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Call Updates

Ashland Inc. - ASH - close: 53.64 change: 0.77 stop: 49.85

ASH continues to claw its way higher and the stock actually broke out and closed over technical resistance at its 200-dma on Friday. At this time we only have six trading days left before ASH reports earnings on April 29th. We do not want to hold over the report. Due to our declining time we are adjusting the target to $56.00-58.00. More conservative traders might want to start taking profits when ASH hits $55.00. If the market dips next week watch for ASH to find short-term support near its 10-dma or the $52.00 level.

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

Picked on April 06 at $ 51.25
Change since picked: 2.39
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 774 thousand

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CH Robinson Worldwide- CHRW - cls: 60.21 chg: 1.65 stop: 57.74*new*

The fact that transports continue to rally in the face of record high oil prices is pretty impressive. We don't have much time left. CHRW is due to report earnings on April 22nd after the closing bell. We will plan to exit on Tuesday at the close to avoid holding over earnings if CHRW doesn't hit our target first. We are raising our stop loss to $57.74. Our target is the $62.00-62.50 zone.

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

Picked on April 15 at $ 58.25
Change since picked: 1.96
Earnings Date 04/22/08 (confirmed)
Average Daily Volume = 1.9 million

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CONSOL Energy - CNX - cls: 86.25 chg: 3.19 stop: 79.95 *new*

Friday was another strong day for coal stocks. CNX rallied 3.8% to another new all-time high. Traders bought the dip near $85.00 on Friday afternoon, which is bullish for Monday. Monday could see some volatility. Before the opening bell rival coal producer ACI is going to report earnings. Wall Street expects ACI to deliver a profit of $0.46 a share. If ACI misses or offers any sort of negative comments it could spark a very sharp sell-off in this group. On the other hand if they offer positive comments then there is a pretty good chance that CNX will hit our target at $88.00 on Monday. We are raising our stop loss in CNX to $79.95. We still don't see a confirmed earnings date for CNX but it's coming up soon (estimates are for CNX to report between April 24 and May 5th).

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

Picked on April 15 at $ 80.55
Change since picked: 5.70
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 3.7 million

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DryShips Inc. - DRYS - close: 75.52 chg: 1.83 stop: 69.75 *new*

DRYS delivered another gain. The stock rallied to an intraday high of $77.67 and briefly traded over its 200-dma. The stock is nearing our target in the $79.00-80.00 zone. We are raising our stop loss to $69.75 but more conservative traders might want to use a tighter stop. We are not suggesting new positions at this time. If the market sees any profit taking look for DRYS to pull back toward $73.00-72.00.

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

Picked on April 15 at $ 70.32
Change since picked: 5.20
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.2 million

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Fluor - FLR - close: 160.10 chg: 3.70 stop: 149.85 *new*

FLR hammered out a 2.3% gain on Friday but shares are still struggling with resistance near $160. We remain bullish on FLR but we're not suggesting new positions at this time. A dip into the $156-154 zone might qualify as a new entry point to buy calls. We are raising our stop loss to $149.85. The stock has already hit our target at the $159.00 level. 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:
We are not suggesting new positions at this time.

Picked on April 01 at $146.50 *triggered /1st target hit $159
Change since picked: 13.60
Earnings Date 05/12/08 (confirmed)
Average Daily Volume = 2.3 million

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CurrencyShares Euro - FXE - cls: 159.11 chg: -0.75 stop: 156.90*new*

The U.S. dollar actually managed to put together back to back gains. Friday's strength in the dollar pulled the FXE lower. The FXE actually gapped open at $157.88 but managed a rebound at $157.50. We are adjusting our stop loss higher to $156.90 but more conservative traders may want to consider a stop closer to $157.50. We want to use a tight stop. This is a momentum play and some of the momentum indicators are starting to falter. A rebound back over $159 would look like a new entry point to buy calls. Our target is the $164.00-165.00 range. Our time frame is three to five weeks.

Suggested Options:
If the FXE provides a new entry point we'd use the May calls.

