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Call Updates

Ashland Inc. - ASH - close: 50.63 change: -0.54 stop: 47.95

ASH had a little bit of news on Friday. The Harbert Management Corp. and its Harbinger Capital Partners Master Fund have raised their stake in ASH from 9.9% (6.3 million shares) to 11.4% (around 7.1 million shares). ASH endured Friday's market weakness pretty well. The markets lost about 2% and ASH only fell 1%. Buying dips, or bounces, near the $50.00 level still seems like a viable strategy. However, traders might want to tighten their stop losses closer to the $49.00 level instead. If the market really turns lower we would expect ASH to retrace to its 50-dma or the $45.00 region. At the end of the day, giving the market's tone on Friday, we wouldn't be rushing out to open new call positions. There is potential resistance at its 200-dma in the $54 zone. Our target is the $57.00-58.00 range. We do not want to hold over the late April earnings report.

Suggested Options:
If ASH provides a new entry point we would suggest the May calls.

Picked on April 06 at $ 51.25
Change since picked: - 0.62
Earnings Date 04/23/08 (unconfirmed)
Average Daily Volume = 774 thousand

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Bunge Ltd - BG - close: 103.37 chg: -1.55 stop: 99.90

BG also appeared to hold up reasonably well during Friday's market sell-off. Shares lost about 1.5% but are still clinging toward the 200-dma and 50-dma. Traders had already started to buy the dip late Friday afternoon. Nimble traders could try buying a dip or bounce near the $100.00 mark. We are going to stick to our plan and wait for a breakout over resistance at $105. We're suggesting a trigger to buy calls at $105.25. Our target will be $114.50-115.00. The Point & Figure chart is bullish with a $129 target. We do not want to hold over the April 24th (before the opening bell) earnings report.

Suggested Options:
We are suggesting the May calls but plan to exit ahead of the April 24th earnings report.

BUY CALL MAY 100 BG-ET open interest=1154 current ask $10.00
BUY CALL MAY 105 BG-EA open interest= 520 current ask $ 7.30
BUY CALL MAY 110 BG-EB open interest= 646 current ask $ 5.10

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/24/08 (confirmed)
Average Daily Volume = 2.8 million

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Baker Hughes - BHI - close: 71.81 chg: -0.95 stop: 69.45

I do not personally watch Jim Cramer's "Mad Money" show on a regular basis but I happened to catch the beginning of the show on Thursday night. We had added BHI to the play list on Thursday and Thursday night Cramer is pounding the table on it as a buy. I'm sure the bulls won't complain. On Friday BHI slipped to its rising 10-dma during the market turmoil. We remain bullish on BHI and would technically consider new call positions here. However, I would much rather wait and see if BHI dips toward the $70 level and buy a dip closer to $70.00 or wait for a bounce from $70.00 instead. The P&F chart is bullish as the stock has broken through resistance and points to an $89 target. Our target is the $78.50-80.00 range. We do not want to hold over the April 22nd earnings report.

Suggested Options:
We are suggesting the May calls but plan to exit ahead of the April 22nd earnings report.

BUY CALL MAY 70.00 BHI-EN open interest=2832 current ask $4.90
BUY CALL MAY 75.00 BHI-EO open interest=5555 current ask $2.50
BUY CALL MAY 80.00 BHI-EP open interest=1736 current ask $1.10

Picked on April 10 at $ 72.76
Change since picked: - 0.95
Earnings Date 04/22/08 (confirmed)
Average Daily Volume = 4.7 million

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Core Labs - CLB - close: 131.40 chg: -3.75 stop: 122.45

After three weeks of hefty gains CLB looks like a prime candidate for some profit taking. We're going to stick to our plan with an entry point to buy calls in the $126.00-125.00 zone. Our stop loss is at $122.45 but more aggressive traders may want to put their stop under stronger support near $120 instead. Our target will move to $139.00-140.00. We still do not want to hold over earnings in late April, which does not give us a lot of time.

