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Call Updates

Aracruz Celulose - ARA - cls: 77.98 chg: -0.95 stop: 74.75

ARA failed to breakout over the $80.00 level today. Overall we don't see any changes from our previous comments. We're suggesting a trigger to buy calls at $80.25. The stock has been somewhat volatile this past week so we're using a wide, aggressive stop loss at $74.75 and more conservative traders may want to use a stop near $77 instead. If triggered at $80.25 we have two targets. Our first target is the $84.50-85.00 range. Our second target is the $88.50-90.00 zone. Currently the Point & Figure chart is bearish but a new rise over $80.00 would produce a brand new triple-top breakout buy signal.

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/07/08 (confirmed)
Average Daily Volume = 481 thousand

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Alliant Tech - ATK - close: 108.74 chg: +1.68 stop: 104.85

Defense stocks performed well on Thursday. ATK rose 1.5% and finally broke through technical resistance at its 100-dma and 200-dma although volume was exceptionally low, which is not normally a good sign for a rally. 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: + 2.74
Earnings Date 05/08/08 (confirmed)
Average Daily Volume = 246 thousand

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Express Scripts - ESRX - close: 71.58 chg: -0.77 stop: 67.45

ESRX continues to look good. Traders bought the dip at $70.00 this morning. The intraday high today was $72.43. Our first target is the $72.50 level. More conservative traders may want to start taking profits right here. 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: + 4.08
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 3.1 million

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Fluor - FLR - close: 157.05 chg: -2.45 stop: 149.85

FLR hit some profit taking today. The stock plunged to $152.57 this morning and bounced back to the $159 level before rolling over again. Short-term FLR looks weak and likely to dip again tomorrow. Yet the general trend is still up. More conservative traders might want to raise their stop toward the $152.50 zone. 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: +10.55
Earnings Date 05/12/08 (confirmed)
Average Daily Volume = 2.3 million

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Hovnanian - HOV - close: 11.56 chg: +0.32 stop: 10.45

It was an impressive day for the homebuilders. The group rallied sharply in the face of a terrible new home sales report this morning. The DJUSHB index is up 5% on the day while the HGX index is up 3.1%. Shares of HOV rebounded from $10.85 and closed up 2.8%. This looks like a new entry point to buy calls. We're leaving our stop at $10.45 but more conservative traders could put their stop under today's low. 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: - 0.30
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Intl.Bus.Mach. - IBM - cls: 124.19 chg: +0.59 stop: 118.49

IBM has been trading sideways for five days in a row. The trading range appears to be $122.50-125.00. We would prefer to buy a dip closer to $120 so we're sticking with our plan. Our suggested entry range is 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

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Joy Global - JOYG - close: 73.40 chg: -1.71 stop: 69.95

Just about anything commodity related, even JOYG which provides mining equipment, was trading lower today. Rival BUCY plunged 5% today ahead of its earnings report out tonight. We've not seen any results yet from BUCY but their performance and comments could have a big impact on JOYG tomorrow. Thus far JOYG is holding short-term support near $72.00. A bounce from here or a bounce near $70.00 can be used as a new entry point for calls. 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: + 0.85
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Nucor - NUE - close: 73.45 change: -1.79 stop: 68.99

NUE slipped 2.3% today as metal-related stocks hit some profit taking. A rebound from here would be another entry point but should NUE slip again tomorrow we'd watch for a bounce anywhere above $70.00 as a potential entry point. We are using a wide, aggressive stop loss to give NUE room to maneuver. 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: - 1.18
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 5.6 million

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Public Storage - PSA - cls: 97.12 change: +2.68 stop: 91.95

PSA out performed the markets with a 2.8% gain and a new nine-month high. 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: + 3.02
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 1.6 million
 

Put Updates

Ambac Fincl. - ABK - cls: 3.76 change: +0.30 stop: 6.05

After a 42% drop on Wednesday we had to expect some sort of dead-cat bounce today. Shares rose 8.6% following some mixed comments by analysts. Moody's reiterated their negative outlook on the company suggesting ABK's triple-A rating is still in jeopardy. One analyst firm lowered their price target to $4.00. We are not suggesting new positions. Traders need to be looking for the exits not starting new bearish plays. With the stock this cheap people might start speculating that it can't get any lower and shares will probably become even more susceptible to rumor and headlines if that's even possible. We had been suggesting the May $5.00 and $2.50 strikes. We'll probably drop ABK from the newsletter this weekend. That doesn't necessarily mean you need to close your positions tomorrow but we do need to be planning an exit.

