Option Investor
Play Updates

In Play Updates and Reviews

HAVING TROUBLE PRINTING?
Printer friendly version

Call Updates

Ashland Inc. - ASH - close: 50.60 change: -0.77 stop: 49.85

ASH continues to under perform. The stock lost 1.47% today although bulls continue to defend ASH near $50.50. We are growing concerned given this recent two-day pull back. More conservative traders might want to consider an early exit now to cut their losses. We're going to stick it out for now since the $50.00-50.50 zone is holding as support thus far. 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: - 0.65
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 774 thousand

---

Alliant Tech - ATK - close: 106.95 chg: +0.75 stop: 104.85

ATK is essentially trading sideways but if you look at the intraday chart the bias seems to be bullish. We would still be buyers here but readers might want to wait for the breakout over its 100-dma (near $107.45) or the 200-dma (near 108.20). We have two targets. Our first target is the $109.90-110.00 zone. Our second target is the $114.00-115.00 range. 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: + 0.95
Earnings Date 05/08/08 (confirmed)
Average Daily Volume = 246 thousand

---

General Cable - BGC - close: 71.75 chg: +0.05 stop: 64.99

We do not see any changes from our previous comments. More aggressive traders might want to buy these bounces from the $70.00 level. 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: 72.35 chg: +2.77 stop: 67.45*new*

It was another strong day for ESRX. The stock broke through the $70.00 level and closed near its highs with a 3.9% gain. Shares are very close to our first target at $72.50. Prepare to take some profit off the table tomorrow. Our second target is the $74.85-75.00 zone. 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. FYI: We are raising the stop loss to $67.45.

Picked on April 21 at $ 67.50 *triggered
Change since picked: + 4.85
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 3.1 million

---

Fluor - FLR - close: 159.50 chg: -0.47 stop: 149.85

There is still no change from our prior 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: +13.00
Earnings Date 05/12/08 (confirmed)
Average Daily Volume = 2.3 million

---

CurrencyShares Euro - FXE - cls: 159.28 chg: -0.82 stop: 157.49

Strength in the U.S. dollar today sent gold futures plunging and the Euro to a minor correction on Wednesday. The trend is still bullish. Readers could launch new positions but you need a tight stop. This is a momentum play and when it runs out of momentum it could fall quickly. 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: + 0.71
Earnings Date 00/00/00
Average Daily Volume = 307 thousand

---

Hovnanian - HOV - close: 11.24 chg: -0.33 stop: 10.45

We warned readers that the DJUSHB home construction index was poised to drop toward its recent lows and that index did hit those lows today with a 3.9% decline. Rival homebuilder PHM is supposed to report earnings out after the closing bell tonight but we haven't seen the announcement yet. PHM's results will probably set the tone for the sector tomorrow or more correctly PHM's guidance and attitude about the business environment. Lately the homebuilders have not offered bulls any good news and the most recent comments out of this group has been "no end in sight" yet for the slow down. In spite of these negative comments the sector appears to be building a bottom over the last few months. That may be great longer-term but short-term, for us, we could get stopped out if the news is very negative. HOV fell 2.8% today and looks like it could dip toward $10.50. We would consider a dip or bounce near $10.50 as a new bullish 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.

Picked on April 16 at $ 11.86
Change since picked: - 0.62
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

---

Intl.Bus.Mach. - IBM - cls: 123.60 chg: -0.07 stop: 118.49

We're starting to wonder if we're waiting in vain. Our plan is to buy a dip in the $120.75-120.00 zone. Traders keep buying the dip in IBM near $122.00-122.65. More aggressive traders might want to jump in now. We're going to stick to our plan. 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: 75.11 chg: +1.42 stop: 69.95

JOYG out performed the market with a 1.8% gain. We remain bullish. 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: + 2.56
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.3 million

---

Nucor - NUE - close: 75.24 change: +0.61 stop: 68.99

NUE is still drifting higher. We would still be buyers here in the May or July calls. We are starting the play with a wide, aggressive stop loss at $68.99. More conservative traders may want to try a stop near $72 instead. Our initial target is the $79.50-80.00 range. Our second, more aggressive target is the $84.00-85.00 zone. The Point & Figure chart is bullish with a $93 target.

Picked on April 22 at $ 74.63
Change since picked: + 0.61
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 5.6 million

---

Public Storage - PSA - cls: 94.44 change: +0.34 stop: 91.95

We don't see any changes from our Tuesday night comments. We would still be buyers here of the June calls. Our target is the $99.50-100.00 range. We'll try and limit our risk with a stop loss at $91.95. We do not want to hold over the early May (unconfirmed) earnings report.

