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Call Updates

General Dynamic - GD - close: 84.39 chg: -1.71 stop: 82.99

Ouch! A very uncooperative market on Friday has hammered shares of GD back into its trading range. The stock spiked to $86.90, near its 100-dma and reversed as the market turned south. Friday's reversal now makes the breakout look like a bull trap. Technically the failure to hold broken resistance at $85.00 as support is good enough for more conservative readers to just abandon ship right here. On the other hand GD did manage to bounce near $83.50 and its 200-dma. We would look for a new rise past $85.25 as an entry point to buy calls. You might want to consider adjusting your stop loss toward $83.50. We are setting two targets. Our first, short-term target is the $89.75-90.00 range since the $90 mark would be natural, round-number resistance. Our second target is the $93.00-94.00 zone near its highs. We do not want to hold over the late April earnings report.

Suggested Options:
If GD provides a new entry point above $85.25 we would consider the April calls.

Picked on March 13 at $ 86.10
Change since picked: - 1.71
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 2.1 million

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Ingersoll Rand - IR - close: 43.15 change: -1.13 stop: 40.85*new*

IR ended the week with a small gain but the upward momentum is struggling a bit. Shares have tried multiple times to try and breakout past its 100-dma near $44.75. On the bullish side of things the stock continues to have a positive pattern of higher lows. However, if the market does breakdown to new relative lows we would expect IR to roll over. The $40 level should be decent support but we're going to try and reduce our risk by adjusting the stop loss to $40.85. The $41.00 level is another level of support. We would hesitate to open new bullish positions at this time. Our target is the 47.00-47.50 zone.

Suggested Options:
We are not suggesting new bullish positions at this time.

Picked on March 09 at $ 42.87
Change since picked: + 0.28
Earnings Date 04/20/08 (unconfirmed)
Average Daily Volume = 5.5 million

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Mosaic - MOS - close: 107.23 change: -1.70 stop: 99.89

Friday was a rough day for the bulls and we may be seeing one of our worst case scenarios with MOS, which is being filled on an intraday spike higher only to see it immediately reverse lower on us. Shares actually gapped open at $111.25. Our suggested entry point was $111.00. The stock hit $112.40 and then turned tail and fled. At this point we have a couple of choices. If you're really worried about where the market is headed following Friday's performance then consider an early exit now and just cut your losses. We are going to suggest that readers wait for a new rally over $110.50 or a bounce in the $100.00-102.50 zone as potential entry points to buy calls on MOS. Remember, this is an aggressive, higher-risk play and the stock can be very volatile. We have two targets. Our first target is the $119.50-120.00 zone. Our second target is the $135.00-140.00 zone. Please note that we do not want to hold over the early April (unconfirmed) earnings report.

Suggested Options:
If MOS provides a new bullish entry point we would suggest the April calls.

Picked on March 14 at $111.25 *triggered/gap open
Change since picked: - 3.77
Earnings Date 04/03/08 (unconfirmed)
Average Daily Volume = 7.0 million

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Potash Corp. - POT - cls: 160.46 chg: +0.06 stop: 149.00

The action in POT is similar to the trading in MOS. The stock did trade higher on Friday morning and POT did hit our suggested entry point to buy calls at $162.75. POT traded to an intraday high of $165.00 before succumbing to profit taking. The trend in POT continues to be bullish but if the market sees any sort of washout event then we do expect the stock to suffer. Such an event will probably be another entry point to buy calls. We would be watching POT's 100-dma if and when the market finally sees any capitulation. In the mean time we would look for a dip into the $157-155 zone or a new rise into or past the $163-165 range as potential entries points. Our target is the $178.00-180.00 zone. We will consider adding a second, more aggressive target as the play progresses. Remember, these stocks can be very volatile and see some huge intraday swings. We have to label this an aggressive, higher-risk play.

Suggested Options:
If POT provides a new entry point we would suggest the April calls.

Picked on March 14 at $162.75 *triggered
Change since picked: - 2.29
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 7.5 million

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Research In Motion - RIMM - cls: 101.69 chg: -3.96 stop: 94.49

RIMM gave back the majority of its Thursday gains with a 3.7% decline on Friday. Traders did buy the dip at $100 on Friday afternoon but we would remain cautious here. The market's recent performance concerns us and we would hesitate to open new bullish positions in RIMM. However, if you're bullishly inclined then the dip to $100 would be a new entry point. Readers could try using a tight stop under $100 but if the market sees any follow through lower on Monday you would probably be stopped out. We're going to leave our stop loss at $94.49 for now and see if RIMM can hold in the $95-105 region. Our short-term target is the $110.00-112.00 zone.

Suggested Options:
We are not suggesting new positions in RIMM at this time.

