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Call Updates

United States Oil Fund - USO - cls: 72.35 chg: -0.73 stop: 68.59

Very short-term we're seeing some signs that USO might dip again. Look for a pull back into the $71.00-70.00 zone as a new entry point to buy calls. Our short-term target is the $74.50-75.00 range. More aggressive traders could easily aim for the $77.50-79.00 region.

Picked on January 24 at $ 70.93
Change since picked: 1.42
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 3.2 million
 

Put Updates

Ambac Fincl. - ABK - cls: 11.64 change: 0.79 stop: n/a

Yesterday afternoon and today was all about the bond insurers. S&P came out and reaffirmed their AAA rating on ABK yet shares of ABK only added 6.4% and produced another lower high in a string of lower highs. Given the S&P comments we would have expected a bigger bounce. Overall there was a lot of talk today about the potential bailout for this industry. We remain bearish but would probably hesitate to open new positions at this time. Our suggestion was for the May puts. We are labeling this a speculative, higher-risk, lottery-ticket style of play. Basically we'll either win big or lose the entire bet. We will have to play it by ear when it comes to exiting but we're looking for a decline to $5.00 or less.

Picked on January 27 at $ 11.54
Change since picked: 0.10
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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MBIA Inc. - MBI - close: 15.50 change: 1.54 stop: n/a

The daily double-digit percentage moves in MBI must be heaven (or hell) for the day traders of the world. This morning the company reported earnings and the results were worse than expected. No surprise there. During their four-hour conference call the company claims that they are positioned to endure any downturn and can endure a credit downgrade and do not see any chances of a bankruptcy. Yet after MBI's earnings report S&P reiterated that they have MBI on their negative creditwatch placing the company at risk for a downgrade. We remain bearish on MBI but this remains a very speculative play. There was a lot of news about a potential bailout but it could be a long time coming and at this point looks like it could be company specific. Reporters on CNBC today suggested that if something doesn't change in the next two weeks that the rating agencies will downgrade MBI's AAA rating. We're not listing a stop loss. This is a lottery ticket play. We'll win big or it's going to go bust. This is one of the few times that we will hold over earnings. MBI reports earnings on Thursday morning before the bell. We will have to play it by ear when it comes to exiting but we're looking for a decline to $5.00 or less.

Picked on January 27 at $ 14.20
Change since picked: 1.30
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 15.2 million

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Perrigo Co - PRGO - close: 30.84 change: 0.04 stop: 32.11

The morning weakness pushed PRGO under support at $30 but it didn't stay down very long. We remain bearish. We're not suggesting new puts until we see a failed rally at $32 or a new relative low under $29.70. Our target is the $25.50-25.00 zone. The P&F chart has turned bearish with a $23 target.

Picked on January 28 at $ 29.85 *triggered
Change since picked: 0.99
Earnings Date 02/05/08 (confirmed)
Average Daily Volume = 1.3 million

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Polo Ralph Lauren - RL - cls: 60.73 chg: -0.81 stop: 63.75

Shares of RL were double teamed this morning as two different analyst firms downgraded the stock. Shares gapped down at $56.79 and dipped to $56.40 before bouncing back thanks to a strong market session. Volume was 4.7 million shares versus the normal 1.7 million shares. Look for a failed rally under the 50-dma as a new bearish entry point to buy puts. We're listing two targets. Our first target is the $55.50-55.00 range. Our second, more aggressive target is the $52.00-50.00 zone.

Picked on January 27 at $ 59.19
Change since picked: 1.54
Earnings Date 02/06/08 (confirmed)
Average Daily Volume = 1.7 million

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Teleflex Inc. - TFX - close: 59.12 chg: 1.47 stop: 60.01

It was not a good day for the bears. TFX dipped to $56.47 and then rebounded sharply this morning. The stock ended with a 2.5% gain and a bullish engulfing candlestick pattern. The rally did stall near overhead resistance at the 50-dma. We would wait for a new decline under $58.00 or $57.50 as an entry point to consider buying puts again. Our target is the $54.00-52.50 zone.

Picked on January 30 at $ 57.65
Change since picked: 1.47
Earnings Date 02/28/08 (unconfirmed)
Average Daily Volume = 408 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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DJIA 1/100 Index - $DJX - cls: 126.50 chg: 2.07 stop: n/a

It was another very volatile day for the markets and the DJIA index. The $DJX (or djx.x) hit an intraday low of $122.50 and a high of $127.02. We are not suggesting new strangle positions at this time. The options we suggested were the February $127 calls (DJW-BW) and the February $122 puts (DJW-NR). Our estimated cost was $3.36. We want to sell if either option hits $4.85 or more. FYI: The intraday high for the call was $2.10 and the intraday high for the put was $2.40.

Picked on January 29 at $124.80
Change since picked: 1.70
Earnings Date 00/00/00
Average Daily Volume = million

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Google - GOOG - close: 564.30 chg: 16.03 stop: n/a

Shares of GOOG traded in another wide range ($534-573) and produced what appeared to be a potential failed rally under its 10 and 200-dma. However, the real fireworks didn't start until after the closing bell and GOOG's earnings report. Wall Street estimates were for an EPS of $4.45. GOOG missed by 2 cents and missed the revenue numbers as well. The stock hit an after hours low of $507.45 but was bouncing at the time of this update trading at $525. We are not suggesting new strangle positions at this time. The options we suggested were the February $600 calls (GOO-BT) and the February $500 puts (GOP-NO). Our estimated cost is $17.00. We want to sell if either option hits $27.00 or more.

Picked on January 30 at $548.277
Change since picked: 16.03
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 5.6 million
 

Dropped Calls

None
 

Dropped Puts

Hartford Fincl. - HIG - cls: 80.50 chg: 1.95 stop: 81.75

It was a crazy day in the markets with a 450 point swing in the DJIA. Shares of HIG also witnessed a lot of volatility with an intraday low of $76.42 and a rally all the way back to $82.00. We have been whipsawed out of it as shares hit our suggested top at $81.75.

Picked on January 30 at $ 78.55
Change since picked: 1.95
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 2.6 million

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Harley-Davidson - HOG - cls: 40.64 chg: 2.13 stop: 42.51

We are giving up on HOG as a bearish play - at least for now. With the U.S. economy in or near a recession sales of Harley Davidson motorcycles have been suffering and should continue to suffer. Unfortunately, a rising tide lifts all boats and HOG is bouncing. Today's session produced a bullish reversal pattern although the stock continues to have resistance near $42.00, near the 50-dma and near the $45.00 level. We'll watch for a failed rally near $45 as a potential entry point for bearish plays.

Picked on January 27 at $ 37.96
Change since picked: 2.68
Earnings Date 01/25/08 (confirmed)
Average Daily Volume = 2.4 million
 

Dropped Strangles

None
 

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