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Call Updates

Aluminum Corp. of China - ACH - cls: 44.90 chg: +0.95 stop: 39.85

Aluminum-related stocks were mostly higher ahead of Alcoa's (AA) earnings report due out after the closing bell tonight. Shares of ACH rose another 2.1% as it inched closer to resistance at its 100-dma and exponential 200-dma. ACH has already hit our early target at $44.85 and today's intraday high was $46.38. Shares of ACH will probably see some profit taking tomorrow. AA missed its earnings estimate by 4 cents and that will be an excuse by traders to sell these stocks. We're not suggesting new positions in ACH at this time. You may want to raise your stop loss. Our second, more aggressive target is the $47.75-50.00 zone.

Picked on March 30 at $ 40.80
Change since picked: + 4.10
Earnings Date 03/18/08 (unconfirmed)
Average Daily Volume = 1.8 million

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Ashland Inc. - ASH - close: 51.59 change: +0.34 stop: 46.99

We do not see any changes from our weekend comments on ASH. Readers can choose to buy calls now or better yet wait for a dip back towards $50.00. We're suggesting a stop loss at $46.99 but you may want to use a stop closer to $48. There is potential resistance at its 200-dma in the $54-55 zone. Our target is the $57.00-58.00 range. We do not want to hold over the late April earnings report.

Picked on April 06 at $ 51.25
Change since picked: + 0.34
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 774 thousand

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Core Labs - CLB - close: 130.20 chg: +0.85 stop: 118.99

CLB continues to run away from us. We've been waiting for a pull back and CLB keeps posting gains instead. Shares traded to $134.16 before giving back most of its intraday gains today. This looks like it could be a short-term top even as it forms a technical breakout over resistance near $130 and its inverse H&S pattern. Currently our suggested entry point to buy calls is the $123.50-120.00 zone. We're sticking with that entry zone for now but we might raise it toward the $125 region. If triggered at $123.50 our short-term target will remain $130 (actually 129.75) but we'll add a second target of $139-140. We still do not want to hold over earnings in late April.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 240 thousand

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CONSOL Energy - CNX - cls: 74.56 chg: -1.55 stop: 69.49

Coal stocks made headlines today as ACI reaffirmed its earnings guidance. The problem was that the street was expecting ACI to be more optimistic with its earnings guidance. Just reaffirming its previous numbers was used as an excuse to lock in gains in this high-flying group. Shares of CNX had spiked to $80.44 this morning and gave back all of its gains and more. We are suggesting readers buy a dip in the $73.50-72.00 zone. The closer to $72.50 the better but our official entry point for the newsletter is going to be $73.50. The Point & Figure chart is very bullish with a $95 target. We are listing two targets. Our first target is the $79.75-80.00 range. Our second target is the $84.00-85.00 zone. More aggressive traders might want to aim for $90. Remember, we do not want to hold over the late April earnings report.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 3.7 million

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Essex Prop. Trust - ESS - cls: 116.97 chg: +0.50 stop: 112.95

Monday was a quiet day for ESS. Shares continued to meander sideways. We don't see any changes from our weekend comments. The stock has pulled back to the bottom edge of its four-week rising channel so this looks like a bullish entry point. Truly conservative traders might want to adjust their stop closer to the $115 region. Our target is the $124.50-125.00 range. The Point & Figure chart is bullish with a triple-top breakout buy signal and a $142 target.

Picked on March 24 at $115.50 *triggered
Change since picked: + 1.47
Earnings Date 05/05/08 (unconfirmed)
Average Daily Volume = 408 thousand

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Fluor - FLR - close: 150.93 chg: -1.96 stop: 139.90

Caution! FLR just produced a short-term bearish reversal with today's bearish engulfing candlestick pattern. The stock traded in a $5.00 range with a failure near $155. We would expect a dip back toward the $146-145 zone and readers can use it as a new bullish entry point. More conservative traders may want to consider a stop loss in the $142-144 region. We have 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. FYI: The P&F chart is bullish with a $184 target.

Picked on April 01 at $146.50 *triggered
Change since picked: + 4.43
Earnings Date 05/07/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Hovnanian - HOV - close: 12.22 chg: -0.11 stop: *varies*

HOV spent the session bouncing around a $1.00 range. There are no changes from our weekend comments. HOV remains poised for another short squeeze. We are listing two potential entry points and stops for each entry. If HOV rallies from here we're suggesting readers buy calls at $13.25 with a wide stop loss at $10.99. If HOV pulls back from here then we suggest readers buy calls in the $10.50-10.00 zone with a stop loss at $9.49. If triggered at $13.25 our first target is the $16.90-17.00 range. Our second target is $19.85-20.00. If triggered near $10 our first target is $14.50-15.00 and our second target would be near $20. Remember, this is an aggressive play. The stocks have seen a lot of whipsaws over the last several weeks.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Lincoln Elec. - LECO - cls: 70.58 chg: +1.33 stop: 66.99

Ouch! It doesn't happen that often but sometimes we get hit with a really bad fill on an entry point. We added LECO over the weekend with a suggestion to buy calls on a breakout over resistance with a trigger at $70.75. Unfortunately, the stock gapped open higher at $73.73 after being upgraded this morning before the bell. LECO quickly gave back most of its early morning gains but we would have been filled at the open. If you are looking for an entry point watch for a bounce near $70.00 or a potential dip to $69.50 as LECO "fills the gap" from this morning. Our play is open. We have two targets. Our first target is the $74.85-75.00 range. Our second target is the $78.00-80.00 zone. The Point & Figure chart is bullish with a $91 target. We do not want to hold over the late April earnings report.

