Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Ingersoll Rand - IR - close: 41.22 change: -1.65 stop: 39.74

The market continues to slide and investors are looking for stocks to sell where they can still lock in a gain. IR fit the bill after last week's relative strength. We cautioned readers over the weekend that they may have wanted to wait for a dip into the $42.00-41.00 region. IR actually gapped open lower at $41.94 not the $42.90 that many quote services are listing. IR is now testing short-term support near $41.00 but we don't expect it to hold. Wait for the stock to slip to its 50-dma around $40.50 or dip to the $40.00 region before considering call positions. Better yet wait for the bounce to start before considering call positions. There is potential resistance near $45.00 and its 100-dma but our target is the 47.00-47.50 zone.

Picked on March 09 at $ 42.87
Change since picked: - 1.65
Earnings Date 04/28/08 (unconfirmed)
Average Daily Volume = 5.5 million

---

Yahoo! Inc. - YHOO - close: 28.51 change: -0.52 stop: n/a

Last week one of the rumors was that YHOO was talking with News Corp. as an alternative to merging with Microsoft (MSFT). That dream was shattered today as News Corp. management said they were not going to get into a bidding war with MSFT. Shares of YHOO traded lower on the session. We need to see a higher bid from MSFT before March expiration (unless you've bought the April calls). This remains a very risky, aggressive bet. Our suggested calls were the March $30 or March $32.50 strikes. If you want to speculate now we would choose the April strikes. MSFT's current bid is $31 a share and the street expects that they will raise their bid into the $33-35 zone.

Picked on February 17 at $ 29.66
Change since picked: - 1.15
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 54 million
 

Put Updates

Ambac Fincl. - ABK - cls: 7.29 change: -2.21 stop: n/a

What the market giveth the market can taketh away! Yes, the +20% move that was widely reported in ABK on Friday has been reversed with a sharp drop lower again. Our readers know that the trade at $9.50 was actually after hours on Friday. Financials continue to poison the markets and investor psychology. ABK helped lead the group lower after a Citigroup analyst issued negative comments on last week's $1.5 billion sale by ABK to raise funds. We are not suggesting new positions at this time. This remains a very speculative play. We will definitely hold over the April earnings if we get the chance. Previously we had been suggesting the May out-of-the money puts ($5.00 and $2.50 strikes) and an optional 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: - 4.25
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

---

Cytec Ind. - CYT - close: 53.94 chg: -0.78 stop: 58.15

CYT continues to slip following Friday's breakdown. We don't see any changes from our weekend comments. The P&F chart is bearish with a $48 target. We don't have the best risk:reward ratio with our wide stop loss but $58 is the nearest resistance. The $50.00 level looks like nearest support so we are targeting a drop into the $50.25-50.00 zone.

Picked on March 09 at $ 54.72
Change since picked: - 0.78
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 601 million

---

Express Scripts - ESRX - cls: 58.78 chg: +0.27 stop: 63.55

ESRX displayed some relative strength today. Shares actually closed higher amidst a sea of red. The trend is still bearish. We would still consider new put positions (only after you have considered the play editor's notes) here or on a failed rally near $60.00. It looks like it's time for another leg lower. We are listing two targets. Our first, short-term target is the $55.50-55.00 zone. Our second, more aggressive target is the $51.50-50.00 zone. Currently the P&F chart is bearish with a $54 target. FYI: The most recent data listed short interest at 3.8% of the 251 million-share float, which is about 3.4 days worth of short interest.

Picked on March 09 at $ 58.51
Change since picked: + 0.27
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 3.7 million

---

FedEx - FDX - close: 84.97 change: -1.73 stop: 90.05

FDX has now broken support at $86.00 and shares hit our suggested trigger to buy puts at $85.95. The play is open. Our target is the $80.50-80.00 zone. We are playing with a relatively wide (aggressive) stop loss at $90.05. You may want to use a tighter stop. Currently the P&F chart is bearish with an $82 target. FYI: The most recent data lists short interest at 3% of the 289 million-share float.

Picked on March 10 at $ 85.95 *triggered
Change since picked: - 0.98
Earnings Date 03/20/08 (unconfirmed)
Average Daily Volume = 3.1 million

---

Harley-Davidson - HOG - close: 34.68 chg: -0.37 stop: 40.26

HOG has now broken support near $35.00 and hit new multi-year lows. Our suggested entry point to buy puts was at $34.69. The play is open. Our target is the $30.50-30.00 zone although it wouldn't surprise me to see a drop closer to $25. The P&F chart is bearish with a bearish triangle breakdown sell signal. FYI: The most recent data lists short interest at 9.6% of the 236 million-share float. That is an above average amount of short interest and raises our risk of a short squeeze.

Picked on March 10 at $ 34.69 *triggered
Change since picked: - 0.01
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 3.1 million

---

iShares Transportation - IYT - cls: 79.08 chg: -1.47 stop: 82.55

Another big move higher in crude oil (to $108/bbl) is pushing transports lower. The IYT confirmed its breakdown under $80.00 and reinforced the move with a failed rally at its 50-dma. Our suggested entry point to buy puts was at $79.25. The play is open. Our target is the $75.00-74.00 zone. The IYT might find short-term support near $77.50 but it should only be temporary. The Point & Figure chart is bearish with a catapult breakdown sell signal and a $75 target.

