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Call Updates

Blackstone - BX - close: 18.37 chg: -0.73 stop: 17.24

It's getting ugly out there. By all accounts the oversold bounce and bullish reversal in BX is now dead. The stock has produced two failed rallies under $20.00 in the last two days. BX looks like it's poised to retest the January lows near $17.25. This is a high-risk, aggressive play and at this point I would be looking for a bounce at the January low, which would actually be a good spot to try capturing a rebound again. I will reiterate that trying to call the bottom or catch the falling knife or whatever you want to call it is usually dangerous for your trading account's health. We all know that stocks don't go up or go down in a straight line for very long. I'm actually suggesting readers consider buying calls again on a bounce in the $17.50-17.25 zone. I would use a stop loss under whatever appears to be the intraday low or maybe $16.99. If BX hits our new entry zone I'll relist it as a new play. We do not want to hold over the February earnings report.

Picked on January 10 at $19.84
Change since picked: - 1.47
Earnings Date 02/11/08 (unconfirmed)
Average Daily Volume: 2.7 million

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Covance - CVD - cls: 91.61 change: -2.46 stop: 86.99

The market is finally starting to weigh on shares of CVD. The stock lost 2.6% today and I suspect shares will dip toward $90.00 tomorrow. That should be our entry point to buy calls! Our suggested entry point is the $90.50-90.00 zone. Our first conservative target is $94.50-95.00. Our second, more aggressive target is the $99.00-100.00 range. FYI: We are unfortunately, running low on time. We don't want to hold over earnings.

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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Genzyme - GENZ - close: 81.13 change: +1.40 stop: 74.95

GENZ displayed some very impressive relative strength today. The NASDAQ may have lost 2% but GENZ posted a 1.75% gain and a new high. Volume has been surging on the rally, which is bullish. If you've been waiting for a move over $80.00 then you got it yesterday. Our target is the $84.00-85.00 range. I would actually consider a second, more aggressive target in the $88-90 zone. The P&F chart looks very bullish with a $94 target. FYI: Any time we play a biotech company it is always a high-risk play due to headline risk. You never know what news might come out concerning an important FDA decision or clinical trial that could dramatically move the stock price and see shares gap one way or the other.

Picked on January 13 at $ 78.56
Change since picked: + 2.57
Earnings Date 02/13/08 (unconfirmed)
Average Daily Volume = 2.5 million
 

Put Updates

Liberty Media - LCAPA - cls: 102.06 chg: -4.71 stop: 110.05*new*

The sell-off in shares of LCAPA is definitely picking up speed. The market meltdown certainly helps. The stock lost 4.4% and closed at its lows today. We are adjusting our stop loss to $110.05. More conservative traders could try and inch down their stop to the 10-dma. Our target is the $100.25-100.00 range. The P&F chart is bearish with a $98 target. Warning: We cannot find an earnings report date for LCAPA but the company appears to have a history of reporting in February. Not knowing when they report is a risk since we don't want to hold over the event.

Picked on January 15 at $107.49 *triggered
Change since picked: - 5.43
Earnings Date 02/00/08 (unconfirmed)
Average Daily Volume = 653 thousand

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Priceline.com - PCLN - cls: 89.36 chg: +6.07 stop: 100.51

Shares of PCLN have crumbled in the last two days. The stock reversed under its 10-dma Wednesday and broke down under support near $95 today. We were suggesting an entry at $93.99, which was hit today. PCLN hit an intraday low of $86.84 before bouncing a bit. Now that the play is open our target is the $82.50-80.00 range. More conservative traders will want to consider exiting near $85.00. Please note that PCLN can be a very volatile stock. We do not want to hold over the mid February earnings report.

Picked on January 17 at $ 93.99 *triggered
Change since picked: - 4.63
Earnings Date 02/12/08 (unconfirmed)
Average Daily Volume = 1.6 million

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Sears Holding - SHLD - cls: 88.93 chg: -1.32 stop: 100.26*new*

SHLD looks like it was trying to rebound yesterday but today's market sell-off just sucked the wind out of any bounce. We would watch for a failed rally at the 10-dma (near 95.00) as a new bearish entry point to buy puts. Please note we're adjusting the stop loss to $100.26. We had two targets. One target was $91.00-90.00. The second target was $85.50-85.00. The P&F chart is bearish with a $78 target. SHLD has actually exceeded both of our targets but the stock has just not cooperated with an entry!