Picked on April 22 at $ 94.10
Change since picked: + 0.34
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 1.6 million
 

Put Updates

Ambac Fincl. - ABK - cls: 6.03 change: +0.09 stop: 6.05

It was hard to hear among all the noise in the market today but that dull thud was ABK falling to a new all-time low. Shares plunged 42.6% to $3.46 after reporting earnings this morning. Wall Street was expecting a loss of $1.51 a share. ABK reported a loss of $6.93 a share. That's a HUGE miss and somewhere in the neighborhood of $1.5 billion in losses. The previous low for the stock was in January at $4.50. Shares hit $3.08 late this afternoon on massive volume. We have had this stock as a put play on the newsletter for a long time and depending on when you opened your position you may or may not have a profit. If you do have a profit, we suggest you take it. Now that the bad news is out the stock might bounce but I doubt it. If it does the $4.50-5.00 levels should be resistance. We're adding a stop loss at $6.05. FYI: The May $5.00 put (GIY-QA) hit a high of $2.10 and is trading at $1.65bid/$1.75ask. The May $2.50 put (GIY-QZ) hit a high of $0.45 and is trading at $0.30bid/$0.35 ask. We are not suggesting new positions.

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: 45.92 chg: -0.46 stop: 50.26*new*

COF slipped to a new four-week low this morning at $45.02 but rebounded from round-number support. We're adjusting our stop loss to $50.26. 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: - 2.38
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 9.0 million

---

Fannie Mae - FNM - close: 26.30 chg: -0.83 stop: 30.26

FNM is still marching lower. Shares lost another 3% today. We're not suggesting new positions at this time. 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: - 2.70
Earnings Date 05/27/08 (unconfirmed)
Average Daily Volume = 26.5 million

---

Humana Inc - HUM - cls: 44.16 chg: +2.28 stop: 44.55

Hmmm... sometimes the stock market doesn't make sense. Yesterday healthcare stocks were lower after United Health (UNH) reported earnings, missed estimates, and guided lower. This morning WellPoint (WLP) reported earnings, missed estimates, and guided lower. Yet shares of WLP rallied. The stock rose 7.2% to a new six-week high. We see no explanation for WLP's relative strength. It could be short covering but the stock didn't have a lot of short interest to begin with. Are investors buying it because they think all the bad news is baked in? At any rate this strength in WLP rubbed off on HUM. HUM rose 5.4% and closed above the $44.00 level. With our stop loss at $44.55 it won't take much to stop us out. It is possible that we'll be saved by another earnings miss. After the closing bell tonight Amerigroup (AGP) reported earnings, actually beat the estimates, but then guided lower. Yup, that's three in a row that have guided lower for 2008. HUM is actually trading down after hours, around $43.35, presumably due to this AGP news. We'll have to wait and see what happens tomorrow. 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: - 1.04
Earnings Date 04/28/08 (confirmed)
Average Daily Volume = 4.4 million

---

Sears Holding - SHLD - close: 96.95 chg: +0.43 stop: 101.55

SHLD is trying to bounce again. Traders bought the dip near $95 for the second day in a row. Given the state of the consumer we can't imagine who is buying retailers right now. Maybe tonight's earnings warning from Starbucks (SBUX) will help push the retailers lower again. SBUX and SHLD are obviously in different businesses but both should be hurting as consumers cut back. Look for a failed rally in SHLD near 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: - 0.53
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.1 million

---

United States Oil - USO - cls: 95.18 chg: +0.10 stop: 97.05*new*

We were surprised to see crude oil futures rising. We've been expecting a sell-off to begin today, Wednesday, following the recent futures expiration. Crude oil did slip this morning but news that the weekly oil inventory report showed a build in inventory failed to spark any heavy selling. Crude oil actually traded higher, up 23 cents to $118.30 a barrel for the current month. The USO inched up a dime. We still think this is near a top and just to give us a little more breathing room we're adjusting the stop loss to $97.05 on the USO. If you want, wait for a drop under today's low of $93.81 to launch new put positions. Our first target is the $88.50-88.00 zone.

Picked on April 21 at $ 94.38
Change since picked: + 0.80
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: 179.35 chg: -0.41 stop: n/a

Yet another day of consolidating sideways for GS. We don't know what investors are waiting for. We would be tempted to consider new strangles here with maybe the May or June options and you'll have to make an adjustment for GS at $180 instead of $175. GS will break one way or the other eventually. Keep in mind that May options only have three weeks left so if you do launch new positions we'd pick June strikes. 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: + 3.95
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million

---

Merrill Lynch - MER - cls: 44.91 chg: -1.59 stop: n/a

MER is under performing the markets and this sideways trading is just killing the options. We only have three weeks left for May strikes. More conservative traders may want to cut your losses now. 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: + 1.57
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 30.6 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

Play Update Archives