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Call Updates

Apple Inc. - AAPL - close: 143.01 chg: +2.76 stop: 134.45 *new*

Another round of positive analyst comments about AAPL's upcoming 3G iPhone sparked another rally in the stock. Shares hit $144.65 before paring their gains in a down market. AAPL has displayed a lot of relative strength the last two weeks. We are not suggesting new positions and instead we're raising our stop. The new stop loss will be $134.45. More conservative traders will want to STRONGLY consider just taking profits right here! Our target is the $148.00-150.00 zone. More aggressive traders could aim higher, maybe $160ish. The Point & Figure chart is bullish with a $166 target.

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

Picked on March 23 at $133.27
Change since picked: + 9.74
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 48.5 million

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DryShips - DRYS - close: 62.31 chg: -3.17 stop: 59.85

We were expecting a correction in DRYS and suggested that readers buy calls on a pull back into the $63.50-62.00 zone. DRYS delivered that dip on Friday with a 4.8% decline. If you were patient and still looking for an entry point consider waiting for a dip closer to the $61.00 level and jump in around $61 instead. DRYS should find short-term support near its 10-dma and the $60.00 level. We're setting two targets. Our first target is the $67.50-70.00 range. Our second, more aggressive target is the $74.00-75.00 zone. The Point & Figure chart is very bullish with an $87 target. FYI: We're not seeing a lot of short interest but DRYS does not have a very big float, only 24.3 million shares. If there is any short interest it could probably get squeeze pretty easily.

Suggested Options:
We are suggesting the May calls although April calls would also work.

BUY CALL MAY 60.00 DQR-EL open interest=565 current ask $ 8.50
BUY CALL MAY 65.00 DQR-EM open interest=242 current ask $ 6.20
BUY CALL MAY 70.00 DQR-EN open interest=417 current ask $ 4.40

Picked on March 28 at $ 63.50 *triggered
Change since picked: - 1.19
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.6 million

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Essex Prop. Trust - ESS - cls: 111.92 chg: -0.98 stop: 109.90

The situation does not look good for ESS bulls. The stock did breakout over resistance in the $110-111 zone several days ago. We were triggered above $115 when ESS broke through its long-term trendline of lower highs. Volume was above average on the breakout through $111 and its 200-dma. Unfortunately, there was no follow through on the move past $115 as the major market indices all ran out of steam. Now ESS is testing broken resistance as support in the $111-110 region. Another concern we have is that on a short-term, intraday chart, we see a bearish head-and-shoulders pattern over the last few days that is suggesting a drop toward $105-104. We're keeping our stop under $110 and if the market continues lower on Monday and Tuesday we would expect ESS to stop us out! We're not suggesting new positions at this time. Our target is the $124.50-125.00 range. Traders should expect some resistance near $120 but it will probably be temporary. The Point & Figure chart is bullish with a triple-top breakout buy signal and a $142 target (it was a $132 target).

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

Picked on March 24 at $115.50 *triggered
Change since picked: - 3.58
Earnings Date 05/05/08 (unconfirmed)
Average Daily Volume = 408 thousand

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FPL Group - FPL - close: 61.96 chg: -1.31 stop: 59.49

Danger! Danger, Will Robinson! FPL has produced a bearish engulfing (reversal) candlestick pattern. Many of the solar and alternative energy stocks traded higher on Friday but not FPL. Shares produced a failed rally under $64.00 and promptly crashed back through its 50-dma and 200-dma. Volume was light but that is little consolation. More conservative traders will want to seriously consider an early exit right here to cut their losses. If we see follow through lower on Monday we will probably abandon ship. We're not suggesting new positions.

Suggested Options:
We are not suggesting new plays in FPL at this time.

Picked on March 27 at $ 63.55 *triggered
Change since picked: - 1.59
Earnings Date 04/30/08 (unconfirmed)
Average Daily Volume = 2.6 million

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Fluor - FLR - close: 140.35 chg: +1.96 stop: 134.45

The good news for FLR shareholders is that there was no follow through after Thursday's bearish engulfing candlestick pattern. We remain on the sidelines waiting for FLR to confirm a breakout over resistance. We're suggesting a trigger to buy calls at $146.50. The biggest challenge is controlling our risk. The stock can see huge intraday swings, which makes this a more aggressive trade. We're going to try and play it with a stop at $134.45. That might be too tight. We're setting two targets. Our first target is the $159.00-160.00 zone. Our second target is the $168.00-170.00 zone. We do not want to hold over earnings in early May.

