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Call Updates

Blackstone - BX - close: 18.67 chg: +0.30 stop: 17.24

Shares of BX out performed the market on Friday. The stock managed a minor bounce and posted a 1.6% gain. The trend is still bearish and like we said on Thursday the oversold bounce appears to be dead. The only reason to stay in this play is because both BX and the market itself are so oversold that they could both see a big bounce higher. If we do see a wash-out down day then nimble traders can look for another dip to $18.00 or even $17.50-17.25 near the January lows as a new entry point to buy calls. We do not want to hold over the February earnings report.

Suggested Options:
If BX provides a new entry point we would suggest the February calls.

Picked on January 10 at $19.84
Change since picked: - 1.17
Earnings Date 02/11/08 (unconfirmed)
Average Daily Volume: 2.7 million

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Covance - CVD - cls: 89.94 change: -1.67 stop: 86.45 *new*

We have been patient and CVD finally came back toward previous resistance near $90.00. We have been suggesting readers use a trigger to buy calls in the $90.50-90.00 zone. CVD dipped to $89.40 on Friday. This should be short-term support and under normal circumstances we would be suggesting new positions right here. However, we are expecting another market decline so if you're still looking for an entry point then watch for CVD to dip to its rising 50-dma. The 40 and 50-dma has been consistent support in the past. Currently the 50-dma is near $87.57. If you're willing to wait another day or two CVD might provided an entry point in the $88.00-87.50 zone soon. The market has been very volatile lately and just to increase the chances that we don't get stopped out on an intraday dip we're adjusting our stop loss to $86.45 from $86.99. We have two targets. 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.

Suggested Options:
We do not want to hold over the late January earnings report so we are suggesting the February calls.

BUY CALL FEB 85.00 CVD-BQ open interest=257 current ask $6.80
BUY CALL FEB 90.00 CVD-BR open interest=198 current ask $3.70
BUY CALL FEB 95.00 CVD-BS open interest=124 current ask $1.80

Picked on January 18 at $ 90.50 *triggered
Change since picked: - 0.56
Earnings Date 01/30/08 (confirmed)
Average Daily Volume = 395 thousand

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Genzyme - GENZ - close: 76.83 change: -4.30 stop: 74.95

It is normally a sign that we're nearing the bottom when investors start selling their winners. As of Thursday GENZ was hitting new highs but the stock got hammered on Friday for 5.3% loss as traders panicked to lock in a gain during the market weakness. A bounce from here near $76.00 would be a new bullish entry point. However, if we do see a capitulation move this week then GENZ could dip to $75.00 and its 50-dma or even previous January support near $74.00. More aggressive traders might want to consider placing their stop loss under $74.00. 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.

Suggested Options:
We are suggesting the February or March calls but remember that we want to exit ahead of the February earnings report.

Picked on January 13 at $ 78.56
Change since picked: - 1.73
Earnings Date 02/13/08 (unconfirmed)
Average Daily Volume = 2.5 million
 

Put Updates

Liberty Media - LCAPA - cls: 103.04 chg: +0.98 stop: 110.05

Readers might want to do a little profit taking if Friday's action in LCAPA sees any follow through. The stock found support near $101.75 and performed a mini double-bottom intraday. Shares look poised to bounce back to $105 or higher. On the other hand this could be a speed bump on the way to $100 if we do see a market wash out next week. We're not suggesting new positions at this time. 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.

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

Picked on January 15 at $107.49 *triggered
Change since picked: - 4.45
Earnings Date 02/00/08 (unconfirmed)
Average Daily Volume = 653 thousand

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Priceline.com - PCLN - cls: 92.98 chg: +3.62 stop: 100.51

Hmm... PCLN displayed some relative strength on Friday. The stock got an upgrade Friday morning. A Citigroup analyst raised their rating to a "buy" claiming that PCLN was recession-resistant due to the high volume of business from overseas. The trend is still bearish but we hesitate to open new positions here and without a doubt the stock price has been very volatile lately. Our target is the $82.50-80.00 range. More conservative traders will want to consider exiting near $85.00. We do not want to hold over the mid February earnings report.

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

Picked on January 17 at $ 93.99 *triggered
Change since picked: - 1.01
Earnings Date 02/12/08 (unconfirmed)
Average Daily Volume = 1.6 million

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Shire Plc - SHPGY - close: 62.86 change: -0.90 stop: 68.07

SHPGY dipped to $62.41 on Friday. It's close but not close enough to our second target in the $62.00-60.00 range. Readers may still want to consider locking in a profit right here. However, if we do see another big down day on Tuesday this week then SHPGY might plunge to the $60 region. We're not suggesting new positions in SHPGY at this time. The stock has already hit our first target near $65.

Suggested Options:
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: - 5.21
Earnings Date 02/21/08 (unconfirmed)
Average Daily Volume = 956 thousand
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

Sears Holding - SHLD - cls: 89.43 chg: +0.50 stop: 100.26

We're closing SHLD as a current play. We remain very bearish on the stock but we're just not getting any entry points. We're not counting it as a win because shares gapped down on us. Right now we would be look for a failed rally near $95.00 or $100.00 as a potential entry point for new bearish plays.

Picked on January 13 at $ 96.17 (gap down 86.43)
Change since picked: - 6.74
Earnings Date 02/28/08 (unconfirmed)
Average Daily Volume = 3.3 million
 

Dropped Strangles

Biogen Idec - BIIB - cls: 59.91 chg: -1.14 stop: n/a

What did I tell you? After BIIB's failure to move on the FDA news last Monday I speculated that BIIB would be pinned to the $60 level thanks to options expiration. The lack of a reaction to the FDA news killed our speculative strangle play.

Picked on January 10 at $ 59.18
Change since picked: + 0.73
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 4.4 million

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Encana - ECA - close: 62.22 chg: +0.59 stop: n/a

Unfortunately, our high-risk/reward strangle on ECA failed to perform. Our options expired worthless. 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.

Picked on December 20 at $ 67.52
Change since picked: - 5.30
Earnings Date 02/14/08 (unconfirmed)
Average Daily Volume = 2.7 million
 

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