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Call Updates

Allegheny Tech. - ATI - cls: 73.03 chg: +0.85 stop: 68.65

ATI popped higher this morning and hit an intraday high of $75.46 before paring its gains. The relative strength is encouraging but bulls are not out of the woods yet. If the major market indices continue lower we would expect ATI to dip towards $70.00 and short-term support near its 10-dma. Our short-term target is the $79.75-80.00 range or the 50-dma, whichever is hit first. The P&F chart for ATI looks very bullish with an $87 target.

Picked on February 04 at $ 75.11 *triggered
Change since picked: - 2.08
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 2.4 million

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General Cable - BGC - cls: 56.35 change: -1.96 stop: 54.95

BGC continued to pull back again today and shares produced a second session of -3.3% losses. The breakdown under its 10-dma is bearish. We were suggesting readers buy calls on a dip into the $57.75-57.00 zone. BGC has surpassed that zone and looks like it's headed for the $55 region. We would wait and watch for signs of a bounce near $55.00 before considering new bullish positions at this time. Currently our target is the $64.50-65.00 range or the 50-dma, whichever comes first. The Point & Figure chart is very bullish with a $76 target.

Picked on February 06 at $ 57.75 *triggered
Change since picked: - 1.40
Earnings Date 02/12/08 (confirmed)
Average Daily Volume = 1.1 million

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Mosaic - MOS - close: 93.44 change: +0.75 stop: 88.99

Wednesday was another volatile day for shares of MOS. The stock rallied to $97.62 before shedding most of its gains. We reiterate yesterday's comments. At this point we would wait and watch for a bounce near $90 as a new bullish entry point. Our target is the $108.00-110.00 range.

Picked on February 04 at $ 95.51 *triggered
Change since picked: - 2.07
Earnings Date 04/09/08 (confirmed)
Average Daily Volume = 5.6 million

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Petroleo Brasileiro - PBR - cls: 106.01 chg: -0.46 stop: 105.85

There was no recovery in shares of PBR today. This is bearish. The oversold bounce made it to $109 this morning but then the rally ran out of steam. PBR is testing support near $105 and looks like it will breakdown. Our suggested entry point to buy calls was $116.00, which has not been hit yet. We're going to wait and see if PBR can trade near $100 and then consider bullish positions there. We will be watching the $102-100 zone closely. Currently our trigger to buy calls at $116 remains in play. Our target is the $128.00-130.00 range. A move over $116 would produce a new Point & Figure chart buy signal. FYI: Another risk is PBR's earnings report. We can't find an earnings date and they normally report in mid February. That is a risk because we do not like to hold over an earnings report.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/12/08 (unconfirmed)
Average Daily Volume = 7.6 million

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United States Oil Fund - USO - cls: 69.02 chg: -1.13 stop: 68.59

A larger than expected build up in the oil inventory report today send crude oil futures lower. Crude closed at $88.15 while USO dropped to $69.02, which is under round-number support at $70 and technical support at its 100-dma. We were surprised to see that USO did not hit our stop loss at $68.59. The intraday low was $68.75. Odds are very good that the USO will hit our stop loss tomorrow but we're going to stick it out just incase the commodity and this ETF bounces. A new rally over $70.00-70.50 would look like a potential bullish entry point.

Picked on January 24 at $ 70.93
Change since picked: - 1.91
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 3.2 million
 

Put Updates

Ambac Fincl. - ABK - cls: 11.01 change: -0.38 stop: n/a

Hope seems to be fading for the bond insurers. Shares of ABK traded flat to down in a narrow range today. A Reuters article today had some interesting comments from the Goldman Sachs CFO who believes that a bailout of the bond insurers would be "more challenging" than the bailout of Long Term Capital Management in the mid 1990s. We're still betting on shares of ABK crumbling but this remains an aggressive, speculative play. The unofficial timeline for a rescue plan has somewhere between 9 days and the end of February before the rating agencies start downgrading companies like ABK and MBI. We do not have a stop loss on this play. It is a lottery-ticket strategy. However, if you want to use a stop consider a stop loss above $15.50 or above the $16.50-17.00 region. Of course if ABK rallies that sharply these deep out of the money puts won't be worth much. ABK looks like it has resistance at $15.50, 16.50, and then $20.00. Our target was a decline towards $5.00 or less. We were suggesting the May puts.

Picked on January 27 at $ 11.54
Change since picked: - 0.53
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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MBIA Inc. - MBI - close: 14.28 change: -0.62 stop: n/a

MBI must be getting desperate. After the closing bell tonight the company announced plans to raise another $750 million by offering another 50.3 million shares of stock. Hopes for a rescue plan may be fading and MBI is trying to shore up its capital reserves to maintain its AAA credit rating. This news did have shares of MBI trading up near $15.40 in after hours markets tonight. As we mentioned in the ABK update above the bond insurers are running out of time. The unofficial timeline for a rescue plan has somewhere between 9 days and the end of February before the rating agencies start downgrading companies like ABK and MBI.
This remains an aggressive, speculative play. We do not have a stop loss since this was a lottery-ticket style of play but if you wanted to play one consider putting your stop above resistance near $17.50 or above $18.00. We were aiming for a decline to $5.00 or less. Our suggested options were the May puts.
Picked on January 27 at $ 14.20
Change since picked: + 0.08
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 15.2 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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DJIA 1/100 Index - $DJX - cls: 122.00 chg: -0.65 stop: n/a

The DJIA (and $DJX) continue to inch lower. We have less than two weeks left before February options expire. 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.

Picked on January 29 at $124.80
Change since picked: - 2.80
Earnings Date 00/00/00
Average Daily Volume = million

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Google - GOOG - close: 501.71 chg: - 5.09 stop: n/a

It was a relatively quiet day for GOOG. Shares only traded in a $13 range. The trend is still down but there are a lot of investors who think buying the dip to $500 is an entry point. There was another analyst firm out today suggesting this was a buying opportunity. We don't see any changes from our previous comments. We need to be defensive here. At this point we would start taking money off the table every time the February $500 put starts trading near $20.00. We do have just under two weeks left and GOOG can still see some huge moves between now and February expiration but it's probably going to be a gut-churning two weeks. We are not suggesting new positions. 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 $548.27
Change since picked: -46.56
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 5.6 million
 

Dropped Calls

Centex - CTX - close: 23.53 change: -2.06 stop: 24.89

Homebuilders continued to see profit taking on Wednesday. This morning management at luxury homebuilder Toll Brothers (TOL) echoed similar statements to what CTX said yesterday, that there is no end in sight for the housing slowdown. The DJUSHB home construction index lost 3.9%. Shares of CTX plunged 8% and broke down under support at the $25.00 level and all of its significant moving averages. We would have been stopped out at $24.89.

Picked on February 04 at $ 27.00 *triggered
Change since picked: - 3.47
Earnings Date 04/30/08 (unconfirmed)
Average Daily Volume = 5.3 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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