Suggested Options:
If FLR hits our trigger at $146.50 we would use the May calls.

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/07/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Intuitive Surgical - ISRG - cls: 322.71 chg: + 0.85 stop: 316.49*new*

ISRG's ability to resist any serious profit taking the past few days is impressive. However, we're turning defensive on it and raising the stop loss to $316.49. We strongly suggest readers consider taking some profits off the table right here. If the market plunges lower ISRG will likely follow. Our target is the $339.00-340.00 zone. More aggressive traders may want to aim higher. The bullish target on the P&F chart just jumped from $360 to $456 on Monday.

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

Picked on March 23 at $300.69
Change since picked: +22.02
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Ambac Fincl. - ABK - cls: 5.81 change: -0.24 stop: n/a

News that S&P had cut FGIC's bond insurance unit to "junk" status did not help the rest of the bond insurers. ABK lost another 4% and closed under the $6.00 mark. We are not suggesting new bearish positions in ABK. 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). We may want to start thinking about taking profits as ABK nears the January lows (near $4.50).

Suggested Options:
We're not suggesting new positions in ABK.

The bounce from $5.00 is struggling.
Picked on January 27 at $ 11.54
Change since picked: - 5.73
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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Cytec Ind. - CYT - close: 53.26 chg: -0.89 stop: 54.75 *new*

It looks like the oversold bounce in CYT is rolling over. We are going to try and lower our risk by adjusting the stop loss to $54.75. This is probably a decent spot to consider buying puts again. The $50.00 level looks like nearest support so we are targeting a drop into the $50.25-50.00 zone. More aggressive traders might want to consider aiming lower.

Suggested Options:
We are suggesting the May puts.

Picked on March 09 at $ 54.72
Change since picked: - 1.46
Earnings Date 04/17/08 (unconfirmed)
Average Daily Volume = 601 million

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Garmin Ltd - GRMN - close: 56.08 chg: -2.89 stop: 61.51 *new*

GRMN plunged about 5% on Friday after one analyst firm started coverage on the stock with a "sell" rating. Sounds like they agree with us that GRMN is going to be seeing tougher competition with the growth of smart phones that come with GPS navigation included. A consumer-led recession certainly doesn't help matters. We have two targets on GRMN. Our first target is the $54.50-54.00 zone. Our second target is the $50.50-50.00 zone. We do not want to hold over the early May earnings report. FYI: The P&F chart is actually bullish, for now.

Suggested Options:
A failed rally near $58.00 might be a new entry point for puts. We are suggesting the May puts but Aprils would probably work well too.

Picked on March 27 at $ 58.97
Change since picked: - 2.89
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 4.9 million

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MBIA Inc. - MBI - close: 11.99 change: -0.51 stop: n/a

MBI dropped another 4% after news hit that S&P had downgraded FGIC's bond insurance unit to "junk" status. 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). We will definitely hold over the April earnings if we get the chance.

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

Picked on January 27 at $ 14.20
Change since picked: - 2.21
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 15.2 million
 

Strangle Updates

None
 

Dropped Calls

DIAMONDS - DIA - close: 122.23 change: -0.92 stop: 120.75

We are giving up on the rally in the DIA. The Dow Industrials was unable to build on its bullish breakout above the trendline of resistance. We're suggesting readers cut their losses in the DIA now.

Picked on March 23 at $123.11 /exit early 122.23
Change since picked: - 0.88
Earnings Date 00/00/00
Average Daily Volume = 19.1 million

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Reynolds American - RAI - close: 60.70 chg: -0.35 stop: 59.65

After some discussion by the OptionInvestor team this weekend we have run out of enthusiasm for buying the dip in RAI. The stock should still have support near $60.00 but this past week has seen shares produce another lower high in its series of lower highs. More aggressive traders may want to keep the play alive. We're disappointed with RAI's performance considering it should be a more defensive play and the market has been sliding for four days. At this time we're cutting our losses and moving on.

Picked on March 25 at $ 61.32
Change since picked: - 0.62
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 1.6 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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