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Call Updates

Research In Motion - RIMM - cls: 120.15 chg: -2.67 stop: 112.45

RIMM gave back a good chunk of Thursday's gains but shares managed to hold near the $120 region. We would use this dip as another entry point to consider buying calls. However, if you're patient, we might get another dip near the simple 10-dma around $117. Obviously RIMM would show a lot more relative strength if it can rally from here so if we do see a dip near $117 you might want to wait for signs of a bounce first. We're adjusting our stop loss to $114.45, just under the simple 200-dma near $114.70. Our play was initially triggered on the breakout over resistance at $120.00 this past Thursday. There is potential technical resistance at the 50-dma around $126.40 and its late May, early June lows around $127.60. More conservative traders may want to evaluate these two areas and consider an early target. We have two targets. Our first target is $129.00. Our second target is $137.00.

Suggested Options:
We are suggesting the September calls. August calls expire in two weeks.

Picked on July 31 at $120.50 *triggered
Change since picked: - 0.35
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 18.6 million

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SunPower - SPWR - close: 76.42 change: -2.35 stop: 76.45

If you were thinking about buying a dip or a bounce near $75.00 then this is your chance. SPWR bounced around the $75 region on Friday before surging higher into the closing bell. If you do choose an aggressive entry point here we'd use a tight stop under today's low. Officially we're going to stick to our original plan and wait for a breakout higher. Our trigger point to buy calls is at $81.75. A move over the $81.50 region should be a breakout above its trendline of lower highs and also a breakout from what looks like an inverse (bullish version) head-and-shoulders pattern. If triggered our target is the $89.75 mark (or the 200-dma). We are starting the play with a wide stop loss because shares can be so volatile.

Suggested Options:
If triggered at $81.75 we are suggesting the September calls.

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 2.8 million

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United States Nat.Gas - UNG - cls: 43.81 chg: +1.21 stop: 40.99

Oil and natural gas rebounded this morning and traders began buying the dips throughout the session. Friday's bounce looks like another bullish entry point to buy calls. The next hurdle for the bulls is the simple 10-dma near $44.35 and then round-number resistance near $45.00. This remains an aggressive play because we're trying to pick a bottom, even a short-term one, in natural gas. It's been almost instant death to try and pick a bottom for the last three weeks. It is essential that you play with a stop loss and you might want to use a tighter stop. Our target is the $48.40-50.00 zone.

Suggested Options:
We are suggesting the September calls. Strikes are available at $1.00 increments.

Picked on July 30 at $43.39
Change since picked: + 0.42
Earnings Date 00/00/00
Average Daily Volume: 2.9 million
 

Put Updates

Freddie Mac - FRE - close: 7.98 change: -0.19 stop: n/a

Shares of FRE continue to slowly drift lower. The bounce in this stock is definitely over and Thursday's comments from Greenspan didn't help shareholders. Greenspan has been wary of FNM and FRE for years calling them accidents waiting to happen and warned that if these two institutions were to fail it would be a catastrophic event to the financial system. We would consider new put positions at this time. While we are not playing with a stop loss more conservative traders may want to use a stop above $10.00 or above $11.00. Those are pretty wide stops but FRE has been exceptionally volatile this past month. 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. Our short-term target would be a move back to $5.00. More aggressive traders may want to aim lower. We are thinking about moving the target closer to $4.00.

Suggested Options:
We would suggest the September or October puts.

Picked on July 20 at $ 9.18
Change since picked: - 1.20
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: 156.66 chg: -2.29 stop: n/a

AAPL continues to under perform and Friday's session produced a little bearish reversal pattern for a stock that was already in a short-term bearish trend. We only have two weeks left before August options expire. I'm going to repeat our previous comments that more conservative traders may want to make an early exit now. The current trend is lower so we need to see AAPL significantly under $150 if we're going to be profitable. If you don't want to exit early then consider lowering your exit target. 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.

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

Picked on July 20 at $165.15
Change since picked: - 8.49
Earnings Date 07/21/08 (confirmed)
Average Daily Volume = 31.7 million

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Popular Inc. - BPOP - close: 6.95 change: +0.08 stop: n/a

Shares of BPOP, a regional bank, have spent the last couple of sessions trading sideways. Volume has been evaporating, which probably isn't good news for the bulls. We only have two weeks left before August options expire and need to see BPOP well above $7.50 or significantly under $5.00 if we hope to make a profit. More conservative traders may want to consider an early exit now. 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.

Suggested Options:
We are not suggesting new strangles on BPOP.

