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Call Updates

iShares Russ. 2000 - IWM - cls: 69.05 chg: -0.65 stop: 68.90

The lack of a real bounce in the markets on Monday afternoon is a big warning sign for investors. The IWM tried to rally this morning but rolled over and was trading near its lows for the day at the closing bell. This weakness does not bode well for tomorrow and shares hit $68.92 intraday. If there is any weakness tomorrow morning we would expect to be stopped out at $68.90. We still think the smallcap index is short-term oversold and there will be a bounce play here sooner rather than later. This should be a very short-term play and be over in three or four days, maybe sooner. Our target is the $71.60-72.00 zone. Depending on which options you choose you might be able to capture 30 cents to a $1.00 if you're deeper in the money.

Picked on June 29 at $ 69.70
Change since picked: - 0.65
Earnings Date 00/00/00
Average Daily Volume = 74 million

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Murphy Oil - MUR - close: 98.05 chg: +1.76 stop: 89.99

MUR continued to show relative strength on Monday and added another 1.8%. Our preference would be to wait for a dip before opening new bullish plays but we knew that a follow through to Friday's breakout was a big possibility. If you have patience wait for a dip back toward the $96.00-94.00 range. We have two targets. Our first target is $99.95. Our second target is $104.85. The P&F chart is bullish with a $109 target but that could grow. Our stop loss is a little wider than we would prefer so we are labeling this a more aggressive trade.

Picked on June 29 at $ 96.26
Change since picked: + 1.76
Earnings Date 07/23/08 (unconfirmed)
Average Daily Volume = 1.9 million

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Wynn Resorts - WYNN - close: 81.35 chg: +1.54 stop: 77.45

This morning WYNN had its price target cut from $118 to $93 and shares responded with a dip to $77.66 this morning. We were suggesting a trigger to buy calls at $80.75. After the initial downdraft WYNN did bounce as expected and triggered our bullish play. More conservative traders may want to tighten their stop toward today's low. We don't see any other changes from our weekend comments. We have two targets. Our first target is $84.90. Our second target is $89.00.

Picked on June 30 at $ 80.75 *triggered
Change since picked: + 0.60
Earnings Date 08/04/08 (unconfirmed)
Average Daily Volume = 2.0 million
 

Put Updates

None
 

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: 47.16 chg: +0.79 stop: n/a

AMGN is back to hitting new relative highs. We do not see any changes from our weekend comments but we will note that the July $45 calls hit $2.66 today. We have less than three weeks left with the July options. We are not suggesting new positions at this time. 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 $3.00.

FYI: If AMGN rallies to $48.00 and for some reason the July $45 calls do not hit $3.00 we would exit anyway.

Picked on May 22 at $ 42.77
Change since picked: + 4.39
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 6.7 million

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Alpha Nat. Res. - ANR - close: 104.29 chg: +1.46 stop: n/a

You can blame it on window dressing but ANR soared to another new all-time high. The stock gapped open at $104.98 and traded to $108.73 before paring its gains. We still need to see some big moves in ANR if this strangle play is going to become profitable. We're not suggesting new positions at this time. This is a higher-risk strangle play with the options so expensive. The options we suggested were the July $105 calls (ANR-GA) and the July $85 puts (ANR-SQ). Our estimated cost was $9.40. We want to sell if either option hits $14.50.

Picked on June 15 at $ 94.25
Change since picked: +10.04
Earnings Date 08/05/08 (unconfirmed)
Average Daily Volume = 3.7 million

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Garmin Ltd. - GRMN - close: 42.84 chg: -1.28 stop: n/a

This back and forth sideways action is a killer for strangle plays. It's time that more conservative traders need to make a decision about exiting early and just cutting your losses now. We have less than three weeks left for July options. We're going to stick with the play for now. We're not suggesting new positions at this time. The options we listed were the July $50 calls (GQR-GJ) and the July $40 puts (GQR-SH). Our estimated cost was $2.55. We want to sell if either option hits $ 4.75 or higher.