Picked on March 11 at $100.74
Change since picked: + 0.95
Earnings Date 04/02/08 (confirmed)
Average Daily Volume = 25 million

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Yahoo! Inc. - YHOO - close: 26.71 change: -0.79 stop: n/a

What in the world is going on with YHOO? Friday's move lower almost makes sense because MSFT, who's trying to acquire YHOO, saw it's own stock slip 2.3%. YHOO plunged 2.8% and is nearing its own 200-dma. Unfortunately, technicals don't matter much for YHOO since we're trying to play the merger. We already reported that Thursday's drop in YHOO was due to rumors of a hedge fund needing to (or wanting to) unload a large block of shares. This week's drop has murdered the March calls and with just four days left before March calls expire odds are looking bleak for the bulls. You could speculate on MSFT raising its bid with the April calls but we're growing less enthusiastic by the day with this play so we're not suggesting new positions.

Suggested Options:
We are not suggesting new positions in YHOO.

Picked on February 17 at $ 29.66
Change since picked: - 2.95
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 54 million
 

Put Updates

Ambac Fincl. - ABK - cls: 6.22 change: -0.41 stop: n/a

ABK continues to sink and shares lost another 6% on Friday. The path of least resistance continues to be down. ABK management tried to soothe investor fears on Friday. The CEO of the company issued a letter to shareholders saying that ABK has over $15 billion available to pay for claims should the need arise. It doesn't look like the letter worked. The market is still very fearful of the financial sector. We are not suggesting new ABK 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.

Suggested Options:
We are not suggesting new positions in ABK.

Picked on January 27 at $ 11.54
Change since picked: - 5.34
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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Cytec Ind. - CYT - close: 54.32 chg: -1.18 stop: 57.15

The action in CYT continues to look bearish. The stock produced a bearish engulfing candlestick pattern on Friday. We would still consider new put positions here or on another drop below $54.00. More conservative traders might want to move their stop closer to the $56 region. The $50.00 level looks like nearest support so we are targeting a drop into the $50.25-50.00 zone.

Suggested Options:
We would suggest the April puts.

Picked on March 09 at $ 54.72
Change since picked: - 0.40
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 601 million

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Express Scripts - ESRX - cls: 56.43 chg: -1.46 stop: 60.55*new*

ESRX slipped to new four-month lows this past week. The stock has found new short-term support near $56.30 but shares look poised to plunge lower again. While ESRX is nearing our first target in the $55.50-55.00 zone we would still consider new positions. The second target is the $51.50-50.00 range. Our biggest concern with ESRX would be more of an oversold bounce in the healthcare sector. HUM and WLP were just pummeled senseless this past week and if the market sees any sort of bounce this group could find bargain hunters. Buying in these healthcare stocks could translate into strength for ESRX. Please note that we are adjusting the stop loss on ESRX to $60.55. 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.

Suggested Options:
We would suggest the April puts.

Picked on March 09 at $ 58.51
Change since picked: - 2.08
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 3.7 million

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FedEx - FDX - close: 84.80 change: -2.27 stop: 89.05 *new*

We are finally starting to see some movement in FDX. The stock lost about 2.6% on Friday and did so on above average volume. It's a good thing too. We're running out of time. FDX is due to report earnings on Thursday morning, March 20th. We do not want to hold over the report. If FDX doesn't hit our target first we'll plan to exit on Wednesday at the closing bell. Please note we are moving the stop loss to $89.05. Our target is the $80.50-80.00 zone. FYI: The most recent data lists short interest at 3% of the 289 million-share float.

Suggested Options:
We only have three days left so we're not suggesting new positions.

Picked on March 10 at $ 85.95 *triggered
Change since picked: - 1.15
Earnings Date 03/20/08 (confirmed)
Average Daily Volume = 3.1 million

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Harley-Davidson - HOG - close: 35.41 chg: -1.39 stop: 40.26

HOG reversed again on Friday. The stock produced yet another failed rally near $37.50 and closed down with a 3.7% loss. This decline followed some positive news for HOG. One Wall Street analyst actually removed HOG from its top list of stocks to "sell". The analyst suggested HOG may be nearing a bottom and the falling U.S. dollar should help HOG's international business. We remain bearish on HOG. Our more conservative traders may want to tighten their stop loss closer to the 50-dma (38.57) or the $38.00 level. We do have a very wide and aggressive stop at $40.26. 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.

Suggested Options:
We would suggest the April puts.

Picked on March 10 at $ 34.69 *triggered
Change since picked: + 0.72
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 3.1 million

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MBIA Inc. - MBI - close: 10.94 change: -0.63 stop: n/a

Let's see, another day, another decline for MBI. Shares lost more than 5% on Friday as investors fled the financials (yet again). 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.

