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Call Updates

Apple Inc. - AAPL - close: 129.45 change: +3.97 stop: see details

Shares of AAPL turned in a strong day after some positive analyst comments this morning. While volume on AAPL was not that impressive the MACD indicator on the daily chart has produced a new "buy" signal. AAPL has rallied to short-term resistance at its 10-dma and it may be time for a minor retracement before continuing to rebound. We don't see any changes from our previous comments.

AAPL play #1 - directional calls

So far so good. Our short-term target is the $139.00-145 range. Expect resistance at $140 and the 200-dma near $145. We are suggesting a stop loss at 116.99 under last week's low. More conservative traders may want to use a stop closer to $120.

AAPL play #2 - Credit put spread

We don't see any changes here although if you're still looking for a new entry point following today's move you could wait for a dip and signs of a bounce again to launch a new credit put spread. The options we suggested were buying the March $110 put and selling the March $120 put.

AAPL play #3 - Sell Naked Puts

It's the same story here. We don't see any changes regarding our naked put strategy. We had suggested selling the March $150 put with plans to buy it back when AAPL hits $139.00.

Picked on February 10 at $125.48
Change since picked: + 3.97
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 44.4 million

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Apollo Group - APOL - close: 73.03 chg: -0.91 stop: 69.95

APOL struggled near $75 this morning and eventually closed down 1.2%. We would use any dip near its rising 100-dma, which is technical support, as a new bullish entry point to buy calls. Actually any dip in the $72.00-70.50 zone is probably a good spot to buy calls but if APOL is under $71 wait for signs of a bounce before jumping in. Our target is the $80.00-81.00 range.

Picked on February 10 at $ 73.94
Change since picked: - 0.91
Earnings Date 04/07/08 (unconfirmed)
Average Daily Volume = 3.1 million

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CONSOL Energy - CNX - cls: 80.96 change: +3.42 stop: 69.95

CNX is off to a strong start with a 4.4% gain today. Our one complaint would be the dismally low volume, which does not contribute to the bull's case. Most of the coal-related stocks were up today as the sector rally continues. Tonight after the closing bell Fording Canadian Coal (FDG) will report earnings, which could water or gas on this coal stock breakout depending on the news. CNX's breakout over the $80.00 level is bullish. If you don't feel like chasing it here you could wait for a dip back toward $78.50-78.00 but there is no guarantee it will show up. We have two targets for CNX. Our first target is the $84.50-85.00 range. Our second, more aggressive target is the $88.00-90.00 zone. The P&F chart has a brand new triple-top breakout buy signal with a $124 target.

Picked on February 10 at $ 77.54
Change since picked: + 3.42
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 3.3 million

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Petroleo Brasileiro - PBR - cls: 115.10 chg: +3.53 stop: 104.95

Oil stocks were showing strength again thanks to another strong session in crude oil futures. Crude oil has broken out past its late January highs. Bears will argue that today was just a continuation of Friday's short squeeze. Whatever the case oil stocks were very strong. Shares of PBR added more than 3% and look poised to break out over $116. Currently our official suggested entry point is to buy calls at $116.00. However, we're also carefully watching the $105 region or the $100 level as an alternative entry point to buy calls. 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
 

Put Updates

Ambac Fincl. - ABK - cls: 10.48 change: -0.51 stop: n/a

The AIG news today regarding their exposure to the CDO/sub-prime mess weighed heavily on financials. ABK lost another 4.6%. Currently we are suggesting the May puts and a speculative out of the money March call as a hedge to protect us if a bailout deal does get done. Many on Wall Street expect something to occur this week but it could drag out to next week. The options we suggested were the May $5 or $2.50 puts and the March $20 call.

Picked on January 27 at $ 11.54
Change since picked: - 1.06
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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Bear Stearns - BSC - cls: 79.76 chg: -0.91 stop: 84.31

BSC broke down under support at the $80.00 mark today. Shares did hit our suggested entry point to buy puts at $79.49 so the play is now open. Our target is the $71.00-70.00 zone. Our biggest risk is that a bailout plan for the bond insurers does get done (and probably this coming week). If plan is announced and the street thinks it has a good chance of actually coming to pass then shares of BSC are bound to rally sharply due to its exposure to the sub-prime mess.

Picked on February 11 at $ 79.49 *triggered
Change since picked: + 0.27
Earnings Date 03/13/08 (unconfirmed)
Average Daily Volume = 7.4 million

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FedEx - FDX - close: 88.45 change: +0.45 stop: 92.05

There is no good reason for FDX to be up today with crude oil spiking higher. This looks like nothing more than an oversold bounce. A failed rally anywhere near $90.00 would be an attractive entry point to buy puts. There is potential support at $86 but our target is the $81.00-80.00 zone.

Picked on February 10 at $ 88.00
Change since picked: + 0.45
Earnings Date 03/20/08 (unconfirmed)
Average Daily Volume = 3.2 million

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W.W.Grainger - GWW - close: 76.37 chg: -0.28 stop: 80.05

Shares of GWW were downgraded before the bell this morning, which accounts for the gap down. The stock hit $74.70 and then bounced back. We would expect any rebound to roll over in the $77.50-80.00 zone so look for a failed rally as a new entry point to buy puts. Another alternative would be to wait for a breakdown under support at $75.00. Our target is the $70.75-70.00 zone.

