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Call Updates

Burlington Northern - BNI - cls: 96.74 chg: -1.31 stop: 93.90

The stock market soured on Monday and the weakness across the board with the exception of oil does not inspire us to open new bullish positions. The railroad stocks held up better than the broader market but that doesn't mean they won't sink if the S&P continues to slide lower. Today's pull back in BNI to its 10-dma would normally be a new bullish entry point. At this time we would wait for a bounce before considering new call positions. I would expect a dip back toward $96.00 at a minimum. More conservative traders may want to play with a tighter stop loss. It is possible that BNI could fill the gap from July 22nd, which would mean a dip back toward $94.00. There is potential technical resistance at the 50-dma. Our target is the $104.75 mark. FYI: The Point & Figure chart is bullish with a $119 target but there is resistance near $102.

Picked on July 27 at $ 98.05
Change since picked: - 1.31
Earnings Date 07/24/08 (confirmed)
Average Daily Volume = 3.9 million

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Fording Cand. - FDG - close: 82.49 change: +2.14 stop: 78.49

FDG out performed the broader market and most of its peers in the coal sector with a 2.6% gain on Monday. The stock broke through technical resistance at its 50-dma and hit our trigger to buy calls at $81.75. The play is now open. Our target is the $89.50 mark. I would expect some additional resistance near $85.00 on the way up.

Picked on July 28 at $ 81.75 *triggered
Change since picked: + 0.74
Earnings Date 07/23/08 (confirmed)
Average Daily Volume = 2.7 million

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SPDR Gold Shares - GLD - cls: 91.73 chg: +0.04 stop: 89.95

We are surprised that gold didn't perform better today. Stocks were down and the U.S. dollar was down. Yet the GLD only managed a fractional gain. It looks like this gold ETF is still trying to bounce from support near $90 and its rising 50-dma. There appears to be potential resistance near $94.00 but we're aiming for a bounce back to $94.90. More aggressive traders may want to aim higher.

Picked on July 24 at $ 91.33
Change since picked: + 0.40
Earnings Date 00/00/00
Average Daily Volume = 12 million

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Intl. Bus. Mach. - IBM - cls: 126.25 chg: -2.28 stop: 124.95

IBM was not immune to the selling on Monday. The stock lost more than 1.7% and broke down under its 10-dma. This is short-term bearish and we would expect a dip toward what should be better support around $125.00 and its 50-dma. Wait for signs of a bounce before considering new positions. You could argue that our stop loss at $124.95 is a bit too tight, especially if we're expecting a dip and bounce near $125. More aggressive traders may want to widen their stop. We have two targets. Our first target is $134.75. Our second target is $139.00. We are now suggesting the August or September calls.

Picked on July 23 at $130.25 *triggered
Change since picked: - 4.00
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 7.7 million

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United States Oil - USO - cls: 100.54 chg: +1.27 stop: 97.45

Oil is finally starting to see an oversold bounce from support. The USO is bouncing from round-number support near $100 and its rising 100-dma. We see today's rebound as another entry point to buy calls. Our target is the $106.75 mark. The 50-dma near $108 looks like overhead resistance. More aggressive traders may want to aim higher. Ultimately our ultra-long term bias for oil is much, much higher but that doesn't mean the commodity won't see corrections, seasonal swings, and some sector rotation.

Picked on July 24 at $101.46
Change since picked: - 0.92
Earnings Date 00/00/00
Average Daily Volume = 14.6 million
 

Put Updates

Alliant Tech.- ATK - close: 98.60 chg: -0.73 stop: 101.75

ATK produced another mini failed rally today and still looks poised to drop toward the bottom of its channel. This looks like another entry point for puts. We are aiming for $95.25. More aggressive traders could aim lower. The Point & Figure chart is bearish with a $78 target. We do not want to hold over the August 8th earnings report. This could be considered a higher-risk more aggressive play because the spreads on the options are a little too wide!

Picked on July 27 at $ 99.33
Change since picked: - 0.73
Earnings Date 08/07/08 (confirmed)
Average Daily Volume = 307 thousand

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Freddie Mac - FRE - close: 7.72 change: -0.55 stop: n/a

Concerns over financials continue to spook the markets. FRE lost another 6.6%. We don't see any changes from our weekend comments. Our time frame is several weeks although at this rate FRE could hit our target pretty soon. You will want to consider the September or October puts. We consider this a lottery-ticket style of play. The put option is our ticket. If we win, we should win big. If we lose, we lose it all. Thus we're not playing with a stop loss. More conservative traders may want to play with a stop anyway. Our short-term target would be a move back to $5.00. More aggressive traders may want to aim lower. FYI: FRE will be presenting at a conference on July 28th.