Suggested Options:
If CLB hits our trigger at $126 we are suggesting the May calls.

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: 75.63 chg: -2.27 stop: 69.49

We are adjusting our entry point in CNX. The market action on Friday combined with another failed rally at $80 for CNX has us turning a little bit more defensive. Our suggested entry point to buy calls is the $72.50-70.00 zone. The closer to $70.00 the better but we would buy calls at $72.50. 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, which does not give us much time left.

Suggested Options:
If CNX hits our trigger at $72.50 we are suggesting the May calls.

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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Fluor - FLR - close: 149.46 chg: -2.94 stop: 144.45 *new*

FLR was not immune to the market weakness on Friday. Shares lost about 1.9% although they've been trading sideways for a week now. We do think that FLR will dip again. The question is how low will it go? Will shares find support near $145? Or will FLR dip all the way to $140 again? We are going to raise our stop loss to $144.45. You could take the opposite approach and use a wider stop under $140 (we'd use 137.45). However, we'd rather tighten our stop and just consider buying calls again if FLR bounces near $140. 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.

Suggested Options:
If FLR bounces from the $145 level we would use the May calls.

Picked on April 01 at $146.50 *triggered
Change since picked: + 2.96
Earnings Date 05/07/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Hovnanian - HOV - close: 11.34 chg: +0.38 stop: 9.69

Both the DJUSHB home construction index and the HGX housing index are down sharply this past week. Both indices dropped again on Friday and HOV paced the move with a 2.2% decline. What is somewhat surprising is that HOV is holding above its 200-dma - at least for now. HOV still has a multi-week trend of higher lows but we are seeing short-term bearish signals in the technical patterns. We are going to focus on the buy the dip entry point instead of the breakout entry point but we're going to modify the dip entry point from $10.50 to $10.25. We're also adjusting the stop loss to $9.69. If triggered at $10.25 our first target is the $12.75-13.00 range. Our second, more aggressive target will be the $14.50-15.00 zone.

Suggested Options:
Our trigger point to buy calls is $10.25. We're suggesting the May calls.

BUY CALL MAY 10.00 HOV-EB open interest=5284 current ask $1.95
BUY CALL MAY 12.50 HOV-EV open interest=6460 current ask $0.75

Picked on April xx at $ xx.xx <-- see TRIGGER 10.25
Change since picked: + 0.00
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Joy Global - JOYG - close: 68.66 chg: -2.34 stop: 68.45

Shares of JOYG were trading near all-time highs so it's no surprise to see the stock hit harder as traders try to lock in profits. JOYG lost about 3.3% albeit on below average volume. More nimble traders could try buying dips in the $65-66 zone. We are sticking to our plan and waiting for a new high. Shares have resistance in the $72.00-72.50 zone so we're suggesting readers buy calls at $72.55. If triggered our target is the $79.50-80.00 range. The P&F chart is already bullish with an $88 target.

Suggested Options:
If JOYG hits $72.55 we are suggesting the May calls.

BUY CALL MAY 70.00 JQY-EN open interest=1183 current ask $4.90
BUY CALL MAY 75.00 JQY-EO open interest=1321 current ask $2.60

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Lincoln Elec. - LECO - cls: 69.67 chg: -1.41 stop: 67.90

We're starting to think maybe we should just cut our losses and go with LECO. The losses wouldn't be so bad if we hadn't gotten that bad fill on the gap higher. Traders bought the dip at $69.00 on Friday morning. More conservative traders might want to tighten their stops toward $69.00 or just exit early now. Another rally past $71.35 might convince us to go long calls again. The good news is that there hasn't been a lot of follow through on the failed rally but neither has there been any follow through as traders buy the dip near $70.00. 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.

