed)
Average Daily Volume = 395 thousand

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Encana - ECA - close: 68.89 change: -0.71 stop: 67.75

Crude oil dipped about 2.7% and the oil stocks followed it lower. Shares of ECA came close to hitting our stop loss but bulls managed to defend it near short-term support near $68.00. A bounce from here can be used as a new bullish entry point to buy calls but more conservative traders may want to see a new rise over $70.00 before initiating positions. Our short-term target is the $74.85-75.00 range. FYI: The P&F chart is bullish with a $92 target.

Picked on January 03 at $ 70.10 *triggered
Change since picked: - 1.21
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million

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Hess Corp. - HES - cls: 92.92 chg: -0.43 stop: 89.90

HES provided multiple opportunities to buy a dip into our suggested entry zone of $92.00-90.00. It was encouraging to see buyers putting a floor under the stock near $91.50. Now that the play is open our target is the $99.00-100.00 range. We do not want to hold over the late January earnings report.

Picked on January 07 at $ 92.00 *triggered
Change since picked: + 0.92
Earnings Date 01/30/08 (unconfirmed)
Average Daily Volume = 4.5 million

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Hologic - HOLX - close: 70.51 chg: -0.61 stop: 66.45

HOLX experienced some profit taking today but traders bought the dip at $68.74. A bounce from here could be used as a new bullish entry point but if you're launching new plays now we'd suggest a tighter stop near $68 or today's low. 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. FYI: HOLX is due to present at an investor conference in San Francisco on January 9th.

Picked on December 18 at $ 66.22
Change since picked: + 4.29
Earnings Date 01/30/08 (unconfirmed)
Average Daily Volume = 2.8 million

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Humana Inc. - HUM - cls: 81.56 chg: +2.09 stop: 75.99

There was not much of a dip in HUM today. Investors were running into the healthcare-related stocks as safe haven plays. Traders bought HUM near $79.00 before sending it to a new all-time high over the October 2007 peak. This is a bullish move and more aggressive traders may want to buy it now. We are still wagering on a pull back. However, we're adjusting our suggested entry zone to $79.00-78.00. Our initial target is the $84.50-85.00 range. More aggressive traders may want to aim higher. The Point & Figure chart is bullish with a $96 target.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/04/08 (unconfirmed)
Average Daily Volume = 1.3 million

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Inverness Medical - IMA - cls: 57.89 chg: +0.37 stop: 54.49

Investors were hungry for biotech and drug stocks today. Both sectors out performed the market. Shares of IMA inched closer to a breakout over resistance near $58.00 and its 50-dma. We do not see any changes from our previous comments. We're suggesting two alternative entry points. One entry point is $58.15 should IMA breakout. Our second entry point would be a pull back into the $56.00-55.00 zone. We'll start the play with a stop loss at $54.49, just under Friday's low. Our target is the $64.00-65.00 range near its highs. FYI: IMA will be presenting at the huge healthcare/drug/biotech conference this coming week.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 857 thousand

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Noble Energy - NBL - close: 79.02 chg: +0.19 stop: 77.45

A sharp dip in crude oil futures weighed on the oil stocks. Shares of NBL dipped to $77.83 but managed to bounce back and close in the green. The $78.00 level is supposed to be support so a bounce from here can be used as a new bullish entry point. Our target is the $84.50-85.00 range. The P&F chart is bullish with an $86 target. FYI: The short-term technicals have turned bearish. I suggest waiting on the bounce to appear.

Picked on December 19 at $ 78.25
Change since picked: + 0.77
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 1.5 million
 

Put Updates

Air Methods - AIRM - close: 47.54 chg: -1.23 stop: 51.50

AIRM hit our trigger for real this time. The stock broke down under support at $48.00 and closed with a 2.6% loss. We were suggesting a trigger to buy puts at $47.95. Our target is the $44.10-44.00 range since the $44 level should be support. More aggressive traders may want to aim for the 200-dma near $41-42. The P&F chart is bearish with a $39 target. Something to be aware of is AIRM's high degree of short interest. The most recent data put short interest at almost 16% of the stock's very small 10.6 million-share float. We normally don't play stocks that have an average daily volume under 250,000 shares. AIRM's volume is under that amount. The combination of low volume and high short interest probably makes this a higher-risk, more aggressive play.

Picked on January 04 at $ 47.95 *bad tick-entry
Change since picked: - 0.41
Earnings Date 03/06/08 (unconfirmed)
Average Daily Volume = 149 thousand

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Boeing - BA - close: 82.87 change: -2.95 stop: 88.05 *new*

Target exceeded! BA continues to under perform. The stock broke down under what should have been support near $85.00 on big volume. Shares lost 3.4% and closed near its lows for the session. Our initial target was the $85.55-85.00 zone. Today's low was $82.17. Our second more aggressive target is the $81.50-80.00 range. We are not suggesting new positions at this time. BA is oversold and could bounce but the stock should find new resistance in the $85.00-86.00 region. We are adjusting our stop loss to $88.05. We highly recommend that you do some profit taking and take some money off the table if you have not already. The P&F chart is bearish with a $75 target.