Picked on January 27 at $ 11.54
Change since picked: - 7.78
Earnings Date 04/23/08 (confirmed)
Average Daily Volume = 10.9 million

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Capital One - COF - close: 48.45 chg: +2.53 stop: 50.26

Strength in the financials today sparked some buying (or short covering) in COF. The stock rallied 5.5%. Shares "should" find resistance near $50.00 but it's not a guarantee. We are not suggesting new bearish plays at this time. 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: + 0.15
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 9.0 million

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Fannie Mae - FNM - close: 28.03 chg: +1.73 stop: 30.26

It is the same story here. Strength in the financial stocks fueled some short covering and FNM rose 6.5%. Ouch! Readers may want to drop their stop loss toward the $29.00 level. 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: - 0.97
Earnings Date 05/27/08 (unconfirmed)
Average Daily Volume = 26.5 million

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Sears Holding - SHLD - close: 97.00 chg: +0.05 stop: 101.55

SHLD is holding in there, trading sideways in the $95-98 zone. Lack of follow through lower is somewhat concerning but we remain bearish. Shares did appear to be rolling over this afternoon. More conservative traders might consider a tighter stop near $100.00. 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: - 0.48
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.1 million

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United States Oil - USO - cls: 93.20 chg: -1.98 stop: 97.05

It was a rocky day for crude oil but the sell-off has definitely started. The USO dipped to $92.06 before paring its losses. It still closed with a 2% decline. We are inching our stop loss down to $96.55. You could probably get away with a stop closer to $96.00. Our first target is the $88.50-88.00 zone.

Picked on April 21 at $ 94.38
Change since picked: - 1.18
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.)

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Goldman Sachs - GS - cls: 188.79 chg: +9.44 stop: n/a

After days of hovering around $180 we're finally seeing some movement in GS. The stock soared 5% and broke through its 100-dma as financials rallied on Thursday. We're not suggesting new strangle positions. 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: +13.39
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million

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Merrill Lynch - MER - cls: 48.09 chg: +3.18 stop: n/a

The broker-dealers were some of the market's best performers today. Shares of MER rose more than 7% and closed above its 50-dma. 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: + 4.75
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 30.6 million
 

Dropped Calls

Ashland Inc. - ASH - close: 50.78 change: +0.17 stop: 49.85

ASH has been under performing the last few days and the stock broke down under support at $50.50 and $50.00 today. Shares tagged our stop loss at $49.85 closing the play.

Picked on April 06 at $ 51.25
Change since picked: - 0.47
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 774 thousand

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General Cable - BGC - close: 70.31 chg: -1.44 stop: 64.99

We are running out of time with BGC. Our strategy still works, waiting for a dip in the $68.50-67.50 zone, but we just don't have much time left. We've been waiting on BGC for a few days now. The company is due to report earnings on April 29th and we don't want to hold over the report. We're dropping BGC as a candidate.

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

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CurrencyShares Euro - FXE - cls: 157.25 chg: -2.03 stop: 157.49

A rally in the U.S. dollar weighed on gold and foreign currencies. The FXE Euro gapped open lower at $157.39. This is a breakdown under its supporting trendline of higher lows. Our stop was at $157.49 so the opening trade closed our play. This may turn out to be a potential entry point for bearish plays with a stop above the recent high.

Picked on April 13 at $158.57
Change since picked: - 1.32
Earnings Date 00/00/00
Average Daily Volume = 307 thousand
 

Dropped Puts

Humana Inc - HUM - cls: 43.06 chg: -1.10 stop: 44.55

We have been tightening our stop loss on HUM and it finally got hit. HUM spiked to $44.72 this morning before plunging lower again. Our stop was at $44.55. The healthcare stocks have been somewhat resilient in spite of a string of companies all lowering their 2008 earnings guidance. That doesn't mean we'd be buyers here but it's not good news for the bears.

Picked on March 30 at $ 45.20
Change since picked: - 2.14
Earnings Date 04/28/08 (confirmed)
Average Daily Volume = 4.4 million
 

Dropped Strangles

None
 

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