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

Picked on April 07 at $ 73.73 *triggered/gap higher
Change since picked: - 4.06
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 233 thousand

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Arcelor Mittal - MT - close: 82.90 chg: -2.74 stop: 79.45*new*

MT, which had been at new all-time highs, was hit with profit taking on Friday. Shares fell almost 3.2% and broke down under its 10-dma. The trend is still bullish but we suspect that MT will pull back toward what should be support near $80.00. Wait for the dip near $80.00 or a bounce from $80.00 as a new bullish entry point to buy calls. We're upping our stop loss to $79.45. 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.

Suggested Options:
If MT provides a new bullish entry point we would use the May calls.

Picked on March 31 at $ 82.03 *triggered/gap open
Change since picked: + 0.87
Earnings Date 05/15/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Potash Corp. - POT - close: 178.47 chg: +0.37 stop: 159.90 *new*

The relative strength in the fertilizer and agriculture names has been impressive. POT is one of the leaders and shares actually hit a new all-time high over $180 on Friday. This group tends to be the last to breakdown when the market turns south but when it does break it really plunges. Right now we're suggesting readers buy calls in the $170.50-167.50 zone. Honestly, if the market really sees a sell-off we'd rather buy bullish positions in POT near $160 and its 50-dma. We have a very wide stop because the stock and this group has been so volatile. If triggered near $170 we have two targets. Our first target is the $184.00-185.00 range. Our second target is the $194.00-200.00 zone. FYI: The P&F chart is bullish with a $218 target. POT is due to report earnings in the last half of April and we do not want to hold over the report, which doesn't give us a lot of time so don't count on hitting that second target.

Suggested Options:
If triggered we are suggesting the May calls.

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

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Ultra Petrol. - UPL - close: 81.90 chg: +0.40 stop: 77.95

UPL continued to show relative strength on Friday. The stock actually sneaked by with a new all-time high on an intraday basis (it was 82.45). We remain bullish but suggest a little patience. A dip near $80.00 is very possible in this market environment and would be a more attractive entry point. Our target is the $89.50-90.00 zone. The P&F chart has broken through resistance and points to a $95 target.

Suggested Options:
We are still suggesting the May $80 or $85 calls.

Picked on April 10 at $ 81.50
Change since picked: + 0.40
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 1.4 million

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United States Oil - USO - close: 88.48 chg: +0.30 stop: 84.45*new*

Crude oil continues to trade near all-time highs and the commodity was back in rally mode on late Friday afternoon. Oil futures are due to expire around Thursday this coming week. There is huge open interest at the $110 strike, and oil is likely to trade sideways (to up) into futures expiration. We are adjusting our stop loss to $84.45. Our first target is the $92.50 mark. Our second, more aggressive target is the $97.50-100.00 zone.

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

Picked on April 07 at $ 86.49 *triggered/gap higher
Change since picked: + 1.99
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 5.4 million
 

Put Updates

Ambac Fincl. - ABK - cls: 5.33 change: +0.06 stop: n/a

ABK managed a minor, oversold bounce on Friday but the path of least resistance is still down. This coming week's parade of earnings reports from the financial sector could have a big impact (either way) on ABK. 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).

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

Picked on January 27 at $ 11.54
Change since picked: - 6.21
Earnings Date 04/23/08 (confirmed)
Average Daily Volume = 10.9 million

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Fannie Mae - FNM - close: 26.04 chg: -0.49 stop: 31.11

The sell-off in financial stocks and FNM continues. Shares lost 1.8% today on top of the 8.5% it had already lost since we added it to the newsletter. FNM looks poised to hit our first target soon. We are listing two targets. Our first target is the $25.25-25.00 zone. Our second target is the $21.00-20.00 zone.

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

Picked on April 08 at $ 29.00
Change since picked: - 2.96
Earnings Date 05/27/08 (unconfirmed)
Average Daily Volume = 26.5 million

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Humana Inc - HUM - cls: 42.21 chg: -1.97 stop: 45.76 *new*

HUM continues to see relatively big swings. The stock dropped 4.4% on Friday and hit a new relative low. The stock certainly looks poised to fall toward our target but lately it's been up one day and down the next. We are adjusting our stop loss to $45.76. 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).