Picked on April 13 at $158.57
Change since picked: 0.54
Earnings Date 00/00/00
Average Daily Volume = 307 thousand

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Hovnanian - HOV - close: 11.81 chg: -0.04 stop: 10.45

HOV spiked to $12.39 near its exponential 200-dma before rolling over on Friday. Short-term momentum indicators are suggesting a dip soon. Look for a bounce near $11.00 as a new entry point to buy calls. Our target is the $13.50-14.00 zone. Our second, more aggressive target is the $14.75-15.00 zone.

Suggested Options:
If HOV provides a new entry point we would suggest the May or August calls but keep in mind we do not want to hold over the May earnings report.

Picked on April 16 at $ 11.86
Change since picked: - 0.05
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Joy Global - JOYG - close: 76.71 chg: 3.71 stop: 69.95*new*

The widespread market rally helped push JOYG to new all-time highs. The stock posted a 2.3% gain on above average volume. More conservative traders may want to pull a little money off the table now. We're adjusting our stop loss to $69.95. We are not suggesting new calls at current levels. Our target is the $79.50-80.00 range. The P&F chart is already bullish with an $88 target.

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

Picked on April 16 at $ 72.55 *triggered
Change since picked: 4.16
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Lincoln Elec. - LECO - cls: 73.13 chg: 1.20 stop: 70.90 *new*

We are announcing a change of plans on LECO. The company is due to report earnings on April 23rd. We don't want to hold over the report. Odds are good that the U.S. stock market will see some profit taking soon and if it does LECO should follow it lower. We are planning to exit on Monday (April 21st) at the closing bell to try and cut our losses short. Our new stop loss is $70.90.

Suggested Options:
We are not suggesting new positions.

Picked on April 07 at $ 73.73 *triggered/gap higher
Change since picked: - 0.60
Earnings Date 04/23/08 (confirmed)
Average Daily Volume = 233 thousand

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Ultra Petrol. - UPL - close: 85.01 chg: 1.03 stop: 79.45

Oil and energy stocks continue to march higher with crude hitting new records daily. Shares of UPL look poised to rally into next week. Something to keep in mind is the crude oil futures expiration after this Tuesday. We might want to consider an early exit on Tuesday at the closing bell just to avoid any profit taking if crude futures spike lower on Wednesday morning. We are adjusting our target to the $88.50-90.00 zone. The P&F chart has broken through resistance and points to a $95 target.

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

Picked on April 10 at $ 81.50
Change since picked: 3.52
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 1.4 million

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United States Oil - USO - close: 93.79 chg: 1.42 stop: 89.95*new*

Strategy alert! Did you read the market wrap for this weekend? Jim has discussed how crude oil futures are due to expire after Tuesday and last month there was a big sell-off after expiration. Now crude oil could very easily see a continuation of its rally, essentially a short squeeze at this point, up through the end of Tuesday's session. Don't be surprised to see crude oil hit $120 a barrel by Tuesday but we would expect some profit taking by week's end. Here is our strategy change with the USO, which has already hit our initial target at $92.50. We are suggesting that everyone exit on Monday. If you want to exit Monday morning or Monday afternoon that's up to you. We do think that oil will be higher on Monday so the newsletter will close this play at Monday's closing bell. More aggressive and nimble traders might want to hold this position through Tuesday and just exit at Tuesday's closing bell. We are also listing an alternative exit strategy to just exiting at Monday's close. Our new target is the $94.85 mark. In summary we are closing this play on Monday afternoon or we could get taken out earlier on Monday if the USO hits $94.85. Our new stop loss is $89.95.

Suggested Options:
We are not suggesting new positions.

Picked on April 07 at $ 86.49 *gap higher /1st target hit
Change since picked: 7.30
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 5.4 million

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ExxonMobil - XOM - cls: 94.00 chg: 0.62 stop: 89.99 *new*

Crude oil is hitting new records and XOM continues to rally on oil's coattails. Shares of XOM hit an intraday high of $94.45 on Friday. Our target is the $94.85-95.00 range, which we think XOM will hit on Monday. We're adjusting the stop loss to $89.99. We would not hold over the May 1st earnings report.

