Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Ashland Inc. - ASH - close: 51.37 change: -1.73 stop: 49.85

Shares of ASH were hit today and we couldn't find the news or catalyst to account for the selling pressure. The stock had been relatively resilient but something sent ASH sharply lower until traders bought the dip near support around $50.50. We're not suggesting new positions at this time. We only have a few days left until 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.

Picked on April 06 at $ 51.25
Change since picked: + 0.12
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 774 thousand

---

Alliant Tech - ATK - close: 106.20 chg: -1.12 stop: 104.85

Lockheed Martin (LMT) reported earnings today that were better than expected but the company lowered guidance. This sent the defense stocks lower but it could have been worse. ATK dipped to its 10-dma again near $105.30 and bounced. A rally from here can be used as a new entry point or readers can wait for a break above its 100-dma near $107.55. FYI: A move over $110 would reverse the Point & Figure chart into a new buy signal. We do not want to hold over the May 8th earnings report.

Picked on April 21 at $106.00 *triggered
Change since picked: + 0.20
Earnings Date 05/08/08 (confirmed)
Average Daily Volume = 246 thousand

---

General Cable - BGC - close: 71.70 chg: -0.89 stop: 64.99

BGC is still showing relative strength. Traders bought the dip again this time at $70.50. We are waiting for BGC to pull back toward our suggested entry in the $68.50-67.50 zone. If triggered our target is the $74.00-75.00 range. We do not want to hold over the April 29th earnings report so that's not a lot of time. The Point & Figure chart is bullish with an $83 target.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 841 thousand

---

Express Scripts - ESRX - close: 69.58 chg: +1.76 stop: 64.95

ESRX ignored weakness in UNH and other healthcare stocks to post a 2.59% gain on average volume. ESRX looks poised to breakout over the $70.00 level soon. We are adding a second target. Our first target is the $72.50 mark. The second target will be the $74.85 mark. More aggressive traders could aim higher but we do not want to hold over the April 29th earnings report. The P&F chart is bullish with an $81 target.

Picked on April 21 at $ 67.50 *triggered
Change since picked: + 2.08
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 3.1 million

---

Fluor - FLR - close: 159.97 chg: -1.57 stop: 149.85

We don't see any changes from our previous comments on FLR. If you haven't taken any profits yet we suggest you do so now. We're not suggesting new positions at this time. 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.

Picked on April 01 at $146.50 *triggered /1st target hit $159
Change since picked: +13.47
Earnings Date 05/12/08 (confirmed)
Average Daily Volume = 2.3 million

---

CurrencyShares Euro - FXE - cls: 160.10 chg: +0.67 stop: 157.49*new*

News out today that the European Central Bank (ECB) might raise interest rates to fight inflation lifted the Euro. The Euro hit new all-time highs above the $1.60 level ($160 for the FXE). We are raising our stop loss to $157.49, which is just underneath Friday's low. Our target is the $164.00-165.00 range. Our time frame is three to five weeks.

Picked on April 13 at $158.57
Change since picked: + 1.53
Earnings Date 00/00/00
Average Daily Volume = 307 thousand

---

Hovnanian - HOV - close: 11.57 chg: -0.05 stop: 10.45

Existing home sales data came out today. The results were not good for the real estate market. Number of homes on the market rose 40,000 to 4.06 million, which is a 9.9-month supply. Usually we want a five or six month supply. Meanwhile for most of the country sale prices fell. The median price dropped 7.7% to $200,000 while prices in the west fell 14%. The homebuilding index (DJUSHB) lost 2.4% and looks poised to retest its recent lows. HOV out performed its peers but if the sector continues to sink we would expect HOV to dip toward the $10.75-10.50 region. We would hesitate to open new bullish positions at this time. Our target is the $13.50-14.00 zone. Our second, more aggressive target is the $14.75-15.00 zone.

Picked on April 16 at $ 11.86
Change since picked: - 0.29
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

---

Intl.Bus.Mach. - IBM - cls: 123.67 chg: -0.68 stop: 118.49

IBM continues to show relative strength. The stock slipped just 0.5% and has been consolidating sideways on light volume. This is bullish but we would prefer to buy a dip near $120. We are still suggesting that readers buy a pull back in the $120.75-120.00 zone. If triggered we'll have two targets. Our first target is the $124.90-125.00 range. Our second target is the $128.00-130.00 zone.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/16/08 (confirmed)
Average Daily Volume = 8.8 million

---

Joy Global - JOYG - close: 73.69 chg: -2.21 stop: 69.95

JOYG endured some profit taking today but bulls were stepping in to buy the dip near its 10-dma around $72.50. This looks like another entry point to buy calls if you missed it the first time. Our target is the $79.50-80.00 range. The P&F chart is already bullish with an $88 target.

Picked on April 16 at $ 72.55 *triggered
Change since picked: + 1.14
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.3 million
 

Put Updates

Ambac Fincl. - ABK - cls: 6.03 change: +0.09 stop: n/a

Tomorrow is the big day. ABK reports earnings before the opening bell. Wall Street expects a loss of $1.51 a share. We are not suggesting new positions. Yesterday we added a hedge with a May $10 call (GIY-EB) to protect us from any massive short covering should ABK really surprise to the upside. This remains a very speculative play. 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 04/23/08 (confirmed)
Average Daily Volume = 10.9 million

---

Capital One - COF - close: 46.38 chg: -1.48 stop: 51.05

COF continues to under perform. The stock lost 3% today and is resting minor support near $46.00. Our target is the $41.50-40.00 zone. The Point & Figure chart is bearish with a $38 target.