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

Picked on March 30 at $ 45.20
Change since picked: - 2.99
Earnings Date 04/28/08 (confirmed)
Average Daily Volume = 4.4 million

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Juniper Networks - JNPR - cls: 22.83 chg: -0.48 stop: 24.55

An earnings warning from rival Foundry Networks led shares of JNPR to gap open lower on Friday. JNPR dipped to $22.23 before bouncing back. We remain bearish on JNPR and would still consider new put positions here. If shares surprise us with a bounce watch the $24.00 level for overhead resistance. The move under $23.00 has reversed the P&F chart into a new sell signal with a $16.00 target. We do not want to hold over the late April earnings report. Our target is the $20.15-20.00 zone.

Suggested Options:
We are suggesting the May puts but plan to exit ahead of the April 24th earnings report.

Picked on April 09 at $ 22.95 triggered
Change since picked: - 0.12
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 11.5 million

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MBIA Inc. - MBI - close: 11.80 change: -0.09 stop: n/a

MBI continues to inch lower. This week's earnings news from the financial sector could have a big impact on shares of MBI. Volume on this stock has pretty much dried up as investors wait for news on the health of this industry. 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).

Suggested Options:
We are not suggesting new positions.

Picked on January 27 at $ 14.20
Change since picked: - 2.40
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: 167.30 chg: -3.25 stop: n/a

Just about everyone considers GS to be "best in breed" and a lot of investors and market pundits talk about how they want to own this stock but no one is buying it. Looks like they all want to own it just a little bit lower. It would appear that GS' consolidation under its trendline of resistance has broken to the downside although nothing is certain. This week's coming volley of financial sector earnings could definitely produce a lot more volatility for banks and brokers. We are not suggesting new strangles at this time. 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.

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

Picked on April 06 at $175.40
Change since picked: - 8.10
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million
 

Dropped Calls

Aluminum Corp. of China - ACH - cls: 40.13 chg: -2.03 stop: 39.85

Friday's market weakness just yanked the rug out from under ACH's rebound attempt. Shares of ACH lost 4.8% and left it clinging to round-number support at $40.00. Unfortunately, we don't believe $40.00 is going to hold up this time so we're suggesting readers abandon ship. ACH hit our initial target at $44.85 and hit an intraday high of $46.38 on April 7th but that's as close as it go to our second, more aggressive target near $47.75.

Picked on March 30 at $ 40.80 /1st target exceeded (44.85)
Change since picked: - 0.67
Earnings Date 03/18/08 (unconfirmed)
Average Daily Volume = 1.8 million

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3M Co. - MMM - close: 78.47 chg: -1.88 stop: 78.45

Weakness in the Dow Industrials continues to weigh on Dow-component MMM. The stock gapped down, presumably on the GE earnings news, and tried to bounce from the $78 level. We have been waiting on a bullish breakout over resistance with a trigger to buy calls at $81.75. That hasn't happened yet and we're choosing to drop MMM as a bullish candidate at this time.

Picked on April xx at $ xx.xx *never opened
Change since picked: + 0.00
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 3.9 million

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Research In Motion - RIMM - cls: 115.85 chg: -4.83 stop: 116.49

With bulls on the run they quickly started selling RIMM. Shares gapped open lower at $118.96 and plunged to a 4% loss breaking the 10-dma and producing a new MACD sell signal on the daily chart. RIMM hit our stop loss at $116.49, ending the play. We would keep an eye on RIMM and a bounce from $110 or $100 could be an attractive entry point for new positions.

Picked on April 08 at $120.98
Change since picked: - 5.13
Earnings Date 06/26/08 (unconfirmed)
Average Daily Volume = 22.3 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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