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

Picked on April 15 at $ 90.80
Change since picked: 3.20
Earnings Date 05/01/08 (confirmed)
Average Daily Volume = 26.2 million
 

Put Updates

Ambac Fincl. - ABK - cls: 5.98 change: 0.22 stop: n/a

It was a big week for the financials with investors buying bad news hoping the worst is behind them. Shares of ABK rallied about 20% from its lows. Considering the strength in financials this past week we would seriously consider closing this play now and just cutting your losses early. However, ABK is due to report earnings on Wednesday morning (April 23rd). The company's results and their guidance could be a lot worse than expected so we're going to stick it out for at least three more days to hold over earnings. Readers should keep in mind that ABK will be desperate to put a positive spin on its results and guidance to halt the bleeding in its stock price. We are not suggesting new bearish positions in ABK. This remains a very speculative play. 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.

Picked on January 27 at $ 11.54
Change since picked: - 5.56
Earnings Date 04/23/08 (confirmed)
Average Daily Volume = 10.9 million

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Capital One - COF - close: 47.21 chg: -1.53 stop: 51.05

We previously reported on COF's earnings, which came out on Thursday. The results were actually 2 cents better than expected. Yet the early morning Friday rally hit $51.00 and reversed. This looks like another entry point for put positions. Investors remain worried about the status of the consumer and weakness in consumer credit. Our target is the $41.50-40.00 zone. The Point & Figure chart is bearish with a $38 target.

Suggested Options:
We are suggesting the May puts.

Picked on April 13 at $ 48.30
Change since picked: - 1.09
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 9.0 million

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Fannie Mae - FNM - close: 28.55 chg: 0.30 stop: 30.26

A positive reaction to Citigroup's (C) earnings news fueled another day of strength in the financials. Shares of FNM rallied to $29.99 and reversed. Look for a new decline under $27.50 before considering new put positions. FNM has already exceeded our target at the $25.25 mark. Our second target is the $21.00-20.00 zone.

Suggested Options:
If FNM provides a new entry point we would use the May or June puts.

Picked on April 08 at $ 29.00 /1st target exceeded 25.25
Change since picked: - 0.45
Earnings Date 05/27/08 (unconfirmed)
Average Daily Volume = 26.5 million

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Humana Inc - HUM - cls: 43.50 chg: 1.23 stop: 45.20

Option expiration short covering on Friday may have accounted for the 2.9% bounce in HUM. The rally stalled under $44.00 but shares did breakout over its 10-dma. We are not suggesting new positions at this time. If the stock closes over $44.00 we'll want to consider an early exit. 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: - 1.70
Earnings Date 04/28/08 (confirmed)
Average Daily Volume = 4.4 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: 179.93 chg: 7.83 stop: n/a

The strength in financials was very apparent in the broker-dealers. The XBD broker-dealer index rose 2.8%. Shares of GS out performed its peers with a 4.5% gain. The stock is back to challenging resistance near $180 again. 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 positions at this time.

Picked on April 06 at $175.40
Change since picked: 4.53
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million

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Merrill Lynch - MER - cls: 47.35 chg: 0.64 stop: n/a

The rally in financials lifted MER past technical resistance at its 50-dma. The long-term trend in MER is still bearish but investors are now faced with the possibility of a true bullish breakout soon. Our extremely speculative strangle using April options is now dead but the May strangle still looks good. We're not suggesting new positions at this time. The options we listed in the May strangle were the May $50 calls (MER-EJ) and the May $32.50 puts (MER-QA). Our estimated cost was $1.76 and we want to sell if either option hits $3.00 or more.

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

Picked on April 15 at $ 43.34
Change since picked: 4.01
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 30.6 million
 

Dropped Calls

Baker Hughes - BHI - close: 80.80 chg: 3.42 stop: 71.45

Target exceeded. Oil service stocks soared again. Rival Schlumberger (SLB) reported earnings on Friday that were worse than expected but investors bought the news anyway with crude hitting new highs near $117 a barrel. This positive attitude lifted BHI to a 4.4% gain and shares rallied past resistance at the 200-dma and the $80.00 mark. The intraday high was $81.09. Our target was the $78.50-80.00 zone.

