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Call Updates

Atwood Oceanics - ATW - cls: 96.24 change: +3.13 stop: 89.19*new*

Oil service stocks soared on Monday. The OSX index rose 2.3%. Shares of ATW out performed its peers with a 3.3% gain. If we had to pick on something to complain about it would the lack of volume behind today's move. If the sector can follow through with more gains then ATW has a good chance of hitting our target in the next day or two. We are adjusting our stop loss to $89.19, just under Friday's low. Our target is the $99.00-100.00 zone. FYI: ATW has a moderate amount of short interest, about 7.4% of the 27.6 million-share float. That is about 4 days worth of short interest.

Picked on February 17 at $ 90.37
Change since picked: + 5.87
Earnings Date 05/08/08 (unconfirmed)
Average Daily Volume = 654 thousand

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CF Industries - CF - close: 130.99 change: +5.13 stop: 117.45*new*

Monday was another strong day for stocks in the fertilizer, herbicide, agriculture industry. CF added more than 4% and shot to a new all-time high breaking out over the $130 level. More conservative traders will want to seriously consider doing some profit taking right here. We are adjusting our stop loss to $117.45. Our target is the $138.00-140.00 zone. The Point & Figure chart is bullish with an updated $143 target. FYI: The most recent data puts short interest at 6.8% of the 53.4 million-share float.

Picked on February 19 at $121.03 *triggered/gap higher
Change since picked: + 9.96
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 2.8 million

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Monsanto - MON - cls: 121.92 change: +5.25 stop: 113.99 *new*

MON, another ag-play, turned in a strong session with a 4.49% gain and a breakout over resistance near $120. Today's rally pushed the P&F chart bullish target from $157 to $163. We have two targets. Our first target is the $127.00 level. Our second target is the $137.00-140.00 range. We are adjusting our stop loss to $113.99. The fertilizer and agriculture stocks have been very volatile so readers should consider them aggressive, higher-risk plays.

Picked on February 12 at $118.09 *gap higher entry
Change since picked: + 3.83
Earnings Date 04/03/08 (unconfirmed)
Average Daily Volume = 7.1 million

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Mosaic - MOS - close: 117.06 change: +8.10 stop: 104.45*new*

Shares of MOS were leading the charge higher. The stock rallied more than 7.4% and did so on above average volume, which is a good sign. The stock broke out to another all-time high. MOS will probably hit our second target tomorrow. MOS has already hit our initial target near $110. Our second target is the $118.00-120.00 zone. Again, these are very volatile stocks with a lot of intraday spikes. We would consider this a more aggressive, higher-risk play. Please note that we are adjusting our stop loss to $104.45. FYI: The Point & Figure chart suggests a $131 target. More aggressive traders may want to aim past the $120 zone. Then again keep in mind that MOS is up six weeks in a row.

Picked on February 12 at $101.83 *gap higher entry
Change since picked: +15.23
Earnings Date 04/09/08 (unconfirmed)
Average Daily Volume = 5.8 million

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Nucor - NUE - close: 66.78 change: +0.93 stop: 59.95

NUE continues to rally with shares hitting another new relative high. Our target is the $68.00-70.00 zone since the $70.00 level is likely to be significant resistance. The P&F chart is bullish with a $76 target.

Picked on February 17 at $ 62.01
Change since picked: + 4.77
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 5.0 million

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Petroleo Brasileiro - PBR - cls: 119.90 chg: +1.35 stop: 111.90

PBR lagged behind the rest of the oil sector today but the trend is still bullish. If you prefer buying on momentum then look for a new relative high over $120 as your entry point. Currently, our target is the $128.00-130.00 range. The move over $116 has produced a new Point & Figure chart buy signal. Actually it is a quadruple-top bullish breakout buy signal with a $150 target (it was a $138 target two weeks ago). 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 12 at $116.00 *triggered
Change since picked: + 3.90
Earnings Date 02/12/08 (unconfirmed)
Average Daily Volume = 7.6 million

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Potash - POT - close: 164.28 change: +7.28 stop: 147.75 *new*

POT is another fertilizer play that turned in a big day. The stock rallied 4.6% and broke through potential resistance at the $160 mark. We are adjusting our stop loss to $147.75. More conservative traders may want to take some profits here. The stock has already hit our first target in the $158-160 zone. Our second, more aggressive target is the $168.00-170.00 zone. More aggressive traders may want to aim significantly higher. The Point & Figure chart is forecasting a $222 target. Again, this is a very volatile stock. Readers should consider it an aggressive, higher-risk trade.