Picked on July 20 at $ 9.18
Change since picked: - 1.46
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 45.5 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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Apple Inc. - AAPL - close: 154.40 chg: -7.72 stop: n/a

I was determined to add AAPL as another put play over the weekend but the volatility made picking a decent stop loss too risky. Now I'm wishing we added AAPL anyway. This strangle play isn't using a stop loss and we're happy to see AAPL moving again. The stock lost 4.7% and closed on its lows for the session. We are not suggesting new strangle positions. The options we suggested were the August $180 calls (APV-HP) and the August $150 puts (APV-TJ). Our estimated cost is $8.90. We want to sell if either option hits $14.50 or more.

Picked on July 20 at $165.15
Change since picked: -10.75
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 6.34 change: -0.33 stop: n/a

BPOP, a banking stock, followed financials lower. Shares gave up almost 5% albeit on low volume. We are not suggesting new strangle plays on BPOP. The options we listed were the August $7.50 calls (BQW-HU) and the August $5.00 puts (BQW-TA). Our estimated cost was $0.65. We want to sell if either option hits $1.45 or more.

Picked on July 16 at $ 5.82
Change since picked: + 0.52
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 111.34 chg: -1.83 stop: n/a

The DIA sank another 1.5% on Monday. We don't see any changes from our previous comments. We still need to see some big moves before the play is profitable. More conservative traders may want to exit early now. We are not suggesting new strangles on the DIA. The options we suggested were the August $115 calls (DIA-HK) and the August $109 puts (DIA-TE). Our estimated cost is $4.35. We want to sell if either option hits $6.90 or more.

Picked on July 07 at $112.21
Change since picked: - 0.87
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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iShares Brazil - EWZ - cls: 77.14 chg: -0.26 stop: n/a

The bounce in the EWZ this morning failed, which should set up for another leg lower soon. We're not suggesting new positions at this time. The options we suggested back in early July were the August $90 calls (EWZ-HR) and the August $75 puts (EWQ-TO). Our estimated cost is $3.95. We want to sell if either option hits $5.90.

Picked on July 03 at $ 83.06
Change since picked: - 5.92
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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FosterWheeler - FWLT - close: 55.17 chg: -0.55 stop: n/a

FWLT bounced up to its simple 10-dma and rolled over. Today's failed rally suggests a continuation of the bearish trend. We are not suggesting new strangle positions in FWLT at this time. The options we suggested were the August $70 calls (UFB-HN) and the August $50 puts (UFB-TJ). Our estimated cost was $2.60. We want to sell if either option hits $4.00.

Picked on July 15 at $ 61.24
Change since picked: - 6.07
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 20.80 chg: +0.30 stop: n/a

Thanks to some positive analyst comments over the weekend GLW gapped higher this morning but pared its gains after trading near $21.00. If you want to open positions ahead of earnings tomorrow is your last day. You may want to pick a different set of options unless GLW pulls back toward $20 tomorrow. The options we suggested were the August $22.50 calls (GLW-HX) and the August $17.50 puts (GLW-TW). Our estimated cost is $0.75. We want to sell if either option hits $1.50. Try and keep your investment balanced on both sides of the trade.

Picked on July 10 at $ 20.16
Change since picked: + 0.64
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 477.12 chg: -14.86 stop: n/a

The longer GOOG struggles with resistance near $500 the stronger odds become that the next move is going to be lower. We're going to repeat our previous comments about the lack of follow through on the post-earnings sell-off. More conservative traders may want to consider an early exit now to salvage capital since August options expire in three weeks. We're not suggesting new strangle positions in GOOG at this time. The options we listed were the August $590 calls (GOO-HR) and the August $480 puts (GOP-TI). Our estimated cost was $19.10. We want to sell if either option hits $30.00 or more.

Picked on July 16 at $535.60
Change since picked: -58.48
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 48.69 change: -1.53 stop: n/a

The HHH lost 3% today thanks to weakness in AMZN, YHOO and especially ETFC. Only aggressive traders should consider new positions at this time since we have less than three weeks left. The options we suggested were the August $55 calls (HHH-HK) and the August $45 puts (HHH-TI). Our estimated cost is $1.65. We want to sell if either option hits $2.45.

Picked on July 03 at $ 50.50
Change since picked: - 1.81
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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Lehman Brothers - LEH - close: 15.27 chg: -1.78 stop: n/a

I am probably going to wish we had just added LEH ad a directional put play but we should still do well with this strangle strategy. The stock moved more than 10% on Monday so we're not suggesting new positions at this time. The options we suggested were the September $24.00 calls (LYH-IR) and the September $10.00 puts (LYH-UB). Our estimated cost is $2.15. We want to sell if either option hits $3.50 or higher.

