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Call Updates

CNOOC - CEO - cls: 171.30 chg: -2.56 stop: 159.49

Chinese state-owned CEO slipped on Thursday in spite of strength in the OIX and OSX oil indices and another new high for crude oil futures. The pull back near $170 looks like another entry point for investors to buy calls but so would a dip into the $168-165 zone so you may want to be patient here. We are listing two targets. Our first target is the $188.00-190.00 zone. Our second target is the $208-210 zone. We would expect some resistance and a pull back on CEO's initial test of the $185 region and the $200 region. Our $208 price target is pretty aggressive given our three to four week time frame. We do not want to hold over earnings. Plan on exiting the majority of the position at the first target. FYI: In the news today an Associated Press article ran a story about CEO and how the company kept silent today on a deal with Iran. According to the AP article CEO negotiated a deal with Iran with $16 billion to develop the North Pars field, which is believed to hold upwards of 80 trillion cubic feet of natural gas. The deal, announced months ago, was expected to be signed today. The only reason this is real "news" is that the U.S. claims it might violate U.N sanctions with Iran.

Picked on February 26 at $170.73
Change since picked: + 0.57
Earnings Date 03/19/08 (unconfirmed)
Average Daily Volume = 509 thousand

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CF Industries - CF - close: 126.22 change: +1.34 stop: 117.45

CF provided a little bit of a bounce today with a 1% gain, out performing the S&P 500. We remain bullish with the stock above $120. If you're feeling conservative then consider a tighter stop near $120. 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: + 5.19
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 2.8 million

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iShares China 25 - FXI - cls: 150.49 chg: -3.90 stop: 149.45

FXI is consolidating sideways under its 200-dma but it was flirting with a significant bullish breakout yesterday. We are suggesting readers buy calls at $161.01. If we are triggered our target is the $178.00-180.00 zone although we'll have to keep a wary eye on potential resistance at the 100-dma. FYI: Nimble traders may want to consider buying dips near $150-148 if you get the chance and use a stop loss under the recent lows (around $142-143).

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 7.8 million

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Humana Inc. - HUM - close: 71.25 change: -0.63 stop: 67.75

Right on cue shares of HUM pulled back for us hitting an intraday low of $70.52. We were suggesting readers buy a dip in the $71.00-70.00 zone. If you missed the entry point earlier today we would still consider new call positions now. Overall we don't see any changes from our previous comments. We have two targets. Our first target is the $74.75-75.00 range. Our second target is the $78.00-80.00 zone but HUM will have to power through technical resistance near $75.00, its 100-dma and 50-dma to reach our second target. The P&F chart is bullish. It just produced a new triple-top breakout buy signal with an $83 target.

Picked on February 28 at $ 71.00 *triggered
Change since picked: + 0.25
Earnings Date 04/28/08 (unconfirmed)
Average Daily Volume = 1.9 million

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Monsanto - MON - cls: 118.52 change: -0.75 stop: 113.99

Another dip in shares of MON looks like another opportunity to buy calls. However, if the market continues lower tomorrow then readers might get a better opportunity to buy calls in the $116-115 zone. 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: + 0.43
Earnings Date 04/03/08 (unconfirmed)
Average Daily Volume = 7.1 million

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Potash - POT - close: 162.29 change: +2.69 stop: 147.75

Traders continue to buy the dips in POT. The stock added another 1.6% today out performing the S&P 500. Our only complaint would be the lack of volume. We remain bullish but we are not suggesting new positions at this time. 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: +14.79
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 5.9 million

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Shaw Group - SGR - close: 68.29 change: +0.59 stop: 59.85

SGR continues to show relative strength but has not quite hit our first target yet. More conservative traders may want to consider a little profit taking here. We have two targets. Our first target is the $69.50-70.00 zone. Our second, more aggressive target is the $74.00-75.00 zone. The Point & Figure chart is very bullish with an $81 target.