Picked on February 12 at $147.50 *triggered
Change since picked: +16.78
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 5.9 million

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Shaw Group - SGR - close: 66.14 change: +1.61 stop: 58.45

SGR is off to a good start with a 2.49% gain and a new six-week high. We don't see any changes from our weekend comments. Shares have cleared their 100-dma and look poised to rally toward $70. We are listing two targets. Our first target is the $69.50-70.00 zone. We suggest closing most of your position there. Our second, more aggressive target is the $74.00-75.00 range. The Point & Figure chart is very bullish with an $81 target. FYI: More conservative traders may want to use a stop loss closer to $60.00.

Picked on February 24 at $ 64.53
Change since picked: + 1.61
Earnings Date 04/08/08 (unconfirmed)
Average Daily Volume = 1.8 million

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Smith Intl - SII - close: 63.50 change: +1.17 stop: 58.45

Target achieved. Oil service stocks performed very well today. While SII may have under performed its peers the stock managed to breakout over the $64.00 level and hit our first target in the $64.25-65.00 zone. The intraday high this afternoon was $64.46. Bulls now have to power through resistance near $65.00 and its 50 and 100-dma. Our second target is the $68.00-70.00 zone. We would expect SII to pull back initially when it hits $65.00. The P&F chart for SII is very bullish with an $80 target (it was a $77 target last week).

Picked on February 17 at $ 60.52
Change since picked: + 2.98
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 3.5 million

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MEMC Electr. - WFR - cls: 81.41 chg: -0.14 stop: 77.45

It was a rocky, up and down day for WFR. The stock started lower after being downgraded before the opening bell. At the end of the day WFR closed down with a fractional loss. However, that may change tomorrow. Rival LDK Solar (LDK) reported earnings after the closing bell tonight and the stock was trading higher after hours markets. If investors are buying the news then WFR might be able to breakout tomorrow as well. Our suggested entry point to buy WFR calls is $82.55, which would be a breakout higher. We have two targets. Our first target is the $89.00-90.00 range and we suggest readers close out the majority of their position here. Our second, more aggressive target is the $94.00-95.00 range near its December highs.

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 5.9 million

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Yahoo! Inc. - YHOO - close: 28.13 change: -0.29 stop: n/a

YHOO continues to languish. The ongoing drama over MSFT's hostile bid is casting a pall over both stocks. The current consensus on the street, if there is a consensus, is that YHOO will eventually accept MSFT's bid. The real question is will they accept the $31/share bid or will they negotiate MSFT higher, say in the $33-34-35 zone. Some have speculated that MSFT is pursuing a proxy fight with YHOO's board because it is cheaper than raising their bid for the company. Our directional call play is a very speculative gamble that MSFT will raise its bid and that this news will come out in the next four weeks. There is plenty of risk and MSFT could decide to walk away or YHOO could do something stupid and poison any deal that kills the share price.

Picked on February 17 at $ 29.66
Change since picked: - 1.53
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 54 million
 

Put Updates

Ambac Fincl. - ABK - cls: 12.41 change: +1.70 stop: n/a

No deal yet but word on the street is that the banks, the agencies and ABK are definitely getting close. What boosted the market late this afternoon was S&P reaffirming their triple A rating on both ABK and MBI. Yet at the same time we saw multiple, contradictory stories about whether or not S&P did or did not keep ABK and MBI on their negative creditwatch, which means they were at risk for a downgrade. Volume in ABK is definitely picking up as traders place bets on whether not a bailout will get done. We are not suggesting new positions at this time. Previously we had been suggesting the May out-of-the money puts and a speculative out-of-the money March ($20) call as a hedge should a bailout plan come to pass.

Picked on January 27 at $ 11.54
Change since picked: + 0.87
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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W.W.Grainger - GWW - close: 75.93 chg: +1.16 stop: 78.26

GWW rallied right to short-term resistance near $76.00. If you're bullish then today's close over the 10-dma is a positive sign. More conservative traders might be tempted to tighten their stops toward the $77.00 level. If the market breaks out higher from its current consolidation we would expect to be stopped out at $78.26. We are not suggesting new puts at this time. Our target is the $70.75-70.00 zone.

Picked on February 10 at $ 76.65
Change since picked: - 0.72
Earnings Date 04/16/08 (unconfirmed)
Average Daily Volume = 1.0 million

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iShares DJ Financial - IYF - cls: 88.96 chg: +1.04 stop: 90.65*new*

The bond insurer news is lifting the financials. The IYF is bouncing to the top of its recent trading range. Short-term technical oscillators are edging higher and suggesting a bullish breakout over $90.00 soon. We're actually going to tighten our stop loss down to $90.65, which is still above the 50-dma. Our risk is that we get stopped out on an intraday spike but that's better than seeing the sector explode on some truly good news (a.k.a. acceptable bond-insurer bailout). We are not suggesting new puts at this time. Our official target is the $81.00-80.00 zone.