Picked on April 13 at $ 48.30
Change since picked: - 1.92
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 9.0 million

---

Fannie Mae - FNM - close: 27.13 chg: -0.79 stop: 30.26

FNM is still slipping lower following the failed rally at $30.00. FNM has already exceeded our target at the $25.25 mark. Our second target is the $21.00-20.00 zone.

Picked on April 08 at $ 29.00 /1st target exceeded 25.25
Change since picked: - 1.87
Earnings Date 05/27/08 (unconfirmed)
Average Daily Volume = 26.5 million

---

Humana Inc - HUM - cls: 41.88 chg: -1.39 stop: 44.55 *new*

United Health (UNH) reported earnings this morning and missed estimates. Plus, UNH guided lower. The HMO healthcare index lost 4.7%. Shares of HUM slipped 3.2% and closed under short-term support near $42.00. Tomorrow we'll get another earnings report from Wellpoint (WLP). We are lowering our stop on HUM to $44.55. 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: - 3.32
Earnings Date 04/28/08 (confirmed)
Average Daily Volume = 4.4 million

---

Sears Holding - SHLD - close: 96.52 chg: -0.96 stop: 101.55

Yesterday the big news was SHLD losing credit with BAC. Today there was more news about specialty retailers that might go bankrupt because banks won't lend them any credit. The RLX retail index dropped 2.2%. SHLD hit an intraday low of $94.75 before bouncing back. Look for a failed rally in the $99-100 zone as a new entry point to buy puts on SHLD. Our initial target is the $90.50-90.00 zone. More aggressive traders may want to aim for the $85 region. The P&F chart points to an $86 target. We would not want to hold over the late May earnings report.

Picked on April 21 at $ 97.48
Change since picked: - 0.96
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.1 million

---

United States Oil - USO - close: 95.08 chg: +0.70 stop: 96.51

We warned readers that USO would continue to rally today. Crude oil traded near $120 a barrel and the USO hit a high of $95.83. This ETF looks extremely overbought with a non-stop rally from its bounce near $80.00. The expiration of oil futures tonight should spark some profit taking tomorrow. Our first target is the $88.50-88.00 zone.

Picked on April 21 at $ 94.38
Change since picked: + 0.70
Earnings Date 00/00/00
Average Daily Volume = 5.9 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.)

---

Goldman Sachs - GS - cls: 179.76 chg: -0.64 stop: n/a

GS has been trading sideways the last couple of days. Overall we don't see any changes to our strangle play. 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.

Picked on April 06 at $175.40
Change since picked: + 4.36
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million

---

Merrill Lynch - MER - cls: 46.50 chg: +0.09 stop: n/a

It looks like MER is just meandering sideways but the intraday chart suggests the stock is poised to rally higher. 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.

Picked on April 15 at $ 43.34
Change since picked: + 3.16
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 30.6 million
 

Dropped Calls

CH Robinson Worldwide- CHRW - cls: 59.36 chg: +0.12 stop: 57.74

Today was our last day for CHRW. It was our plan to exit at the closing bell to avoid holding over earnings. The company did announce and beat Wall Street estimates by 2 cents. The stock was trading higher near $60.50 in after hours.

Picked on April 15 at $ 58.25
Change since picked: + 1.11
Earnings Date 04/22/08 (confirmed)
Average Daily Volume = 1.9 million

---

DryShips Inc. - DRYS - close: 82.99 chg: +8.38 stop: 69.75

Target exceeded. Shares of DRYS exploded higher today and broke through potential resistance at the $80.00 mark. The intraday high was $83.30. Our target was the $79.00-80.00 zone. Driving the move was news that DRYS plans a tender offer for the "minority of Norwegian offshore drilling services company Ocean Rig ASA it does not own" (source:AP).

Picked on April 15 at $ 70.32 /target exceeded
Change since picked: +12.67
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.2 million

---

Ultra Petrol. - UPL - close: 86.38 chg: -0.68 stop: 81.50

As expected crude oil rallied toward $120. This lifted shares of UPL to an intraday high of $88.00. That's too bad because our target was at $88.50. We altered our plan last night to close this play on Tuesday afternoon to avoid any sell-off in crude oil following futures expiration. We'll keep an eye on UPL for another entry point down the road.

Picked on April 10 at $ 81.50 /exit early 86.38
Change since picked: + 4.88
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 1.4 million

---

ExxonMobil - XOM - cls: 94.39 chg: +0.13 stop: 91.95

Target achieved. The strength in oil helped lift XOM toward resistance at the $95.00 level. The intraday high was $94.93. Our target was the $94.85-95.00 zone. The stock is short-term oversold and due for a correction. Nimble traders might actually want to consider buying puts here with a stop loss above $95.00 and a target in the $91-90 zone.

Picked on April 15 at $ 90.80 /target hit 94.85
Change since picked: + 3.59
Earnings Date 05/01/08 (confirmed)
Average Daily Volume = 26.2 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

Play Update Archives