Picked on February 24 at $ 64.53
Change since picked: + 3.76
Earnings Date 04/08/08 (unconfirmed)
Average Daily Volume = 1.8 million

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Smith Intl - SII - close: 65.75 change: +0.83 stop: 59.90

SII is displaying relative strength again. The stock added almost 1.3% and closed above 100-dma again. We remain bullish but we're not suggesting new positions at this time. The stock has already hit our first target in the $64 zone. Our second target is the $68.00-70.00 zone. 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: + 5.23
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 3.5 million

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MEMC Electr. - WFR - cls: 78.68 chg: -1.32 stop: 77.45

Another day of declines for WFR does not bode well for the bulls. WFR has pulled back toward the simple 50-dma again and looks poised to breakdown. More conservative traders may want to exit early now to cut their losses or tighten their stops toward $78.00. We suspect that if the major market averages are weak tomorrow then it's almost guaranteed that WFR will see more selling pressure and hit our stop loss. Some positive comments from an analyst firm about WFR today, including a reiteration of their triple-digit price target, was not enough to spark any buying pressure. If WFR surprises us and moves higher then look for a new rally over $81.00 or $82.00 before considering new call positions. 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 26 at $ 82.55 *triggered
Change since picked: - 3.87
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 5.9 million

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Yahoo! Inc. - YHOO - close: 28.15 change: -0.22 stop: n/a

There were plenty of rumors flying about YHOO, MSFT and GOOG today. Yet none of the rumors were enough to spark any real movement in shares of YHOO. One rumor and the one we're more likely to believe is that YHOO is finally in "talks" with MSFT about how to bring this merger together. The second rumor was that GOOG might buy a 20% stake in YHOO just to block the MSFT deal. We have less than four weeks before March options expire. Right now we're speculating that MSFT will raise its bid before expiration. This remains a very risky, aggressive bet. Our suggested calls were the March $30 or March $32.50 strikes.

Picked on February 17 at $ 29.66
Change since picked: - 1.51
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 54 million
 

Put Updates

Ambac Fincl. - ABK - cls: 11.80 change: -0.27 stop: n/a

Lack of new headlines to fuel the hopes of a bond insurer bailout left shares of ABK slipping lower. The stock dropped to an intraday low of $10.80 before paring its losses. Tomorrow, the last day of February, could be interesting. A few weeks ago tomorrow was the unofficial deadline for some sort of bailout plan to get done before the rating agencies downgraded the bond insurers. That may or may not happen considering the recent "affirmations" by S&P and Moody's. 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: + 0.26
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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MBIA Inc. - MBI - close: 14.06 change: -0.79 stop: n/a

More of the same with MBI. The stock dropped over 5% as a lull in the bailout/rescue news left nothing to spur the buyers on. There is still a very strong camp that believe MBI and ABK are going down and going down hard in spite of the recent capital infusions. It's tough to really say at this point but we're still betting with the bears. 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: - 0.14
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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CROCS Inc. - CROX - close: 25.13 chg: +0.38 stop: n/a

CROX is still trying to produce an oversold bounce and it's still struggling. We want to repeat that normally at this time in a post-earnings volatility play it's probably been too long and we need to consider an exit. However, with more than three weeks left to go we're going to stick with CROX for now. More conservative traders may want to bail out early. 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: - 8.30
Earnings Date 02/19/08 (confirmed)
Average Daily Volume = 5.2 million

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Genentech - DNA - close: 75.86 change: -0.80 stop: n/a

Ouch! The profit taking just hit three days in a row following the Monday morning pop on the Avastin-breast cancer news from Friday night. The only consolidation we can find in today's losses was the very low volume. That suggests everyone is just stepping back and waiting and what was left were a few traders still taking some money off the table. We are not suggesting new positions at this time. 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: + 3.49
Earnings Date 04/10/08 (unconfirmed)
Average Daily Volume = 3.5 million
 

Dropped Calls

Petroleo Brasileiro - PBR - cls: 124.86 chg: -0.15 stop: 114.90

PBR continues to look poised for a move higher but we chose to exit tonight at the closing bell to avoid holding over the company's earnings report. They should be announcing around 6:00 p.m. Eastern time. So far we haven't seen any news yet. We were aiming for $128.00. The best PBR could do was $125.48 yesterday. We'll be watching the post-earnings reaction for any potential plays.

Picked on February 12 at $116.00 *triggered
Change since picked: + 8.86
Earnings Date 02/12/08 (unconfirmed)
Average Daily Volume = 7.6 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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