Picked on February 06 at $ 88.62
Change since picked: + 0.34
Earnings Date 00/00/00
Average Daily Volume = 1.1 million

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MBIA Inc. - MBI - close: 14.58 change: +2.40 stop: n/a

MBI popped almost 20% on the progress bond insurers are making. The news from S&P about the ratings agency reaffirming the triple-A rating for MBI is "good" news but again we saw multiple, conflicting stories about whether or not MBI was on negative creditwatch (for a potential downgrade). It would seem contradictory to affirm the AAA rating and keep them on creditwatch. Meanwhile, after the closing bell, MBI announced it was canceling its dividend and that the Board of Directors had made the decision to split its company into two divisions, separating the municipal bond business, within five years. In a letter to shareholders MBI also said that they had "ceased ensuring new derivative credit contracts from our insurance companies"... and "have suspended the writing of all new structured finance business for approximately six months." There is still no deal yet but we're not suggesting new positions at this time. We had been suggesting the out-of-the-money May puts and a March $22.50 (or $20.00) call as a hedge in case a bailout plan for the bond insurers does get done.

Picked on January 27 at $ 14.20
Change since picked: + 0.38
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 15.2 million

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Mohawk Ind. - MHK - cls: 74.66 chg: -0.02 stop: 78.05

MHK continues to under perform the market. The stock struggled with resistance near $75.00 today. We remain bearish but would hesitate to open new put plays if the broader market rallies tomorrow. Wait and watch for a failed rally before considering new put plays. There is potential support at $70.00 but we're aiming for the $66.50-65.00 zone near its January 2008 bottom.

Picked on February 14 at $ 73.70
Change since picked: + 0.96
Earnings Date 02/13/08 (confirmed)
Average Daily Volume = 907 thousand

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Sears Holding - SHLD - cls: 99.08 chg: +2.54 stop: 100.76 *new*

It was a bullish day for SHLD, which bounced right back toward resistance near $100 and its 50-dma around $100.70. If the broader market averages can breakout higher tomorrow then short covering will likely push SHLD through its bearish trend of lower highs and end this play. However, just to make sure we don't get taken out on an intraday spike (or at least reduce our chances) we are adjusting the stop loss to $100.76, which is just north of the 50-dma. We would only consider new puts if SHLD produced a clear failed rally from here. Otherwise wait for a new relative low. Bear in mind that we plan to exit on Wednesday at the closing bell to avoid holding over earnings on Thursday.

Picked on February 22 at $ 94.75 *triggered
Change since picked: + 4.33
Earnings Date 02/28/08 (confirmed)
Average Daily Volume = 3.0 million

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Legacy Vulcan - VMC - cls: 69.86 chg: +1.60 stop: 70.86

We don't like the way things are shaping up in VMC. The stock's bounce has short-term oscillators starting to look bullish. If the market can breakout higher then VMC will likely breakthrough resistance near $70.00 and hit our stop loss. More conservative traders may want to consider exiting early right here to cut your losses. The stop loss is a little bit wider than we would like but VMC can see some big $3-$4 swings intraday so readers should consider this an aggressive, higher-risk play.

Picked on February 17 at $ 66.64
Change since picked: + 3.22
Earnings Date 04/30/08 (unconfirmed)
Average Daily Volume = 2.1 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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CROCS Inc. - CROX - close: 25.04 chg: -0.39 stop: n/a

CROX continues to be shunned by traders. The stock lost another 1.6% and completely ignored the market's rally today. We are not suggesting new strangles at this time. The options we had suggested were the March $40 calls (CQJ-CH) and the March $25 puts (CQJ-OE). Our estimated cost was $2.50 and we wanted to sell if either option hits $4.25 or higher.

Picked on February 17 at $ 33.43
Change since picked: - 8.39
Earnings Date 02/19/08 (confirmed)
Average Daily Volume = 5.2 million

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Genentech - DNA - close: 77.96 change: +6.36 stop: n/a

DNA shot higher following the late Friday FDA news and approval for Avastin to treat breast cancer. The stock added 8.8% and hit an intraday high of $79.40. Unfortunately, the March $75 calls (DWN-CO) only hit a high of $4.80. We were looking for a $5.00 exit. More conservative traders may want to exit now with the March $75 calls trading at $3.60bid/$3.80ask. We are not suggesting new positions. The options we had suggested were the March $75 calls (DWN-CO) and the March $70 puts (DWN-ON). Our estimated cost was $2.80. We want to sell if either option hits $5.00 or higher.

Picked on February 20 at $ 72.37
Change since picked: + 5.59
Earnings Date 04/10/08 (unconfirmed)
Average Daily Volume = 3.5 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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