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Call Updates

Aracruz Celulose - ARA - cls: 80.60 chg: +4.84 stop: 74.75

Wow! It's been a volatile couple of days in ARA. Yesterday the stock plunged as the rally in the U.S. dollar weighed on the Brazilian currency. Today the Brazilian stock market soared to a new high after S&P raised the country's debt rating to investment grade. The Brazilian Bovespa index rose more than 6%. Shares of ARA hit a new all-time high at $82.79 and closed up 6.3% inline with its home market. 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: + 0.35
Earnings Date 04/07/08 (confirmed)
Average Daily Volume = 481 thousand

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Alliant Tech - ATK - close: 109.98 chg: +0.41 stop: 105.99

ATK continues to trade sideways and did not see the same volatility that the rest of the market did. We still don't see any changes from our previous comments. 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: + 3.98
Earnings Date 05/08/08 (confirmed)
Average Daily Volume = 246 thousand

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Cytec Ind. - CYT - close: 59.01 change: -0.34 stop: 57.95

Wednesday was a relatively quiet day for CYT. The stock traded in a $1.12 range. The sad news is that the short-term trend of lower highs is suggesting a possible breakdown under the $58.50 level. Wait for signs of a bounce before considering new bullish positions. Conservative traders might want to consider a stop loss closer to $58.50. 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: - 1.63
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 556 thousand

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HSBC - HBC - close: 86.79 change: +1.04 stop: 83.90

HBC gapped open higher to a new multi-month high this morning. The rally was due to Goldman Sachs upgrading the stock from a "sell" to a "buy". We would look for a dip anywhere in the $86.50-85.50 zone as a new entry point for bullish positions. 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: + 0.60
Earnings Date 03/08/08 (confirmed)
Average Daily Volume = 1.7 million

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Hovnanian - HOV - close: 11.82 chg: -0.37 stop: 10.74 *new*

The homebuilders plunged following the rate cut news. The HGX index lost 2.8%, the DJUSHB index lost 5.6% and shares of HOV fell 3% by the closing bell. This is a bearish engulfing candlestick near resistance for HOV, which suggests the next move is lower. We would not consider new bullish positions again until we see a bounce probably near $11.00. We are raising our stop loss to $10.74. 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: - 0.04
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Intl.Bus.Mach. - IBM - cls: 120.70 chg: -2.15 stop: 118.49

IBM also reversed lower following the rate cut news. Shares fell through short-term support near $122 and hit an intraday low of $120.50. We've been suggesting that readers buy calls in the $120.75-120.00 zone. It looks like IBM will hit the $120 region tomorrow. Since the $120 region is prior resistance it should be support. We 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 30 at $120.75 *triggered
Change since picked: - 0.05
Earnings Date 04/16/08 (confirmed)
Average Daily Volume = 8.8 million

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iShares Russ.2000 - IWM - cls: 71.40 chg: -0.34 stop: 69.49

Small cap stocks were no exception to the market volatility today. The post-fed move saw a spike higher and then a quick reversal. A dip or bounce near $70.00 could be used as a new bullish entry point. 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: - 1.15
Earnings Date 00/00/00
Average Daily Volume = 84.6 million

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iShares DJ Transports - IYT - cls: 92.36 chg: -0.82 stop: 87.79

The transports followed the market lower. After four days of gains this sector reversed with the rest of the market and closed near its lows following the FOMC decision. Use a dip or a bounce near $90.00 as a new bullish entry point. 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: + 0.88
Earnings Date 00/00/00
Average Daily Volume = 1.4 million

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Joy Global - JOYG - close: 74.25 chg: +0.43 stop: 69.95

JOYG was under performing all day but that changed when the market turned lower and shares of JOYG continued to churn sideways. We remain bullish but we're not suggesting new positions at this time. 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: + 1.70
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = 2.3 million

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Nucor - NUE - close: 75.50 change: +0.42 stop: 69.75

NUE bounced around a $2.00 range all day and closed off its best levels of the session. NUE looks like it wants to dip toward $74 maybe $73 again. 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: + 0.87
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 5.6 million

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Textron - TXT - cls: 61.01 change: +0.32 stop: 58.90

TXT out performed the market by posting a gain today. The stock is still trading sideways. We can probably still buy dips near $60.00. 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: - 0.38
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 2.1 million
 

Put Updates

United States Oil - USO - cls: 92.50 chg: -0.49 stop: 96.55

A jump in crude oil supplies in the weekly inventory report pushed crude oil lower. However, the bulls haven't given up and news that the U.S. had sent another aircraft carrier to the Persian Gulf due to an "increasingly hostile Iran" sent ripples through the oil market. 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 $ 94.388
Change since picked: - 1.88
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: 191.37 chg: -1.31 stop: n/a

GS bounced around a $5.00 trading range before closing fractionally in the red. 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: +15.97
Earnings Date 06/12/08 (unconfirmed)
Average Daily Volume = 14.5 million

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Merrill Lynch - MER - cls: 49.83 chg: +0.01 stop: n/a

For the most part MER ignored the market volatility today. Shares have been quietly hovering around the $50.00 mark for three days in a row. 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: + 6.49
Earnings Date 04/17/08 (confirmed)
Average Daily Volume = 30.6 million
 

Dropped Calls

Fluor - FLR - close: 152.87 chg: -3.02 stop: 152.49

We have been stopped out of FLR. The stock continued to under perform following weakness on Friday and Monday. Shares produced a failed rally under $160 today and slipped under its April 24th low at $152.57. The stock hit our stop loss at $152.49. We've been telling readers to take profits and lock in a gain for several days. FLR had already hit our target in the $159.00-160.00 zone. The recent highs were $163.25.

Picked on April 01 at $146.50 *triggered /1st target hit $159
Change since picked: + 6.37
Earnings Date 05/12/08 (confirmed)
Average Daily Volume = 2.3 million

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Nike Inc. - NKE - close: 66.80 chg: -1.43 stop: 66.74

We were trying to play NKE with a relatively tight stop loss. The stock wasn't performing as expected but short-term support was holding - until the post-fed sell-off began. NKE hit our stop loss at $66.74 and closed near its lows for the day. Keep an eye on it for support near $65.00 and its rising 50-dma.

Picked on April 27 at $ 68.74 /stopped 66.74
Change since picked: - 1.94
Earnings Date 06/26/08 (unconfirmed)
Average Daily Volume = 4.0 million

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Public Storage - PSA - cls: 90.70 change: -2.10 stop: 91.95

PSA has reversed in the last three sessions and the post-Fed market sell-off was too much. PSA plunged through short-term support near $92.50 and hit our stop loss at $91.95. Almost all of the short-term technical indicators have turned bearish.

Picked on April 22 at $ 94.10 /stopped 91.95
Change since picked: - 3.40
Earnings Date 05/01/08 (unconfirmed)
Average Daily Volume = 1.6 million
 

Dropped Puts

Mastercard - MA - close: 278.16 chg: + 4.18 stop: 281.01

Our speculative, high-risk put play on MA did not get off to a great start. Shares gapped open higher at $276.00 and spiked to $282.96 before paring its gains. Needless to say MA hit our stop loss at 281.01. The stock is still overbought and we'd still expect some significant profit taking before it moves significantly higher.

Picked on April 29 at $273.98 /stopped out 281.01
Change since picked: + 4.18
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 3.1 million
 

Dropped Strangles

None
 

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