Picked on February 10 at $ 76.65
Change since picked: - 0.28
Earnings Date 04/16/08 (unconfirmed)
Average Daily Volume = 1.0 million

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iShares DJ Financial - IYF - cls: 86.71 chg: -1.58 stop: 93.01

The AIG news regarding their known and unknown exposure to the sub-prime crisis renewed fears across the financials. The IYF lost 1.7% and broke down under short-term support near $87.50. We remain bearish here but an oversold bounce and failed rally near $90.00 would be another entry point to buy puts. We're thinking about adjusting our stop loss lower toward $91-90. FYI: The MACD on the daily chart has produced a new sell signal today. We're aiming for a test of the $80.00 region. Our official target is the $81.00-80.00 zone.

Picked on February 06 at $ 88.62
Change since picked: - 1.91
Earnings Date 00/00/00
Average Daily Volume = 1.1 million

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MBIA Inc. - MBI - close: 13.58 change: -1.02 stop: n/a

Shares of MBI were also impacted by the AIG news and renewed fears over the sub-prime issue. The stock lost close to 7%. Currently we are suggesting the May puts and a speculative out of the money March call as a hedge to protect us if a bailout deal does get done. Many on Wall Street expect something to occur this week but it could drag out to next week. The options we suggested were the May $7.50, $5.00 or $2.50 puts. We recently added a deep out of the money call, the March $22.50 call, as a hedge in case a rescue plan does get announced and the stocks react to it.

Picked on January 27 at $ 14.20
Change since picked: - 0.62
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 15.2 million

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Myriad Genetics - MYGN - cls: 38.65 chg: -1.06 stop: 43.01

Resistance at the $40.00 level held and shares of MYGN lost another 2.5%. This looks like another entry point to buy puts. Our target is the $36.00-35.00 range. More aggressive traders may want to aim lower. The Point & Figure chart is bearish with a $34 target. FYI: We always consider a biotech stocks to be a more aggressive, higher risk play because you never know when an FDA decision will be released or some clinical trial info will come out that could send the stock moving sharply either direction.

Picked on February 07 at $ 39.75 *triggered
Change since picked: - 1.10
Earnings Date 02/05/08 (confirmed)
Average Daily Volume = 801 thousand

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Sears Holding - SHLD - cls: 101.07 chg: +2.48 stop: 100.25

Aggressive traders might want to consider jumping into bearish positions on SHLD now. We mentioned an alternative entry point to buy puts on a failed rally in the $101-102 zone. The bounce hasn't failed yet but that could happen tomorrow (you will obviously need to adjust your stop loss). Currently our official entry point to buy puts is at $94.75. If triggered at $94.75 our target is the $86.00-85.00 range. We do not want to hold over the end of February (unconfirmed) earnings report.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/28/08 (unconfirmed)
Average Daily Volume = 3.0 million

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Simon Properties - SPG - cls: 83.60 chg: -0.26 stop: 90.61

The REIT stocks continued to look weak today but I want to remind readers that this is a very volatile bunch. A failed rally in the $85.00-87.00 zone could be used as a new entry point. Our target is the $76.00-75.00 range.

Picked on February 07 at $ 84.39 *triggered
Change since picked: - 0.79
Earnings Date 02/01/08 (confirmed)
Average Daily Volume = 2.7 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: 122.40 chg: +0.58 stop: n/a

We have four days left for the strangle on the DJX index, a 1/100th representation of the DJIA. Due to this time frame we are adjusting our suggested sell target to $4.40. Keep an eye on those puts. 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.

Picked on January 29 at $124.80
Change since picked: - 2.40
Earnings Date 00/00/00
Average Daily Volume = million

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Google - GOOG - close: 521.16 chg: + 4.47 stop: n/a

GOOG is still bouncing and managed a 0.8% gain. However, the rebound has encountered its first level of technical resistance at its descending 10-dma. After a $30 bounce from its lows it may be time for the rebound to run out of gas. Unfortunately, we only have four days left for these GOOG options. If you just want to play defensive then start selling off your position as the put option rises to $15, then $18, then $21, etc. 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 $24.00 or more, which is an adjustment from our original target of $27.

Picked on January 30 at $548.27
Change since picked: -27.11
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 5.6 million
 

Dropped Calls

Allegheny Tech. - ATI - cls: 80.71 chg: +4.11 stop: 69.75

Target surpassed. ATI rallied more than 5.3% today after Goldman Sachs upgraded the stock to a buy and slapped a $106 price target on it. Shares hit an intraday high of $81.62. Our target was $79.75-80.00. Currently shares are testing resistance near its 50-dma and the $80 region. We would look for a dip back into the $75-76 zone as a potential entry point for new bullish positions again.

Picked on February 04 at $ 75.11 *triggered
Change since picked: + 5.60
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 2.4 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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