Picked on March 10 at $ 79.25 *triggered
Change since picked: - 0.17
Earnings Date 00/00/00
Average Daily Volume = 1.7 million

---

MBIA Inc. - MBI - close: 10.77 change: -1.22 stop: n/a

MBI lost more than 10% on Monday. We're surprised the stock wasn't lower given the shenanigan MBI tried to pull after the closing bell on Friday. MBI asked ratings agency Fitch to stop rating some of MBI's businesses. MBI appears to be on the verge of breaking under the $10 level. We're not suggesting new bearish positions at this time. We had been suggesting the out-of-the-money May puts (7.50, 5.00 and 2.50 strikes) and an optional March $22.50 (or $20.00) call as a hedge in case a bailout plan for the bond insurers does get done. We will definitely hold over the April earnings if we get the chance.

Picked on January 27 at $ 14.20
Change since picked: - 3.43
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 15.2 million

---

3M Co. - MMM - close: 75.48 change: -1.03 stop: 80.25

The weakness in MMM continues. The stock is nearing potential round-number support at $75.00. Readers should expect a bounce but a failed rally in the $77.00-79.00 zone can be used as a new entry point for puts. We have set two targets. The first target is the $72.25 level, just above the January 2008 lows. Our second target is the $68.00 level, which should be closer to the bottom edge of MMM's bearish channel. The P&F chart is currently bearish with a $62 target. FYI: The most recent data lists short interest at just 1.5% of the 707 million-share float.

Picked on March 09 at $ 76.51
Change since picked: - 1.03
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 4.3 million

---

NII Holdings - NIHD - close: 34.40 change: -2.57 stop: 40.05*new*

Target exceeded! Shares of NIHD got clobbered today. The stock sank to new multi-year lows and ended with a 6.9% loss. Our first target was the $35.50-35.00 range. Our second, more aggressive target is the $31.00-30.00 zone. We are adjusting our stop loss to $40.05. The Point & Figure chart is bearish with a $19 target. FYI: The latest data lists short interest at 3.8% of the 171.7 million-share float, which is only about 1.5 days worth of short interest.

Picked on March 04 at $ 38.95 *triggered
Change since picked: - 4.55
Earnings Date 02/27/08 (confirmed)
Average Daily Volume = 3.3 million

---

Praxair Inc. - PX - close: 77.74 chg: -1.36 stop: 81.05

Shares of PX were actually upgraded today but the news did not stop the weakness. Shares continued lower and broke down under the $78.00 level of support. Our suggested entry point to buy puts was $77.90 so the play is now open. Our target is the $73.00-72.50 zone. More aggressive traders could aim for $70.00 near its January lows. The P&F chart is bearish with a $73 target. FYI: The most recent data lists short interest at just 1% of the 312 million-share float.

Picked on March 10 at $ 77.90 *triggered
Change since picked: - 0.16
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 2.4 million

---

Everest Re Group - RE - close: 93.14 chg: -0.71 stop: 100.35

RE actually tried to rally midday but the rebound faded near $95.00. If shares weren't already so close to our targets this would look like a new entry point for puts. We are adjusting our stop loss to $98.26. The stock has already hit our first target at $93.50. The intraday low on Friday was $92.50. Our second, more aggressive target is the $91.00-90.00 zone. FYI: The P&F chart is bearish with a $74 target.

Picked on February 28 at $ 97.93 /1st target surpassed 92.66
Change since picked: - 4.79
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 487 thousand

---

Sears Holding - SHLD - close: 91.00 change: -1.36 stop: 100.51

SHLD is still sinking. The stock lost another 1.4% today. We don't see any changes from our previous comments. The stock could bounce near round-number support at $90.00 but we would expect it to be temporary. Our target is the $85.50-85.00 zone. There are a lot of investors who believe SHLD is going lower. The most recent data puts short interest at more than 19% of the 65 million-share float. That is almost 7 days worth of short interest. Naturally that raises our risk of a short squeeze.

Picked on March 06 at $ 94.00 *triggered
Change since picked: - 3.00
Earnings Date 02/28/08 (confirmed)
Average Daily Volume = 2.8 million

---

Wynn Resorts - WYNN - close: 91.41 chg: -1.41 stop: 100.51

We don't see any changes from our weekend comments. WYNN continues to look vulnerable here. The June 2006 low is near $85.50. We are listing a target in the $86.50-85.00 zone. Traders need to be prepared for a bounce near round-number support at $90 but we would expect it to be temporary. Now that most market participants agree that we're in a recession shares of WYNN could see increased selling pressure. Another failed rally in the $95-97 zone can be used as a new entry point for puts. Note our stop loss, which is a little aggressive, at $100.51. The P&F chart is bearish with a $64 target.

Picked on March 04 at $ 94.27 *gap down
Change since picked: - 3.69
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 2.2 million
 

Strangle Updates

None
 

Dropped Calls

None
 

Dropped Puts

Precision Castparts - PCP - cls: 99.90 chg: -4.10 stop: 110.51

Target exceeded! PCP's sell-off continued into Monday. The stock lost about 4% and actually closed under what could have been round-number, psychological support at the $100 level. Our target was the $101.00-100.00 zone. More aggressive traders may want to aim for the $95 region. The Point & Figure chart is forecasting an $80 target (was $88).

Picked on March 03 at $109.49 *triggered/target exceeded
Change since picked: - 9.59
Earnings Date 05/08/08 (unconfirmed)
Average Daily Volume = 1.9 million
 

Dropped Strangles

None
 

Play Update Archives