Suggested Options:
We are not suggesting new positions in MBI.

Picked on January 27 at $ 14.20
Change since picked: - 3.26
Earnings Date 01/31/08 (confirmed)
Average Daily Volume = 15.2 million

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3M Co. - MMM - close: 77.53 change: -1.55 stop: 80.25

MMM performed as expected. The stock failed near resistance around $80 and headed lower. We would still consider new put positions right here. 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.

Suggested Options:
We are suggesting the April puts.

Picked on March 09 at $ 76.51
Change since picked: + 1.02
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 4.3 million

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NII Holdings - NIHD - close: 32.66 change: -1.44 stop: 38.25*new*

NIHD lost more than 4% on Friday and sank to new multi-year lows. Shares are quickly nearing our second, more aggressive target in the $31.00-30.00 range. Readers can choose to start taking profits at any time now. We're lowering our stop loss to $38.25. NIHD is very short-term oversold and way overdue for a bounce. Truly nimble traders could trying playing calls on a bounce near $30. 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.

Suggested Options:
We are not suggesting new positions on NIHD.

Picked on March 04 at $ 38.95 *triggered
Change since picked: - 6.29
Earnings Date 02/27/08 (confirmed)
Average Daily Volume = 3.3 million

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Sears Holding - SHLD - close: 95.07 change: +0.49 stop: 100.51

Relative strength in shares of SHLD on Friday was a mystery. The stock actually appeared to be moving higher on Friday afternoon. We would take a step back and wait for this bounce to fail before considering new put positions. 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.

Suggested Options:
If SHLD provides a new entry point we would suggest the April puts.

Picked on March 06 at $ 94.00 *triggered
Change since picked: + 1.07
Earnings Date 02/28/08 (confirmed)
Average Daily Volume = 2.8 million

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Wynn Resorts - WYNN - close: 96.67 chg: -0.59 stop: 100.51

It has been a rocky week for WYNN. Friday marked the third day in a row that the stock bounced around the $92.50-98.00 zone. Lack of any follow through lower in spite of the market's apparent weakness on Friday is a real warning signal for the bears in WYNN. Fundamentally WYNN's stock should be struggling if we're facing a consumer-lead recession in the U.S. Why someone would be buying it in the $91-93 level is a surprise. WYNN doesn't appear to have any real support until $85. The overall trend remains bearish so we're going to stick with the plan. However, more conservative traders might want to consider a stop loss near $98.50 to reduce their risk. We'd rather give WYNN room to maneuver with our stop at $100.51. We're not suggesting new put plays at this time. Our target was the $86.50-85.00 zone. The P&F chart is bearish with a $64 target.

Suggested Options:
We are not suggesting new positions at this time.

Picked on March 04 at $ 94.27 *gap down
Change since picked: + 2.40
Earnings Date 02/26/08 (unconfirmed)
Average Daily Volume = 2.2 million
 

Strangle Updates

None
 

Dropped Calls

Goldman Sachs - GS - close: 156.86 chg: -8.58 stop: 154.99

The Bear Stearns (BSC) fiasco has seriously undermined any confidence in the broker-dealers and the rest of the financial services industry. Shares of GS reacted with another volatile session (almost a $13 intraday range) and a bearish engulfing candlestick pattern. The intraday low was $155.00. While there is a chance that GS will bounce on Monday we are suggesting an early exit. GS is due to report earnings on Tuesday morning.

We considered playing some sort of neutral strategy on GS to hold over earnings. Unfortunately, the volatility is so high right now that the options are very expensive. A straddle at the $155 strike would cost about $25.00 for April options. A strangle, using options $20 out, would still cost more than $10. These seem too expensive.

If you really want to speculative on a big move in GS then consider some deep out of the money puts or calls in March. They're cheap because there are only four days left. Friday, March 21st is a market holiday. This type of bet is essentially gambling. If GS doesn't move $20 or more on Tuesday your option will probably expire worthless!

Picked on March 11 at $163.07 /exiting early $156.86
Change since picked: - 6.21
Earnings Date 03/18/08 (confirmed)
Average Daily Volume = 12.5 million
 

Dropped Puts

Everest Re Group - RE - close: 89.83 chg: -3.54 stop: 98.26

Target surpassed. Actually RE has surpassed our second, more aggressive target in the $91.00-90.00 zone. Fear in the financial sector on Friday sent RE to an intraday low of $89.36. The $90 level looks like potential support so if you have not exited yet we would suggest extra caution here. Our first target was at $93.50.

Picked on February 28 at $ 97.93 /2nd target surpassed 89.36
Change since picked: - 8.10
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 487 thousand
 

Dropped Strangles

None
 

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