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Call Updates

Aracruz Celulose - ARA - cls: 75.76 chg: -3.91 stop: 74.75

Ouch! Shares of ARA lost 4.9% following yesterday's failed rally over $80.00. The media is claiming that strength in the U.S. dollar weighed on the Brazilian currency and this sparked a sharp sell-off in Brazilian markets. The Brazilian Bovespa index lost 2.8%. With ARA still trading near its highs the stock was a big target for investors to sell in a hurry to try and lock in a profit. Shares of ARA look poised to test support near $75.00 soon. A bounce from $75.00 would be another bullish entry point and we'd have a much better risk-reward ratio with a tight stop. If you do buy a dip near $75.00 I suggest locking in some gains near $80.00, which is still resistance. We have two targets. Our first target is the $84.50-85.00 range. Our second target is the $88.50-90.00 zone. As expected the rally over $80.00 did produce a new P&F chart buy signal, which currently points to a $94 target.

Picked on April 28 at $ 80.25 *triggered
Change since picked: - 4.49
Earnings Date 04/07/08 (confirmed)
Average Daily Volume = 481 thousand

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Alliant Tech - ATK - close: 109.57 chg: -0.64 stop: 105.99

We don't see any changes from our previous comments on ATK. The dip may not be over. Look for the $108 level to be short-term support. More conservative traders may want to use a tighter stop in the $107.50 region. Our second target is the $114.00-115.00 range. FYI: As expected a rally over $110 has produced a new P&F chart buy signal that now points to a $133 target. We do not want to hold over the May 8th earnings report.

Picked on April 21 at $106.00 /1st target hit $109.90
Change since picked: + 3.57
Earnings Date 05/08/08 (confirmed)
Average Daily Volume = 246 thousand

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Cytec Ind. - CYT - close: 59.35 change: -1.40 stop: 57.95

CYT spiked lower this morning but traders bought the dip (twice) in the $58.75 region. The afternoon bounce looks like a new bullish entry point to buy calls. We're starting the play with a stop loss at $57.95 but you could probably try a stop at $58.45 instead. We have to label this a more aggressive play because the spreads on the options are pretty wide. There isn't much we as traders can do about that except try to minimize its impact with good entry and exit strategy. We're listing two targets. Our first target is the $64.75-65.00 range. Our second target is the $68.00-70.00 zone.

Picked on April 27 at $ 60.64
Change since picked: - 1.29
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 556 thousand

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Fluor - FLR - close: 155.89 chg: -2.95 stop: 152.49

FLR just hit a second day of profit taking. We've been suggesting that readers do that with their calls for over a week now - profit taking. A bounce from $155 could be used as a new bullish entry point but consider ratcheting up your stop loss a little. The momentum looks like it's fading a bit and while it's only Tuesday the current weekly candlestick is looking bearish. 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: + 9.39
Earnings Date 05/12/08 (confirmed)
Average Daily Volume = 2.3 million

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HSBC - HBC - close: 85.75 change: -0.10 stop: 83.90

HBC continues to trade sideways. Yesterday we suggested that a bounce near $85.50 or $85.00 could be used as another bullish entry point and HBC dipped to $85.43 this morning. An alternative entry point would be to wait for another rally over $86.25 again. We have two targets. Our short-term target is the $89.75-90.00 range. Our more aggressive, longer-term target is the $94.00-95.00 zone. The P&F chart is bullish with a $113 target.

Picked on April 28 at $ 86.19 *triggered/gap higher
Change since picked: - 0.44
Earnings Date 03/08/08 (confirmed)
Average Daily Volume = 1.7 million

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Hovnanian - HOV - close: 12.19 chg: +0.15 stop: 10.45

The homebuilders delivered a quiet day in spite of some negative industry news. The S&P/Case-Shiller home price index of 20 cities is showing a 12.7% drop in year-over-year price declines in February. That's worse than the 7.7% median drop we saw a few days ago. This 12.7% plunge was the largest decline since the index started in 2001 (source:AP). The hottest markets during the boom like Las Vegas, Phoenix and Miami, were the hardest hit with 20% declines in home prices. Shares of HOV weathered the news and actually posted a gain today. We have two targets. Our first target is the $13.50-14.00 zone. Our second, more aggressive target is the $14.75-15.00 zone. FYI: The P&F chart is bullish with a $25 target. HOV still has a high amount of short interest. The most recent data listed short interest at almost 65% of the 37.2 million-share float. That really raises the odds of a short squeeze, which would be great for us.

Picked on April 16 at $ 11.86
Change since picked: + 0.33
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Intl.Bus.Mach. - IBM - cls: 122.85 chg: +1.16 stop: 118.49

IBM was starting to correct yesterday with the drop under $122 but shares rebounded today on news the company is raising its dividend. IBM announced it was upping its dividend by 25% to 50 cents a share. 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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iShares Russ.2000 - IWM - cls: 71.74 chg: -0.64 stop: 69.49

As the market waits for the latest Fed decision the small cap stocks slipped to their 10-dma and bounced. We remain bullish and don't see any changes from our prior comments. Our four to six-week target is the $77.50-80.00 zone. The P&F chart is bullish with an $87 target.