Picked on April 10 at $ 72.76 *target exceeded (81.09high)
Change since picked: 8.04
Earnings Date 04/22/08 (confirmed)
Average Daily Volume = 4.7 million

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Essex Prop. - ESS - close: 117.11 chg: -1.31 stop: 109.45

Target achieved. Your quote feed probably says that ESS opened at $118.80 but if you look at an intraday chart is looks like ESS actually opened at $119.80. Our target was the $119.50-120.00 zone. Shares reversed under round-number resistance at $120 and looks like they could dip toward $115 again.

Picked on April 15 at $112.07 /target hit $119.50
Change since picked: 5.04
Earnings Date 04/30/08 (confirmed)
Average Daily Volume = 411 thousand
 

Dropped Puts

iShares Financial - IYF - close: 86.44 chg: 1.43 stop: 85.55

Trading in the financials this week certainly didn't play out the way we expected. The group bounced on Tuesday and didn't look back. The IYF gapped open higher at $87.62 on Friday morning as investors reacted to the Citigroup earnings news. Our suggested stop loss on the IYF was $85.55. Unfortunately, we would have been stopped out at the opening bell.

Picked on April 13 at $ 82.51 /gap open exit 87.62
Change since picked: 3.93
Earnings Date 00/00/00
Average Daily Volume = 3.6 million

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iShares Fincl.Servcs. - IYG - cls: 91.69 chg: 1.79 stop: 92.26

We had the same problem with the IYG. A positive reaction to Citigroup's earnings had the IYG gapping higher and opening at $93.02. Our suggested stop was $92.26 so we would have been stopped out at the open.

Picked on April 13 at $ 87.26 /gap open exit 93.02
Change since picked: 4.43
Earnings Date 00/00/00
Average Daily Volume = 344 thousand

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Juniper Networks - JNPR - cls: 24.48 chg: 1.12 stop: 24.55

The GOOG earnings news was too much for the bears. Tech stocks soared at the open and JNPR was no exception. JNPR gapped open at $24.06 and rallied to $24.67 intraday. Our suggested stop loss was $24.55. The longer-term trend in JNPR is still bearish but our play is closed.

Picked on April 09 at $ 22.95 triggered/stopped 24.55
Change since picked: 1.53
Earnings Date 04/24/08 (unconfirmed)
Average Daily Volume = 11.5 million

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MBIA Inc. - MBI - close: 13.04 change: 0.33 stop: n/a

It's time to cut our losses in MBI. We were expecting bigger losses in the financial sector this week. There are a number of analysts that believe financials will still see another wave of write downs. However, current investor sentiment is to buy the dip and the bad news with hopes this sector has finally hit bottom. Shares of MBI have essentially been bouncing around sideways and we suspect they will continue to bounce sideways until its earnings report in mid May. We don't want to wait around as option premiums decay. Several days ago we suggested that if financial stocks did not sell-off this past week we would cut MBI as a bearish play.

Picked on January 27 at $ 14.20
Change since picked: - 1.16
Earnings Date 05/13/08 (confirmed)
Average Daily Volume = 15.2 million
 

Dropped Strangles

Google Inc. - GOOG - cls: 539.41 chg: 89.87 stop: n/a

Target exceeded. If you haven't heard yet GOOG reported earnings that were better than expected. The company said business continues to look good. Short covering had GOOG gapping open higher at $535.21 and soaring to $547.70 intraday. The call side of our strangle was the May $500 (GOP-EO). These May $500 calls gapped open at $41.50 and traded to an intraday high of $54.00 before settling at $46.50. Our estimated cost for the entire strangle was $14.10 and we had adjusted our exit target to sell to $34.50 but this morning's gap open at $41.50 would have closed the play for us.

Picked on April 16 at $455.03
Change since picked: 84.38
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 2.9 million
 

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