Picked on April 07 at $ 73.73 *triggered/gap higher
Change since picked: - 3.15
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 233 thousand

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3M Co. - MMM - close: 80.19 chg: -0.33 stop: 78.45

MMM is still struggling with resistance in the $81.50-81.75 zone. Shares hit $81.62 this morning and failed again. It still looks like MMM will breakout higher but we're going to stick to our plan. Our official entry point to buy calls is still at $81.75. There is potential resistance near $85.00 and its 200-dma but our target is the $87.00-87.50 zone. We do not want to hold over the late April earnings report.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 3.9 million

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Arcelor Mittal - MT - close: 84.44 chg: -0.73 stop: 78.24

The dip in MT was minor and if you're looking for a new entry point wait for a dip near $83.00-82.50 (maybe 82.00). Our target is the $89.00-90.00 zone. The P&F chart is very bullish and just saw its price target jump from $101 to $113 this past week.

Picked on March 31 at $ 82.03 *triggered/gap open
Change since picked: + 2.41
Earnings Date 05/15/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Potash Corp. - POT - close: 173.28 chg: +2.39 stop: 149.75

POT is still being uncooperative with our plan to buy a dip near $167-165. Shares gapped open higher and traded to $178 this morning as investors reacted to news that a Goldman Sachs analyst had raised his price target on POT from $180 to $225. We agree. POT looks like it can go a long way and $225 is probably not an unreasonable multi-month, maybe year-end, target. The P&F chart is already bullish with a $218 target. Our challenge is an entry point for a more short-term trade. The stock found support this afternoon near $170. We're starting to wonder if POT is not going to dip under the $170 level. However, we aren't giving up yet and sticking to our $167.50-165.00 entry point zone. We are playing with a wide stop loss because the stock can be so volatile. More conservative traders might want to try and play with a stop closer to $160 instead. Our first target is the $179.50-180.00 zone. Our second target is the $188.00-190.00 zone. More aggressive traders could aim for the $200 region. FYI: The P&F chart is bullish with a $218 target.

Picked on April 03 at $ xx.xx <--see TRIGGER
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 7.7 million

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United States Oil - USO - close: 86.93 chg: +2.05 stop: 82.45

Commodities were hot today and crude oil surged more than 2% toward $109 a barrel. Unfortunately, oil was so hot that the USO actually gapped open higher at $86.49. One of our suggested entry points to buy calls on the USO was at $86.05. We would have been triggered at the opening trade. We remain bullish on oil and the USO but if you're looking for a new entry point we'd rather wait for a dip. A pull back into the $86.50-85.00 zone would not be unexpected. Our first target is the $92.50 mark. Our second, more aggressive target is the $97.50-100.00 zone.

Picked on April 07 at $ 86.49 *triggered/gap higher
Change since picked: + 0.44
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 5.4 million
 

Put Updates

Ambac Fincl. - ABK - cls: 6.21 change: +0.22 stop: n/a

It looks like ABK has found a new short-term trading range in the $6.00-6.40 region. We don't see any changes from our previous comments. 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).

Picked on January 27 at $ 11.54
Change since picked: - 5.33
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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Humana Inc - HUM - cls: 43.16 chg: -0.96 stop: 47.05

Shares of HUM slipped again and continue to under perform the market. The stock lost another 2.1%. There was some interesting news out after the closing bell. A Reuters article announced that the U.S. government was raising its payments made to private healthcare insurance firms, like HUM, for their Medicare plans by 3.6% in 2009. This sounds like good news right? Actually the market will probably see it as bad news since just a couple of months ago it was expected that the government might raise their payouts by 4.8%. The news came out after the closing bell and we're not seeing any real after hours move on the report. Our target is the $40.50-40.00 zone. More aggressive traders may want to aim lower. Currently the P&F chart is so bearish it points to a target of zero ($0.00).

Picked on March 30 at $ 45.20
Change since picked: - 2.04
Earnings Date 04/28/08 (unconfirmed)
Average Daily Volume = 4.4 million

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MBIA Inc. - MBI - close: 13.59 change: -0.02 stop: n/a

MBI closed relatively unchanged on Monday. We do not see any changes from our previous comments. Honestly, we are surprised that last Friday's credit downgrade by Fitch hasn't had a bigger impact on shares of MBI. We have not been suggesting new bearish positions but if you wanted to speculate with puts here it might work if you place a stop loss above $14.50 or $15.00. We had been suggesting the out-of-the-money May puts (7.50, 5.00 and 2.50 strikes).

Picked on January 27 at $ 14.20
Change since picked: - 0.61
Earnings Date 04/24/08 (unconfirmed)
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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Goldman Sachs - GS - cls: 178.73 chg: +3.33 stop: n/a

GS is still flirting with a bullish breakout over its trendline of resistance and the $180 level. We would still consider strangle positions in the $173.50-178.50 zone (more aggressive traders could widen that entry zone to $170-180). The options we suggested for this strangle were the May $190 calls (GPY-ER) and the May $160 puts (GPY-QL). Our estimated cost was $8.70. We want to sell if either option trades at $14.50 or higher.

Picked on April 06 at $175.40
Change since picked: + 3.33
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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