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Call Updates

Alliant Tech - ATK - close: 107.11 change: +1.83 stop: 102.95

The widespread market rebound really helped fuel the bounce in shares of ATK. The stock added 1.7% and broke through potential resistance at its 10-dma and exponential 200-dma. Readers looking for new positions may want to look for a dip back to $106 or $105. We're using a stop loss under the recent low. We have two targets. The 200-dma is near $109.00. We're setting the first target at $108.75. Our second target is the $111.00 mark.

Suggested Options:
If ATK provides another entry point we would use the July calls.

Picked on June 12 at $105.28
Change since picked: + 1.83
Earnings Date 07/31/08 (unconfirmed)
Average Daily Volume = 244 thousand

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Peabody Energy - BTU - close: 77.59 change: +1.64 stop: 74.90

The fundamental story for coal seems to be very bullish. However a lot of stocks in this group are growing more and more overbought on a daily basis. Eventually there will be a correction and it will probably be a sharp and painful pull back. BTU is unlikely to avoid this sell-off when it finally occurs. I'm suggesting that readers trade cautiously. Right now the trend is still up for BTU and Friday's bounce could be a new entry point but I am on guard for a reversal. Some of the technical indicators for BTU don't look that strong. This stock has exceeded our target near $80 several times. Our secondary target is the $84.00-85.00 zone.

Suggested Options:
We're not suggesting new positions in BTU at this time.

Picked on June 01 at $ 73.92 /1st target exceeded 79.75
Change since picked: + 3.67
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 5.8 million

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Diamonds - DIA - close: 123.10 change: +1.47 stop: 120.85 *new*

Right on cue the DIA provided a bounce. I'm only expecting a short-term rebound before it rolls over again. Our target is the $124.50 mark. However, keep a close eye on the $124.00 level. If DIA fails there we'll want to jump out. More aggressive traders could aim for the $125.00 level as their target. We're inching up our stop loss to $120.85.

Suggested Options:
Friday was our entry point so we're not suggesting new positions but nimble traders might want to consider July calls.

Picked on June 12 at $121.63
Change since picked: + 1.47
Earnings Date 00/00/00
Average Daily Volume = 12.9 million

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United States Oil - USO - close: 109.20 chg: -2.07 stop: 105.95

Excellent! The USO provided a dip so we could open bullish positions at a more attractive level. The oil ETF gapped open lower at $108.92 and then traded sideways. As Jim mentioned in the market wrap today next week could be very volatile for crude oil. If OPEC, or more specifically the Saudis, decide to up their production levels then this headline, whether it occurs or not, could push oil prices lower. However, the real influence behind oil this week should be short covering. Oil options expire on Wednesday and oil futures expire on Friday. There will be pressure to cover those shorts ahead of expiration. Our first target is the $114.90 mark. Our second target is $118.00. We strongly suggest you take some profits at the first target.

Suggested Options:
We are suggesting the June or July calls. This should be a very short-term move otherwise we would not play June calls this close to expiration (this coming Friday). Strikes are available at $1.00 increments. I want to reiterate that June options are going to be very fragile. Any move lower is going to crush them with just five days left.

BUY CALL JUN 110.00 IYS-FF open interest= 7648 current ask $2.60
BUY CALL JUN 114.00 IYS-FJ open interest= 2235 current ask $1.25

BUY CALL JUL 110.00 IYS-GF open interest=23781 current ask $6.30
BUY CALL JUL 113.00 IYS-GI open interest= 4998current ask $5.00
BUY CALL JUL 115.00 IYS-GK open interest= 2892 current ask $4.30

Picked on June 12 at $111.27
Change since picked: - 2.07
Earnings Date 00/00/00
Average Daily Volume = 11.4 million
 

Put Updates

Emerging Markets 50 ADR - ADRE - cls: 52.37 chg: +0.47 stop: 55.01*new*

The ADRE is still trying to bounce. We suspect that this ETF will bounce back to the $53.50-54.00 zone before rolling over again. If you are looking for a new entry point then wait for a failed rally under $54.00. We are adjusting the stop loss to $55.01. Our target is the $51.00-50.00 zone.

Suggested Options:
We are not suggesting new put positions at this time.

Picked on June 03 at $ 54.69
Change since picked: - 2.32
Earnings Date 00/00/00
Average Daily Volume = 448 thousand

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Caterpillar - CAT - close: 81.50 change: +1.00 stop: 83.55 *new*

We were expecting a bounce in CAT back to the $81.50-82.50 zone and that's what the stock delivered. Friday's move looks like a new entry point to buy puts but readers may want to wait for the rebound in the DJIA and S&P to run out of steam first, which shouldn't take too long. More aggressive traders may want to widen their stop toward $84.00. We're going to adjust our stop loss to $83.55 to give CAT just a little more room. Our target is the $75.25 mark. The stock "should" see some technical support at its 200-dma near $75.00.

Suggested Options:
We would suggest the July $85, 80 or $75 puts.

Picked on June 11 at $ 79.45 *triggered
Change since picked: + 2.05
Earnings Date 07/18/08 (unconfirmed)
Average Daily Volume = 6.2 million

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Deere & Co. - DE - close: 77.92 change: -0.04 stop: 82.55

The first thing you might notice looking at DE's chart is that the stock did not participate in Friday's market rally. DE broke down from its trading range on Thursday and continues to show relative weakness. We would still consider new put positions here at current levels. Or, if DE does bounce, then look for a failed rally in the $80 region. Our target is the $70.50 mark. The Point & Figure chart is forecasting a $72 target.

