Option Investor
Play Updates

In Play Updates and Reviews

Printer friendly version

Call Updates

Adobe Systems - ADBE - close: 43.73 chg: -0.37 stop: 41.95*new*

ADBE lost another 0.8% and posted its fourth loss in a row. Shares have now hit the 50% retracement of its early August rally and the stock was bouncing in the last few minutes of the session. Short-term technicals have turned bearish. I would wait for a dip closer to $43.00 or even $42.50 before considering new bullish positions. We're raising the stop loss to $41.95. Our target is the $47.50-50.00 zone. The Point & Figure chart is bullish with a $71 target.

Picked on August 05 at $ 43.34
Change since picked: + 0.39
Earnings Date 09/16/08 (unconfirmed)
Average Daily Volume = 6.5 million


Illumina - ILMN - cls: 92.57 chg: -0.11 stop: 88.45

ILMN delivered another volatile morning with a sharp dip to $90.34 followed by a spike to $93.93. The stock spent most of the day churning sideways around the $92.00 level. Overall ILMN continues to perform better than the broader market. We would still consider new bullish positions but if you're patient ILMN might see another dip toward $90.50-91.00 again, which can be used as a bullish entry point. More conservative traders may want to inch up their stop loss closer to $90.00. We have two targets. Our first target is $95.25. Our second target is $99.50. FYI: ILMN has a 2-for-1 stock split scheduled for September 23rd. Traders might also want to note that ILMN's short interest is about 19% of the 50 million-share float. That's high enough to spark some short squeezes.

Picked on August 14 at $ 91.55
Change since picked: + 1.02
Earnings Date 07/27/08 (unconfirmed)
Average Daily Volume = 1.2 million


Itron Inc. - ITRI - close: 101.86 change: -0.37 stop: 98.45

Most of your quote services are going to say that ITRI's intraday low was $98.43. That was a bad tick. A quick glance at the intraday chart shows that ITRI never traded under $100 today. We're keeping the stock on the newsletter. Yesterday we suggested that readers look for a dip in the $101-100 zone as an entry point and we got that dip today. Given the weakness in the market readers may want to wait for a bounce from here before considering new call positions. We've set two targets. Our first target is $105.75. Our second target is $109.90.

Picked on August 14 at $ 101.50
Change since picked: + 0.36
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 616 thousand


CBOE Volatility Index - VIX - close: 21.28 chg: +0.30 stop: n/a

It looks like the VIX is inching closer to a bullish breakout above the trend of lower highs. We don't see any changes from our previous comments. Readers could choose to buy calls now or wait for a move over 22.50. This is a speculative bet that the market will see another sharp sell-off strong enough to lift the VIX toward 30.00. Our target is 29.75 but readers might want to consider scaling out of positions in the 28-29 region.

Picked on August 03 at $ 22.57
Change since picked: - 1.29
Earnings Date 00/00/00
Average Daily Volume = x million

Put Updates

Bank of Amer. - BAC - cls: 28.08 change: -1.22 stop: 31.55*new*

Target exceeded! BAC dipped to $27.75 today. Our first target was $28.00. Financials led the market lower on Tuesday. Shares of BAC gave up more than 4% and dipped to its simple 50-dma near $28.00. We don't see any changes from our previous comments but we are adjusting the stop loss down to $31.55. We have two targets. Our first target was $28.00. Our second target is $25.50.

Picked on August 07 at $ 31.52 /1st target exceeded
Change since picked: - 3.44
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million


Regonal Bank HOLDRs - RKH - cls: 96.62 chg: -3.18 stop: 105.75

The RKH is off to a strong start with a 3% decline and a close under potential technical support at the 50-dma. We do not see any changes from our previous comments. We have two targets. Our first target is $91.00. Plan to exit all or most of your position there. We'll set an aggressive, secondary target at $86.00. FYI: The top three holdings in the RKH are JPM (19%), WFC (13.6%) and WB (10%).

Picked on August 18 at $ 99.80
Change since picked: - 3.18
Earnings Date 00/00/00
Average Daily Volume = 3.1 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.)


Lehman Brothers - LEH - close: 13.07 chg: -1.96 stop: n/a

There is growing concern about LEH's potential losses and the stock lost another 13% today. The MACD on its daily chart did produce a new sell signal. Shares are nearing the July lows near $12. The September $10 put hit $1.12 intraday. We are not suggesting new strangle positions at this time. We have a few weeks left before September options expire and need to see LEH significantly above $24.00 or under $10.00. 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: - 3.98
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million

Dropped Calls

Research In Motion - RIMM - cls: 125.95 chg: -1.06 stop: 124.45

Trading in RIMM is starting to worry us. The stock briefly dipped under support near $125.00 today and shares have developed a short-term trend of lower highs. The current consolidation has a bearish wedge shape to it. We would rather exit early right now than see RIMM hit our stop loss at $124.45. The stock had exceeded our early target at $129.00 when shares traded to $135 in mid-August. Keep an eye on RIMM as a dip to its 200-dma might be another bullish entry point.

Picked on July 31 at $120.50 /1st target exceeded
Change since picked: + 5.45
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 18.6 million

Dropped Puts


Dropped Strangles


Play Update Archives