Picked on July 16 at $ 5.82
Change since picked: + 1.13
Earnings Date 07/18/08 (confirmed)
Average Daily Volume = 3.4 million

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DIAMONDS - DIA - close: 113.12 chg: -0.58 stop: n/a

We've seen some huge swings in the DJIA in July but for the entire month the end result was mostly sideways. Now we only have two weeks left before August options expire. If we're going to make any money on this play the DIA needs to be significantly above $115 or below $109. It's closer to $115 right now but several technical indicators are suggesting a move lower. More conservative traders may want to exit early. 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.

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

Picked on July 07 at $112.21
Change since picked: + 0.91
Earnings Date 00/00/00
Average Daily Volume = 15.5 million

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iShares Brazil - EWZ - cls: 79.08 chg: -2.16 stop: n/a

It has been a very volatile week for the Brazilian markets. The Bovespa index surged more than 3% on Wednesday and Friday just saw a 3% plunge. The Brazilian market was already in a bearish trend so this looks like another failed rally/bearish reversal pattern. The EWZ reacted today with a 2.6% loss and another close under the $80.00 level. We have two weeks left before August options expire. More conservative traders will want to seriously consider an early exit. 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.

Suggested Options:
We are not suggesting new strangles on the EWZ.

Picked on July 03 at $ 83.06
Change since picked: - 3.98
Earnings Date 00/00/00
Average Daily Volume = 13.6 million

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FosterWheeler - FWLT - close: 56.08 chg: -0.69 stop: n/a

It was not a good week for FWLT shareholders. The stock has produced a bearish reversal under the $60.00 level, which leaves it poised for a new leg lower. We are down to our last ten trading days with FWLT before August options expire. More conservative traders may want to exit early or lower their target. 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.

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

Picked on July 15 at $ 61.24
Change since picked: - 5.16
Earnings Date 08/06/08 (confirmed)
Average Daily Volume = 2.5 million

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Corning Inc. - GLW - close: 20.34 chg: +0.33 stop: n/a

GLW has been going nowhere for three weeks and the earnings report did not produce any dramatic moves. This is killing our strangle play. We don't see any changes from our previous comments. We have two weeks left before August options expire. If there was any value left in the options we'd consider an early exit to salvage some capital. At this point more conservative traders may want to exit if either side of this strangle gets back into the $0.65-0.85 range to recoup our cost. We are not suggesting new strangle positions. 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.

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

Picked on July 10 at $ 20.16
Change since picked: + 0.18
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 15.9 million

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Google Inc. - GOOG - close: 467.86 chg: - 5.89 stop: n/a

GOOG is back to its post-earnings lows and the stock actually hit a new three-month low today at $462.50. This lifted the August $480 puts to an intraday high of $23.80. The trend in GOOG definitely appears to be down. However, if you think the market (or GOOG) is ready to bounce then you should strongly consider an early exit right here, which should allow you to exit at breakeven. We only have two weeks left before August options expire and a bounce would cut deeply into the puts' value. A move close to $453-450 might be enough to lift the $480 put to $30 or more. Right now the put already has an $11 intrinsic value. It's remaining time premium is going to erode pretty quickly in the next two 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.

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

Picked on July 16 at $535.60
Change since picked: -67.74
Earnings Date 07/17/08 (confirmed)
Average Daily Volume = 4.5 million

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Internet Holders - HHH - cls: 49.04 change: -0.16 stop: n/a

The monthly loss on the HHH for July was just over $1.00, which is rather pathetic considering all the volatility the market has seen. If the trend prevails then the HHH should continue lower from here. Unfortunately, I do not expect shares to trade under $45.00 before August options expire. We've already lowered our exit target to breakeven. Readers may want to lower their target to even less in hopes of recouping some capital here. We are not suggesting new positions at this time. 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 $1.50 or higher!

Suggested Options:
We are not suggesting new strangles on the HHH at this time.

Picked on July 03 at $ 50.50
Change since picked: - 1.46
Earnings Date 00/00/00
Average Daily Volume = 132 thousand

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Lehman Brothers - LEH - close: 18.65 chg: +1.31 stop: n/a

News on Friday morning that LEH was considering a sale of $30 billion in mortgage-backed assets helped lift the stock to a 7% gain. Volume remained weak but the stock definitely out performed its peers and the market. 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.

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

Picked on July 27 at $ 17.05
Change since picked: + 1.60
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

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Legg Mason - LM - close: 40.76 chg: +0.41 stop: n/a

The financials and the broker-dealer stocks were the market's best performers on Friday. LM managed a 1% gain and continues to slowly build on its three-week trend of higher lows. We only have two weeks left before August options expire. More conservative traders may want to exit early, which is an idea we've been suggesting since the stock failed to move on LM's earnings report. We are not suggesting new strangles 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.

Suggested Options:
We are not suggesting new strangles on LM.