Suggested Options:
We are suggesting the July puts. The $80 and $75 strikes should work well.

Picked on June 12 at $ 78.49 *triggered
Change since picked: - 0.57
Earnings Date 08/13/08 (unconfirmed)
Average Daily Volume = 5.4 million

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DaVita Inc. - DVA - close: 50.47 chg: +1.13 stop: 53.01

DVA is starting to cooperate with a bounce. Shares rallied 2.2% on Friday and regained the $50 level and closed above its 100-dma. We expect the bounce to fail in the $51.50-52.50 zone. Thus we're suggesting readers buy puts in the $51.00-52.00 range. If triggered we have two targets. Our first target is 47.75-47.50. Our second target is the $45.15-45.00 zone. The P&F chart is bearish with a $45 target. FYI: Last month DVA announced a $250 million stock buy back program. At $50 a share that's about 5 million shares. DVA has about 104 million shares outstanding.

Suggested Options:
We are suggesting the July puts. The $50 and $45 strikes should work well.

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/31/08 (unconfirmed)
Average Daily Volume = 606 thousand

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Electronic Arts - ERTS - close: 46.99 chg: +1.00 stop: 49.05

We have been expecting a bounce back toward resistance at $48.00. Wait for a failed rally near $48.00 before considering new put positions. More conservative traders might want to tighten their stops closer to the $48 level. Our target is the February lows near $44.50-44.00.

Suggested Options:
If ERTS provides another entry point we would use the July puts. The $50 and $45 strikes would probably work best.

Picked on June 06 at $ 47.75 *triggered
Change since picked: - 0.76
Earnings Date 07/31/08 (unconfirmed)
Average Daily Volume = 3.7 million

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3M Co. - MMM - close: 76.12 chg: +0.57 stop: 77.05

We do not see any changes from our Thursday night comments. If MMM bounces again look for short-term resistance near $76.75. The last several weeks has seen the stock sort of stair-step down so we should see it step down soon. We do want to point out that MMM appears to have produced a bullish wedge pattern over the last eight weeks. A breakout above its trendline of lower highs would be very bullish. We have two targets. Our first target is the $70.25-70.00 zone. Our secondary target is the $67.00-65.00 range. The P&F chart is bearish with a $69 target. FYI: If you are aiming for the $67 target then you might want to consider the October puts.

Suggested Options:
We have been suggesting the July puts. However, readers may want to use October strikes. Consider waiting for a new decline under $75.00 before opening positions.

Picked on June 06 at $ 74.95 *triggered
Change since picked: + 1.17
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 4.0 million

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Monsanto - MON - close: 137.26 change: +2.33 stop: 140.55

Our aggressive put play in MON might backfire on us. The general trend still looks like MON is poised to move lower after its failed rallies near resistance (see chart). Yet MON may tag the trendline one more time and that would mean hitting our stop loss in the process. Keep a sharp eye on the $140 level. A failed rally near $140 would be a great entry point to open new (and still aggressive) put positions. Remember, we're long-term bullish on MON and this industry and we're just trying to capture a short-term correction. A dip toward $125 would look like a possible entry point to buy calls. Our target is the $126.50 mark. We do not want to hold over the June 25th earnings report.

Suggested Options:
We have been suggesting the July puts but wait for a new failed rally before considering new positions.

Picked on June 11 at $133.40
Change since picked: + 3.86
Earnings Date 06/25/08 (confirmed)
Average Daily Volume = 6.5 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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Amgen Inc. - AMGN - close: 43.97 chg: +0.75 stop: n/a

AMGN is bouncing again but we don't have much time left for the June options that expire after Friday. We are adjusting our exit on the June strangle to breakeven at $0.56. You may want to adjust your exit lower. We are not suggesting new positions at this time. We have suggested a July strangle and a more aggressive June strangle. The options in the July strangle are the July $45 calls (AMQ-GI) and the July $40 puts (AMQ-SH). Our estimated cost for the July strangle was $1.65. We want to sell if either option hits $3.50. The options in the June strangle are the June $45.00 calls (AMQ-FI) and the June $40.00 puts (AMQ-RH). Our estimated cost on the June strangle was $0.56.

Suggested Options:
We are not suggesting new strangles in AMGN.

Picked on May 22 at $ 42.77
Change since picked: + 1.20
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 6.7 million

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McDonald's - MCD - close: 59.95 chg: +0.61 stop: n/a

It's not looking good for this MCD strangle. The June options only have five days left. We are adjusting our exit to breakeven at $1.10. We are not suggesting new positions. The options we suggested were the June $62.50 calls (MCD-FZ) and the June $57.50 puts (MCD-RY). Our estimated cost was $1.10.

Suggested Options:
We are not suggesting new positions at this time.

Picked on May 18 at $ 60.53
Change since picked: - 0.58
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 7.5 million

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Tyco Intl. - TYC - close: 43.33 change: +0.02 stop: n/a

TYC has been consolidating sideways the last few days near its 100-dma. At this point I would expect a bounce back up into the $44.50-45.00 zone. We are not suggesting new strangle positions in TYC at this time. The options we suggested were the July $47.50 calls (TYC-GW) and the July $42.50 puts (TYC-SV). Our estimated cost was $1.30. We want to sell if either option hits $1.95 (50% gain).

Suggested Options:
We are not suggesting new strangles in TYC at this time.

Picked on June 03 at $ 44.89
Change since picked: - 1.57
Earnings Date 08/05/08 (unconfirmed)
Average Daily Volume = 2.9 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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