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Call Updates

Apple Inc. - AAPL - cls: 179.40 chg: +8.15 stop: 159.90

Hmm... if Wednesday's bounce in the markets has any legs we may have missed our entry point in AAPL today. The stock provided a couple of dips in the $169-168 region before rebounding sharply for a $10 move. We added AAPL last night with a suggested entry point in the $166.50-165.00 zone. Aggressive traders may want to chase it but we want to remind you again that the options are very expensive due to the stock's volatility and shares are now facing potential resistance near $180. We will maintain our suggested entry point for now and wait to see if this rebound has any legs. We will have two targets. Our first target is $179.00-180.00. Our second target is $188.00-190.00.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/22/08 (confirmed)
Average Daily Volume = 38 million

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BP Prudhoe - BPT - cls: 83.65 chg: +1.04 stop: 77.90

BPT continues to rally and hit new 52-week highs today. Traders bought the intraday low at $82.00. We're not going to chase it here so we are sticking with our buy the dip plan. We are suggesting a trigger to buy calls in the $80.50-79.00 range. If triggered our target is the $89.00-90.00 zone.

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/08 (unconfirmed)
Average Daily Volume = 84 thousand

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Covance - CVD - cls: 95.61 change: +2.52 stop: 86.99

It definitely looks like we missed the move in CVD by not listing an official entry on a breakout over $90.00. Shares look very strong but they also look overbought. We are sticking with our plan for now. We are now suggesting that readers buy a dip into the $90.50-90.00 zone. 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: 68.74 change: +0.28 stop: 67.75

Short-term support near $68.00 held but the afternoon bounce in ECA was pretty anemic. We don't see any changes from our previous comments. Wait for a bounce from $68.00 or a new rally over $70.00 before considering new call 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: - 1.36
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million

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Hess Corp. - HES - cls: 94.78 chg: +3.35 stop: 89.90

This is how our buy the dip plan is supposed to work. HES dipped to $90.47 and traders continued to buy the pullbacks near $90 support. When the market rallied HES vaulted more than 3.6%. Shares also produced a bullish engulfing candlestick pattern. We were previously suggesting that readers buy dips in the $92.00-90.00 zone. 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: + 2.78
Earnings Date 01/30/08 (unconfirmed)
Average Daily Volume = 4.5 million

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Hologic - HOLX - close: 68.33 chg: +0.22 stop: 66.45

Bulls bought the dip multiple times in HOLX today and the stock looks poised to move higher. If you were looking for a new entry point this is probably it although we'd probably suggest a tighter stop loss near $67.00. 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 did present at the J.P.Morgan healthcare conference today but we didn't see any news on it.

Picked on December 18 at $ 66.22
Change since picked: + 2.11
Earnings Date 01/30/08 (unconfirmed)
Average Daily Volume = 2.8 million

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Humana Inc. - HUM - cls: 85.79 chg: +3.87 stop: 78.95

There is no doubt about it - we missed the move in HUM. Shares never pulled back like we expected them to. The trend is very bullish but HUM is now short-term overbought. We will keep an eye on it and look for a new entry point. Right now we'd be watching the $81.00-80.00 zone as the region to watch. We're taking our official entry point off the table for now. If you decide buy a dip we'd use a stop loss around $79.00. So to recap, we do not have an entry point at this time. It's a waiting game to see if HUM pulls back. The next level of overhead resistance should be $90.00. Broken resistance at $80-81 should be support.

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: 62.05 chg: +2.65 stop: 55.99*new*

The rally continues in IMA and shares have broken through potential resistance at $60.00. We are raising our stop loss to $55.99. More conservative traders may want to consider a stop closer to $58. Our target is the $64.00-65.00 range.

Picked on January 08 at $ 58.50 *triggered/gap open entry
Change since picked: + 3.55
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 857 thousand
 

Put Updates

Shire Plc - SHPGY - close: 69.35 change: +2.07 stop: 70.05

Alert! SHPGY will probably hit our stop loss tomorrow. Drug stocks continued to rally on Wednesday and SHGPY got a boost after being upgraded before the bell this morning. The stock has rallied right toward technical resistance at its 50-dma. SHPGY should also have round-number resistance at $70.00. Here is our problem. SHPGY trades in London. The U.S. markets really didn't rally until late in the session after the British market was closed. When the London exchange opens tomorrow it will probably move higher on the U.S. rebound. That means SHPGY will most likely hit our stop loss at $70.05 and potentially gap above it. We are not suggesting new positions in SHPGY at this time.

Picked on December 13 at $ 68.07 *triggered/gap down entry
Change since picked: + 1.28
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: 68.74 chg: +0.28 stop: n/a

We don't see any changes from our prior comments on this ECA strangle play. The clock is running out for us. 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: + 1.22
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million
 

Dropped Calls

Foster Wheeler - FWLT - cls: 142.90 chg: -0.59 stop: 137.95

The closing numbers for FWLT today don't even begin to tell the story. Shares were a lot more volatile than expected. The stock continued to fall and hit our suggested entry point to buy calls at $140.50. Unfortunately, the stock continued to fall and hit our stop loss at $137.95. FWLT did not turn around until it hit $133.16. The stock then managed a 7% rebound from its intraday lows. At $133 FWLT had lost 38 points or 22% from its recent highs near $171. We are suggesting readers buy this rebound (see the new call section) but given the stock's volatility this is an aggressive, high-risk play.

Picked on January 09 at $140.50 *triggered
Change since picked: + 2.40
Earnings Date 02/27/08 (unconfirmed)
Average Daily Volume = 1.7 million
 

Dropped Puts

Air Methods - AIRM - close: 49.40 chg: +1.18 stop: 51.50

It's time to run. The market's bounce probably has further to go. If AIRM breaks out over $50.00 or the 50-dma near $51.65 the stock could see a huge short squeeze. We're suggesting an early exit immediately.

Picked on January 04 at $ 47.95 *bad tick-entry
Change since picked: + 1.45
Earnings Date 03/06/08 (unconfirmed)
Average Daily Volume = 149 thousand

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Essex Property - ESS - close: 89.65 chg: +2.07 stop: 95.34

Target exceeded again! ESS plunged to an intraday low of $84.59 this morning. Our second target was the $85.50-85.00 range. The stock had already hit our first target in the $90.25-90.00 zone. ESS, like most of the market, looks oversold and due for a bounce. However, we'd keep an eye on it for a failed rally in the $95-100 region.

Picked on December 30 at $ 95.34
Change since picked: - 5.69
Earnings Date 02/06/08 (confirmed)
Average Daily Volume = 315 thousand
 

Dropped Strangles

None
 

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