Picked on December 04 at $ 91.43 *triggered/gap down
Change since picked: - 8.56
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 7.0 million

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Essex Property - ESS - close: 89.48 chg: +1.74 stop: 95.34

ESS produced an oversold bounce today. Shares hit a low of $86.68 before bouncing back. We would not be surprised to see ESS try and fill the gap from Friday morning. We're not suggesting new positions at this time. The stock has already exceeded our first target in the $90.25-90.00 range. Our second target is the $85.50-85.00 zone. If you have not done any profit taking yet we suggest you do so. We do not want to hold over the early February earnings report, which the company just confirmed will occur on February 6th. 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: - 5.86
Earnings Date 02/06/08 (confirmed)
Average Daily Volume = 315 thousand

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Shire Plc - SHPGY - close: 65.43 change: -0.14 stop: 70.05

SHPGY continues to test round-number support at the $65.00 level. The stock under performed its peers in the drug and biotech industry groups. While this relative weakness is encouraging we'd still expect a bounce from here. We are not suggesting new positions in SHPGY at this time. The $68.00 level should be overhead resistance. The stock has already hit our 65.25-65.00 target zone. Our second, more aggressive target is 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: - 2.64
Earnings Date 02/00/08 (unconfirmed)
Average Daily Volume = 956 thousand

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Vornado Realty Trust - VNO - cls: 83.91 chg: +1.12 stop: 86.55*new*

Prepare for some volatility in VNO. The stock dipped to a new two-year low today at $81.28 but rebounded back into the green. We're seeing a mix of technical signals but today's bounce suggest there is more upside to come. The stock should find resistance in the $85-86 region so we're adjusting our stop loss to $86.55. Wait for a failed rally before considering new bearish 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: - 2.39
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: 68.89 chg: -0.71 stop: n/a

It's not looking good for our speculative strangle play on ECA. The clock is running out for us. We don't see any changes from our weekend comments. If given the chance readers will want to consider exiting early to salvage any capital. This was a high-risk play but that doesn't mean we have to wait for the options to expire worthless. 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 $1.25 or higher. FYI: The P&F chart is bullish with a $92 target.

Picked on December 20 at $ 67.52
Change since picked: + 1.37
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million
 

Dropped Calls

Energen - EGN - close: 64.23 change: -0.16 stop: 63.45

EGN only lost 16 cents by the closing bell but the early morning dip hit our stop loss. Shares of EGN broke down under technical support at its 50-dma and hit $63.27 before bouncing back. Our stop loss was at $63.45. We would keep an eye on EGN just in case this is a bear trap. Watch for a new rally over $66.00 as a potential entry point to buy calls. The P&F chart is bullish with a $74 target.

Picked on December 18 at $ 65.32
Change since picked: - 1.09
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 700 thousand

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Express Scripts - ESRX - cls: 77.58 chg: +4.06 stop: 69.89

Target achieved. Investors are turning to healthcare stocks as a safe haven play and the huge healthcare conference going on this week only intensifies the market's interest in this sector. Shares of ESRX continued to soar and the stock added 5.5% on Monday with strong volume. Shares hit an intraday high of $77.96. Our target was the $77.50-80.00 range. We remain bullish on ESRX and would continue to watch it for another entry point.

Picked on December 23 at $ 71.09
Change since picked: + 6.49
Earnings Date 02/07/08 (unconfirmed)
Average Daily Volume = 2.5 million
 

Dropped Puts

Allegheny Tech. - ATI - cls: 79.24 chg: -3.57 stop: 88.75

Target exceeded. ATI continued to drop and it did so in a big way. Shares lost 4.3% and broke down under what should have been support at the $80.00 level. ATI hit an intraday low of $77.86. Our target was the $80.50-80.00 range. The stock is oversold and due for a bounce but we'd keep an eye on it for another entry point down the road.

Picked on December 31 at $ 86.75
Change since picked: - 7.51
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 2.0 million

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ICU Medical - ICUI - close: 35.69 change: +0.50 stop: 37.05

We are pulling the plug on ICUI before the play even begins. Our suggested strategy was to buy puts on a breakdown under $35.00 with a trigger at $34.90. We have decided to remove the play since there has not been any follow through on last Thursday's bearish reversal. Plus, the high amount of short interest should makes bears more than nervous. Aggressive traders may want to keep an eye on it for a breakdown under $35.00.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/29/08 (unconfirmed)
Average Daily Volume = 80 thousand

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Sears Holding - SHLD - cls: 101.10 chg: -0.32 stop: 107.75

We're choosing to close the SHLD play. SHLD broke down to new multi-year lows at $97.36. Unfortunately, the stock bounced back and looks poised to rebound higher. The pattern is still very bearish for SHLD. However, at this time we'd rather close this play and look for a new entry point down the road. The stock has exceeded our initial target in the $100.50-100.00 range. We can keep a look out for a failed rally at its trendline of lower highs or a new relative low under $97.00 as potential entry points for new put positions. Our next target would be the $90 level but you could argue that SHLD is forecasting an $80 target.

Picked on December 11 at $110.28
Change since picked: - 9.18
Earnings Date 10/27/07 (unconfirmed)
Average Daily Volume = 3.3 million
 

Dropped Strangles

None
 

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