Picked on July 27 at $ 17.05
Change since picked: - 1.78
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

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Legg Mason - LM - close: 35.55 chg: -3.96 stop: n/a

LM also gave up more than 10% today. Today's move looks like another failed rally near $40.00. We're not suggesting new strangle positions at this time. The options we listed were the August $45 calls (LM-HW) and the August $35 puts (LM-TG). Our estimated cost was $3.15. We want to sell if either option hits $4.85 or more.

Picked on July 23 at $ 40.20
Change since picked: - 4.65
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 3.1 million

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MarketVectors Agribusiness- MOO - close: 55.00 chg: -0.26 stop: n/a

The early morning bounce in MOO faded and the intermediate trend remains bearish. We're not suggesting new positions at this time. The options we suggested were the August $62 calls (MYV-HJ) and the August $50 puts (MOO-TX). Our estimated cost is $2.10. We want to sell if either option hits $3.15.

Picked on July 03 at $ 57.25
Change since picked: - 2.25
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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Netflix - NFLX - close: 28.63 change: +0.78 stop: n/a

Positive analyst comments helped push NLFX to a 2.8% gain on Monday. The stock came close to breaking out over its simple 200-dma. We're not suggesting new strangles at this time. The options we suggested were the August $32.50 calls (QNQ-HT) and the August $22.50 puts (QNQ-TX). Our estimated cost is $1.20. We want to sell if either option hits $2.20 or more.

Picked on July 23 at $ 27.98
Change since picked: + 0.65
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 1.3 million

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PowerShares QQQ - QQQQ - cls: 44.42 chg: -0.85 stop: n/a

The Qs continue to churn sideways. We do not see any changes from our weekend comments. We're definitely not suggesting new positions and traders will want to consider an early exit now to cut their losses. We only have three weeks left before August options expire. The options we suggested were the August $47 calls (QQQ-HU) and the August $43 puts (QQQ-TQ). Our estimated cost is $1.80. We want to sell if either option hits $2.75 or more.

Picked on July 07 at $ 44.90
Change since picked: - 0.48
Earnings Date 00/00/00
Average Daily Volume = 148 million

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Starbucks - SBUX - close: 14.23 change: -0.19 stop: n/a

We would not expect shares of SBUX to move much ahead of its July 30th earnings report. SBUX has many options at $1.00 increments in the teens, readers could open new strangles at any time but we would wait until Wednesday, just before the earnings report, to do so. The options we suggested for the strangle were the August $14.00 calls (SQX-HK) and the August $13.00 puts (SQX-TJ). Our estimated cost was $1.38. We want to sell if either option hits $3.50 or more.

Picked on July 15 at $ 13.58
Change since picked: + 0.65
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million

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UBS Ag - UBS - close: 19.15 change: -1.61 stop: n/a

UBS got hammered on Monday as investors fled the financials again. Shares of UBS lost 7% and closed under round-number support at $20.00. We're not suggesting new positions at this time. We listed two different strangles.

UBS Strangle #1) This uses the August $22.50 calls (UBS-HX) and $17.50 puts (UBS-TW). Our estimated cost was $1.90. We want to sell if either option hits $3.00.

UBS Strangle #2) This uses the August $25.00 calls (UBS-HE) and $15.00 puts (UBS-TC). Our estimated cost was $0.90. We want to sell if either option hits $1.90.

Picked on July 13 at $19.49
Change since picked: - 0.34
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Washington Mutual - WM - close: 3.95 chg: +0.11 stop: n/a

WM delivered an oversold bounce on Monday amidst a widespread and very strong sell-off in the financial sector. We suspect that WM will find support again, at least temporarily near its $3.00 low. A lot of investors would be tempted to buy WM at $3.00 as a speculative "it can't get much worse" kind of trade. At $3.00 a lot of traders see this as a long-term call option that doesn't expire with unlimited upside. That doesn't mean that WM can't go to $2.00 or $1.00 but expect some sort of bounce at $3.00. We are not suggesting new positions at this time. The options we suggested were the August $8.00 calls (WM-HV) and the August $4.00 puts (WM-TH). Our estimated cost is $0.72. We want to sell if either option hits $1.95 or more.

Picked on July 20 at $ 5.92
Change since picked: - 1.97
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million

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Valero Energy - VLO - close: 31.81 chg: -0.07 stop: n/a

It was not surprising to see VLO trade sideways ahead of its earnings report tomorrow. We are no longer suggesting new strangle positions. The options we suggested were the August $37.50 calls (VLO-HU) and the August $27.50 puts (VLO-TS). Our estimated cost is $1.38. We want to sell if either option hits $2.25 or higher.

Picked on July 27 at $ 31.88
Change since picked: - 0.07
Earnings Date 07/29/08 (confirmed)
Average Daily Volume = 12.7 million
 

Dropped Calls

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Dropped Puts

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Dropped Strangles

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