Picked on January 13 at $ 96.17 (gap down 86.43)
Change since picked: - 7.24
Earnings Date 02/28/08 (unconfirmed)
Average Daily Volume = 3.3 million

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Shire Plc - SHPGY - close: 63.76 change: -1.13 stop: 68.07*new*

SHPGY came close to hitting our second target on Wednesday. Shares dipped to $62.40 before bouncing back. Fortunately, for us the bounce failed and shares produced another bearish reversal-looking candlestick today. We are adjusting the stop loss to $68.07. We're not suggesting new positions at this time although more aggressive traders may want to aim for the $60 level. The stock has already hit our first target near $65. Our second target is the $62.00-60.00 zone.

Picked on December 13 at $ 68.07 *triggered/gap down entry
Change since picked: - 4.31
Earnings Date 02/21/08 (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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Biogen Idec - BIIB - cls: 61.05 chg: +1.06 stop: n/a

BIIB may be showing some relative strength but it's too little too late. Unless shares move significantly tomorrow it's lights out for this strangle play. The options we suggested for our speculative, higher-risk strangle were the January $65 call (IHD-AM) and the January $55 put (IDK-MK). Our estimated cost here is $1.05. We are adjusting our exit to anything in the $0.75-1.00 range.

Picked on January 10 at $ 59.18
Change since picked: + 1.87
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 4.4 million

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Encana - ECA - close: 61.63 chg: -1.74 stop: n/a

This week's sell-off in shares of ECA have given us a brief hope of recapturing some of our capital on the put side. The put spike to 35 cents today and is currently trading at bid $0.20 ask $0.30. Tomorrow is the last day so take whatever you can get. If ECA can spike under the $60 level we might be able to recoup our cost. 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 are adjusting our exit to anything in the $0.40-0.65 range.

Picked on December 20 at $ 67.52
Change since picked: - 5.89
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million
 

Dropped Calls

Inverness Medical - IMA - cls: 55.60 chg: -3.75 stop: 57.45

Shares of IMA were hammered hard today. The stock broke down under support near $58.00 early on and just plunged toward the $55 level and its 100-dma. The stock hit our stop loss at $57.45 closing the play. IMA still has a long-term bullish trend so keep an eye on it for another opportunity.

Picked on January 08 at $ 58.50 *triggered/gap open entry
Change since picked: - 2.90
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 857 thousand

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Joy Global - JOYG - cls: 53.58 chg: -4.62 stop: 57.49

Investors were selling everything today and JOYG got crushed for a 7.9% loss. The stock actually broke down under its 50-dma on Wednesday and hit our stop loss at $57.49 yesterday saving us from today's painful move lower. This move looks overdone and we would keep an eye on JOYG for another opportunity down the road.

Picked on January 09 at $ 60.19 stopped at: 57.49
Change since picked: - 6.61
Earnings Date 02/28/08 (unconfirmed)
Average Daily Volume = 1.7 million

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McDonalds - MCD - cls: 51.96 chg: -0.45 stop: 53.25

MCD broke down under technical support at its 200-dma on Wednesday. The same day shares hit our stop loss at $53.25 closing the play. MCD continues to sink but we continue to hear a lot of support for the stock. Bullish investors may want to take another look at MCD near $50 or in the $47.50-50.00 region.

Picked on January 13 at $ 54.32 stopped at $53.25
Change since picked: - 2.36
Earnings Date 01/28/08 (confirmed)
Average Daily Volume = 8.6 million

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Zimmer Holdings - ZMH - cls: 67.70 chg: +0.08 stop: 67.49

ZMH held up pretty well today. The stock actually posted a gain in spite of the market's big sell-off. Unfortunately, shares clipped our stop loss at $67.49 on Wednesday, January 16th. The play is closed. We would keep an eye on ZMH for a new rebound through the $70.00 level as another bullish entry point.

Picked on January 14 at $ 70.64 *gap open entry /stopped 67.49
Change since picked: - 2.94
Earnings Date 01/29/08 (confirmed)
Average Daily Volume = 2.0 million
 

Dropped Puts

Precision Castparts - PCP - cls: 107.99 ch: -3.76 stop: 128.21

Target exceeded and achieved. PCP has seen a sharp sell-off and shares have exceeded our first target in the $115.50-115.00 range. Today's 3.3% decline pushed the stock into our second target in the $110-105 zone. Given the market's bearish tone we wouldn't be surprised to see PCP decline toward $102-100.

Picked on January 14 at $124.50 target hit $115.50 & 110.00
Change since picked: -16.51
Earnings Date 01/22/08 (confirmed)
Average Daily Volume = 1.1 million
 

Dropped Strangles

None
 

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