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Call Updates

Aluminum Corp. of China - ACH - cls: 43.60 chg: -1.30 stop: 39.85

Hopefully no one was surprised to see weakness in ACH. We warned readers last night that ACH would probably trade lower today as the market reacted to Alcoa's earnings miss. A dip or bounce in the $42.00-42.50 zone could be used as a new entry point. More conservative traders might want to consider a tighter stop loss. ACH has already exceeded our initial target at $44.85. Our second, more aggressive target is the $47.75-50.00 zone.

Picked on March 30 at $ 40.80 /1st target exceeded (44.85)
Change since picked: + 2.80
Earnings Date 03/18/08 (unconfirmed)
Average Daily Volume = 1.8 million

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Ashland Inc. - ASH - close: 52.24 change: +0.65 stop: 46.99

ASH displayed some relative strength today with a 1.2% gain and on strong volume. We did not see any news or catalyst that might explain the surge in volume today. If the market turns lower we would expect ASH to retest broken resistance near $50 as new support and readers could use the pull back as a new entry point to buy calls. 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: + 0.99
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 774 thousand

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Core Labs - CLB - close: 130.50 chg: +0.30 stop: 118.99

CLB miraculously posted another gain on Tuesday. The stock looks very short-term overbought here having gone almost straight up for close to two weeks in a row. We want to wait for the dip. 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. FYI: Truly nimble traders could try and scalp a few points with a put play on the expected pull back (maybe to $125).

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: 78.21 chg: +3.65 stop: 69.49

Coal stocks were huge winners today in an otherwise bearish tape. Shares of CNX surged 4.9%. Most quote services are going to tell you that the opening trade today was $73.50. We wish that was the case. Our suggested entry point to buy calls on CNX was $73.50. Unfortunately, the $73.50 print appears to be a bad tick. We didn't see CNX trade under $74.00 on the intraday chart so we checked the time and sales data and did not see CNX trade at $73.50 this morning. As much as we'd like to claim it we have to pass. Now if some of our readers were able to get in near the low today, then great! We're going to stick to our plan for now and suggest readers buy dips in the $73.50-72.50 zone but at this point it will probably take a few days for CNX to retrace that low again. If CNX reverses lower too quickly then we'd be worried. 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: 115.90 chg: -1.07 stop: 114.45*new*

We are starting to lose faith in ESS. The consolidation is now into its fifth day and ESS is about to breakdown under support at the bottom of its four-week rising channel and support near $115. We are actually raising our stop loss to $114.45 to reduce our risk. More conservative traders may want to place their stop loss closer to $115.00. Right now we have to try and balance our risk that ESS might spike back to $110 versus a short, intraday drop under $115 and a rebound higher again. 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: + 0.40
Earnings Date 05/05/08 (unconfirmed)
Average Daily Volume = 408 thousand

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Fluor - FLR - close: 152.47 chg: +1.54 stop: 143.45 *new*

Shares of construction company LAYN soared almost 22% on Tuesday after reporting earnings that were significantly better than Wall Street estimates. This news lifted the entire group and FLR bounced from its intraday lows near $147.25 to post a 1% gain. We were expecting a dip a little bit lower near $146 but today's low may have been the new entry point we were looking for. At the moment direction depends on the broader market. We are going to raise our stop loss to $143.45. 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: + 5.97
Earnings Date 05/07/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Hovnanian - HOV - close: 11.96 chg: -0.26 stop: *varies*

Homebuilders hit some profit taking on Tuesday as investors reacted to the National Association of Realtors pending home sales report, which slipped lower than expected. Shares of HOV lost 2% albeit on below average volume. HOV is still a strong short squeeze candidate. 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: 70.90 chg: +0.32 stop: 67.90 *new*

LECO is holding above support near $70.00 and its 200-dma. The move today looks like a new entry point although given the mood of the market lately it still might pay off to wait for a dip near $69.50. We are raising our stop loss to $67.90. 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: - 2.83
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 233 thousand

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3M Co. - MMM - close: 79.88 chg: -0.31 stop: 78.45

MMM slipped lower on Tuesday but shares remain within their $2.00 trading range (79.50-81.50) for the month of April. We are suggesting readers wait for a breakout and use a trigger to buy calls 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: 85.45 chg: +1.01 stop: 78.24

Investors bought the dip in MT and the stock posted a 1.2% gain on Tuesday. Our only concern was the lack of volume, which came in less than half the average. 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: + 3.42
Earnings Date 05/15/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Potash Corp. - POT - close: 176.15 chg: +2.97 stop: 149.75

POT continues to show relative strength, which is great for the bulls, but not so great for us since we're trying to buy a dip. We believe in the fundamentals for POT and the technicals look good too so we're willing to wait for a dip at least for now. More aggressive traders may want to buy dips near $170. We are suggesting readers buy calls on a dip in the $167.50-165.00 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: 87.19 chg: +0.26 stop: 82.45

Crude oil is inching closer to $110 a barrel and could be poised to breakout to new highs soon. If oil does hit new highs it could unleash a rally toward $120 a barrel. The USO dipped to $86.20 this morning but quickly rebounded. 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: + 0.70
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 5.4 million
 

Put Updates

Ambac Fincl. - ABK - cls: 6.03 change: -0.18 stop: n/a

ABK could definitely see some selling pressure tomorrow morning. After the bell this evening Standard & Poor's rating service downgraded four mortgage insurers. These insurers are MTG, ORI, PMI and RDN. This sort of move should raise fears and doubts about the big bond insurers like ABK and MBI. 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: - 5.51
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 10.9 million

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Humana Inc - HUM - cls: 45.20 chg: +2.04 stop: 47.05

Hmm... HUM has completely erased our unrealized "gains" in the stock with a 4.7% rally today. We are lead to believe that the rally was fueled by the news out last night concerning the government raising their payments to medicare plan insurers. In reality the government is raising its payments less than previously thought, which should be negative! Today's move looks like a temporary, uninformed pop, by investors who only read the headlines. However, we can't argue with the market and suggest readers turn defensive. 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: - 0.00
Earnings Date 04/28/08 (unconfirmed)
Average Daily Volume = 4.4 million

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MBIA Inc. - MBI - close: 12.99 change: -0.60 stop: n/a

Shares of MBI lost 4.4% and closed back under its 50-dma but did so on very low volume. Fueling the move could have been news that First Marblehead (FMD), an issuer of student loans, lost its bond insurer to bankruptcy. While not a direct reflection on MBI news like this definitely undermines investor confidence. Speaking of investor confidence S&P just downgraded four mortgage insurers (MTG, ORI, PMI and RDN) after the closing bell tonight. It wouldn't surprise us to see MBI trading lower again tomorrow. We are 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).

Picked on January 27 at $ 14.20
Change since picked: - 1.21
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: 178.90 chg: +0.17 stop: n/a

GS spent the session trading sideways and closed virtually unchanged. We don't see any changes from our previous comments. 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: + 3.50
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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