Picked on June 15 at $ 44.91
Change since picked: - 2.07
Earnings Date 07/30/08 (unconfirmed)
Average Daily Volume = 4.1 million

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Holly Corp. - HOC - close: 36.92 chg: -0.20 stop: n/a

HOC managed to bounce near Friday's lows. The stock could be setting up for a larger oversold bounce soon. We're not suggesting new positions at this time. The options we listed were the July $45 calls (HOC-GI) and the July $35 puts (HOC-SG). Our estimated cost was $2.00. We want to sell if either option hits $ 3.00 or higher.

Picked on June 15 at $ 41.25
Change since picked: - 4.33
Earnings Date 08/07/08 (unconfirmed)
Average Daily Volume = 1.1 million

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KLA-Tencor - KLAC - close: 40.71 chg: +1.00 stop: n/a

KLAC rallied more than 2.6% after its Board of Directors approved a 15 million-share buyback program. The company has 150.8 million shares in float. I'm surprised the stock did not move higher than 2.6%. We are not suggesting new positions at this time. We have less than three weeks left, which raises the risk for this play. We listed two different strangles on KLAC.

Suggested Options:
KLAC Strangle #1) The options we listed were the July $42.50 calls (KCQ-GV) and the July $37.50 puts (KCQ-SU). Our estimated cost is $1.65 We want to sell if either option hits $3.00.

KLAC Strangle #2) The options we listed were the July $45.00 calls (KCQ-GI) and the July $35.00 puts (KCQ-SG). Our estimated cost is $0.70. We want to sell if either option hits $1.50.

Picked on June 22 at $ 40.07
Change since picked: + 0.64
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 3.7 million

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Nucor - NUE - close: 74.67 change: -0.21 stop: n/a

Positive analyst comments about the future price of steel gave the group a rally this morning. Unfortunately for NUE the rally failed and NUE remains poised for a move lower. We are not suggesting new positions at this time. The options we listed were the July $85 calls (NUE-GQ) and the July $70 puts (NUE-SN). Our estimated cost is $2.50. We want to sell if either option hits $3.50.

Picked on June 25 at $ 77.18
Change since picked: - 2.51
Earnings Date 07/17/08 (unconfirmed)
Average Daily Volume = 6.6 million

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United States Oil - USO - cls: 113.66 chg: -0.09 stop: n/a

Crude oil rallied to another new record this morning and yet the USO did not follow suit. Suddenly there is a disconnect between crude futures and this oil etf. We are not suggesting new positions at this time. We suggested two different strangles. The strangle with the wider strikes costs less but has higher risk.

USO Strangle #1) The options we listed were the July $115 calls (IYS-GK) and the July $105 puts (IYS-SA). Our estimated cost is $7.10 We want to sell if either option hits $9.75.

USO Strangle #2) The options we listed were the July $120 calls (QSO-GP) and the July $100 puts (IYS-SV). Our estimated cost is $4.10. We want to sell if either option hits $6.50.

Picked on June 22 at $109.14
Change since picked: + 4.52
Earnings Date 00/00/00
Average Daily Volume = 12.5 million

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Valero - VLO - close: 41.18 change: +1.22 stop: n/a

The pull back in crude oil powered a rebound in VLO. The stock added 3% today after hitting multi-year lows on Friday. We're not suggesting new positions. The options we suggested were the July $50 calls (VLO-GJ) and the July $40 puts (VLO-SH). Our estimated cost is $1.89. We want to sell if either option hits $2.75 or higher.

Picked on June 15 at $ 44.84
Change since picked: - 3.66
Earnings Date 07/29/08 (unconfirmed)
Average Daily Volume = 10.8 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

Fording Cand. Coal - FDG - close: 95.61 chg: +1.86 stop: n/a

Target achieved! Another day, another gain for FDG. Again, it could be window dressing by fund managers, but FDG broke through its recent trading range to hit another record high. The July $90 calls (FDG-GR) hit an intraday high of $8.02. Our target to exit was $8.00. The play is closed for us but more aggressive traders may want to keep their position open. There is just under three weeks left for July options. However, keep in mind that if this was window dressing then tomorrow there could be some undressing. The options we suggested were the July $90 calls (FDG-GR) and the July $75 puts (FDG-SO). Our estimated cost was $5.45. We want to sell if either option hits $ 8.00 or higher. More aggressive traders may want to aim higher.

Picked on June 15 at $ 82.91
Change since picked: +12.70
Earnings Date 07/23/08 (confirmed - amc)
Average Daily Volume = 1.7 million
 

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