Picked on April 28 at $ 72.55 *triggered
Change since picked: - 0.81
Earnings Date 00/00/00
Average Daily Volume = 84.6 million

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iShares DJ Transports - IYT - cls: 93.18 chg: +0.74 stop: 87.79

A sharp plunge in the price of oil helped the transports post another gain lead by big rebounds in the airline stocks. The IYT hit another new relative high and closed near its highs for the session. We have two targets. Our short-term target is the $94.85-95.00 range. Our longer-term eight-week target is the $98.00-100.00 zone.

Picked on April 27 at $ 91.48
Change since picked: + 1.70
Earnings Date 00/00/00
Average Daily Volume = 1.4 million

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Joy Global - JOYG - close: 73.82 chg: -3.08 stop: 69.95

No one said the stock market was logical. This morning an analyst raised their earnings estimates and their price target on JOYG but the stock plunges instead. Obviously we don't think the analyst opinion had any affect on the stock. JOYG joined a lot of recent winners that suddenly ran into some profit taking. The $72.00 level is short-term support and another bounce north of $72 can be used as a new entry point. More conservative traders might want to raise their stop toward $72.00. 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: + 1.27
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Nike Inc. - NKE - close: 68.23 chg: +0.41 stop: 66.74

Yesterday we suggested that readers buy a bounce in NKE and the stock delivered one today. We remain bullish but more conservative folks may want to wait for a rally over $69.00 or $70.00 to initiate positions. More aggressive traders may want to use a stop under true support near $65.00. Our target is the $74.00-75.00 range. The P&F chart is bullish with an $83 target.

Picked on April 27 at $ 68.74
Change since picked: - 0.51
Earnings Date 06/26/08 (unconfirmed)
Average Daily Volume = 4.0 million

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Nucor - NUE - close: 75.08 change: -1.92 stop: 69.75

NUE just erased a good chunk of our unrealized gains with 2.5% drop in the stock price. Almost anything commodity-related including steel stocks were trading lower as the U.S. dollar rallied. Traders did step in to buy the dip in NUE near its rising 10-dma. We remain bullish here. More conservative traders may want to consider a stop closer to $72.00 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: + 0.45
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 5.6 million

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Public Storage - PSA - cls: 92.80 change: -2.70 stop: 91.95

What happened to PSA? We just went from +1.40 to -1.30 with today's 2.8% decline. Most of the weakness was this morning and we can't find any news or catalyst that might explain the relative weakness. Many of the short-term technicals have naturally started to turn bearish. We're not suggesting new positions at this time. We do not want to hold over the early May (unconfirmed) earnings report. Note: the May earnings report is still a mystery. One source is suggesting PSA reports on May 1st while another is suggesting the company reports in the May 5th-10th range. If we don't see something soon to confirm an announcement date we may end up closing the play early just to be safe.

Picked on April 22 at $ 94.10
Change since picked: - 1.30
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 1.6 million

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Textron - TXT - cls: 60.69 change: -0.39 stop: 58.90

We don't see any changes from our previous comments on TXT. The stock is trading sideways and we would still consider new positions here. Our short-term target is the $64.85-65.00 zone. Our secondary, more aggressive target is the $68.00-70.00 range. The Point & Figure chart is bullish with an $83 target.

Picked on April 27 at $ 61.39
Change since picked: - 0.70
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 2.1 million
 

Put Updates

United States Oil - USO - cls: 92.99 chg: -2.70 stop: 96.55

The rally in oil may finally be starting to break down. Crude oil plunged about $3 a barrel after flirting with highs near $120 the last few days. The USO lost 2.8% and closed under its 10-dma. We would consider new put positions here. Our first target is the $88.50-88.00 zone. Do not be surprised to see the USO bounce on its initial test of $90.00.

Picked on April 21 at $ 94.38
Change since picked: - 1.39
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: 192.68 chg: +2.44 stop: n/a

GS continues to show relative strength as it tries to push past the exponential 200-dma. We have less than three weeks left for May options so we need to see GS continue higher. 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: +17.28
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million

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Merrill Lynch - MER - cls: 49.82 chg: +0.02 stop: n/a

MER has run into something of a road block with resistance near $50.00. Bulls can be somewhat optimistic here. The stock does have a short-term trend of higher lows suggesting it will breakout higher. We're not suggesting new strangle 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: + 6.48
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 30.6 million
 

Dropped Calls

Express Scripts - ESRX - close: 71.47 chg: -2.09 stop: 69.99

It was our plan to exit today in ESRX to avoid holding over the company's earnings report. We've been suggesting readers take profits for a couple of days now. ESRX has already exceeded our first target at $72.50 and traded to $74.25 twice but it wasn't enough to tag our secondary target at $74.85. The company reported after the closing bell this evening and beat estimates by 3 cents but missed the revenue estimate. The stock is currently trading lower near $69.00 in after hours markets.

Picked on April 21 at $ 67.50 *1st target achieved 72.50
Change since picked: + 3.97
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 3.1 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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