Picked on July 23 at $ 40.20
Change since picked: + 0.56
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 3.1 million

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MarketVectors Agribusiness- MOO - close: 54.55 chg: -1.45 stop: n/a

The agribusiness and fertilizer stocks just can't decide what direction they want to go. July had both bullish breakouts and bearish breakouts and they all proved to be fake. Given the late week reversal lower I would expect more downside but that's not much better than flipping a coin if you look at last month. We are down to our last ten trading days before August options expire. 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.

Suggested Options:
We are not suggesting new strangles on MOO.

Picked on July 03 at $ 57.25
Change since picked: - 2.70
Earnings Date 00/00/00
Average Daily Volume = 745 thousand

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Netflix - NFLX - close: 29.22 change: -1.67 stop: n/a

NFLX was crushed on Friday morning and the stock gave up more than 5% after a pretty good week following its earnings report. Friday's drop back under $30.00 and its 50-dma is short-term bearish. NFLX might be able to redeem itself with a good bounce from the 200-dma and the $28.00 region. However, we're running out of time with just two weeks left before August options expire. More conservative traders may want to exit early or adjust their exit target. 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.

Suggested Options:
We are not suggesting new strangles on NFLX.

Picked on July 23 at $ 27.98
Change since picked: + 1.24
Earnings Date 07/25/08 (confirmed)
Average Daily Volume = 1.3 million

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PowerShares QQQ - QQQQ - cls: 44.88 chg: -0.58 stop: n/a

The Qs have been a huge disappointment. The NASDAQ-100 ETF, aside from a couple of intraday spikes, has been stuck in a $2.00 trading range for the entire month of July. Now we're down to our last two weeks before August options expire. We are not suggesting new strangles and more conservative traders will want to consider closing this play. 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.

Suggested Options:
We are not suggesting new strangles on the QQQQ.

Picked on July 07 at $ 44.90
Change since picked: - 0.02
Earnings Date 00/00/00
Average Daily Volume = 148 million

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Starbucks - SBUX - close: 14.42 change: -0.27 stop: n/a

Last week's earnings report for SBUX was a dud as far as producing any volatility. The stock saw a spike ahead of earnings but shares have been drifting since the actual report. The overall prevailing trend is still down and I would expect it to continue. Unfortunately, it's going to be a really close call whether or not SBUX will move enough to make this play profitable before the August options expire. It could happen but not at the current pace. More conservative traders may want to adjust their exit price to breakeven. Please note that we are adjusting our exit target to $2.10. We are not suggesting new strangles. 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 $2.10 or more. (FYI: The $14 calls hit $2.10 on the July spike to $16.00.)

Suggested Options:
We are not suggesting new strangles on SBUX.

Picked on July 15 at $ 13.58
Change since picked: + 0.84
Earnings Date 07/30/08 (confirmed)
Average Daily Volume = 14 million

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UBS Ag - UBS - close: 19.39 change: +0.08 stop: n/a

Our strangle play was looking pretty good several days ago when UBS was trading near $23.00. Unfortunately, the rally in the financials has died and UBS has been trading sideways the last few sessions. We're back to where we started from and with just two weeks left that's terrible! More conservative traders may want to consider an early exit now or adjust their exit target to 75% or 100% of breakeven. 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.

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

Picked on July 13 at $19.49
Change since picked: - 0.10
Earnings Date 08/12/08 (unconfirmed)
Average Daily Volume: 7.3 million

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Valero Energy - VLO - close: 32.95 chg: -0.46 stop: n/a

If we exited now we would only be able to recoup about $0.30 but if VLO doesn't start moving real soon that 30 cents is going to evaporate. We were betting on a big move on VLO's earnings report last week and it didn't happen. We immediately suggested an early exit on VLO's failure to move. Now we're down to our last two weeks before August options expire. We are not 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.

Suggested Options:
We are not suggesting new strangles on VLO.

Picked on July 27 at $ 31.88
Change since picked: + 1.07
Earnings Date 07/29/08 (confirmed)
Average Daily Volume = 12.7 million

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Washington Mutual - WM - close: 5.32 chg: -0.01 stop: n/a

The last few weeks have been extremely volatile for WM. Some of the short-term technical indicators are suggesting that WM will roll over again. This last week's high was a lower high and under the trendline of resistance (see chart). We are down to our last two weeks. More conservative traders will want to consider an early exit or adjusting their exit target toward breakeven. We are adjusting our target to $1.45. 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 $1.45 or more.

Suggested Options:
We are not suggesting new strangles on WM.

Picked on July 20 at $ 5.92
Change since picked: - 0.60
Earnings Date 07/22/08 (confirmed)
Average Daily Volume = 57 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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