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Call Updates

Adobe Systems - ADBE - close: 44.28 chg: +0.55 stop: 41.95

The positive earnings report from HPQ helped fuel a bounce in the tech sector. Shares of ADBE added more than 1% but failed to close over its 10-dma or the $45.00 level. Readers might want to buy a bounce from here but if you do consider a much tighter stop loss. 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: + 0.94
Earnings Date 09/16/08 (unconfirmed)
Average Daily Volume = 6.5 million

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Chesapeake Energy - CHK - cls: 48.62 chg: +1.70 stop: 44.65

Oil and energy stocks posted some strong gains on Wednesday. Part of the rally was fueled by a rise in crude oil and part was fueled by a bullish article in the Wall Street Journal suggesting the rally in energy stocks is ready to resume. Shares of CHK popped higher and broke through technical resistance at its 200-dma. One of our triggers to buy calls was at $48.05 so the play is now open. We have two targets. Our first target is $52.00. Our second target is $54.85. FYI: As expected CHK produced a brand new P&F chart buy signal that now points to a $62 target.

Picked on August 20 at $ 48.05 *triggered
Change since picked: + 0.57
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 20.2 million

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Illumina - ILMN - cls: 94.02 chg: +1.45 stop: 88.45

ILMN continues to show some relative strength. The stock looks like it's coiling for a big breakout higher. If you think ILMN can reach our second target at $99.50 then this would still be an entry point to buy calls. 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: + 2.47
Earnings Date 07/27/08 (unconfirmed)
Average Daily Volume = 1.2 million

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Itron Inc. - ITRI - close: 102.99 change: +1.13 stop: 98.45

ITRI bounced following yesterday's test of the $100 level. We remain bullish on the stock. More conservative traders might want to inch their stop loss closer to the $100 level. 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: + 1.49
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 616 thousand

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CBOE Volatility Index - VIX - close: 20.42 chg: -0.86 stop: n/a

Another bounce in the major indices deflated the recent rebound in the VIX. Wait for another rebound from the 20 region or a new rally past 22.50 before considering new bullish call positions. 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: - 2.15
Earnings Date 00/00/00
Average Daily Volume = x million
 

Put Updates

Bank of Amer. - BAC - cls: 29.29 change: +1.21 stop: 31.55

The financial sector and shares of BAC managed a bounce today in spite of 20+ percentage declines in FNM and FRE. The market continues to worry about a government bailout for the two GSEs that would wipeout current shareholders. Watch shares of BAC for a failed rally near $30.00 and its 10-dma as a new entry point to buy puts. 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: - 2.23
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million

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Chipotle Mex.Grill - CMG - cls: 70.06 chg: -1.96 stop: 73.65*new*

CMG continues to under perform the market. The stock lost another 2.7% and briefly dipped under round-number support at the $70.00 level today. CMG did hit our trigger to buy puts at $69.90 so the play is open. We're going to adjust our stop loss to $73.65 so that CMG has a little bit more room to maneuver. Look for a failed rally under $73.00 or a new decline under $69.75 as an entry point to buy puts. We have two targets. Our first target is $65.50. Our second target is $61.00.

Picked on August 20 at $ 69.90 *triggered
Change since picked: + 0.16
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 888 thousand

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Regonal Bank HOLDRs - RKH - cls: 99.53 chg: +2.91 stop: 105.75

Uh-oh! The RKH may have produced a short-term bullish reversal with today's bullish engulfing candlestick pattern. Wait and watch for a failed rally at $100.00 or near the 10-dma around $102.50 before considering new put positions. More conservative traders might want to consider a much tighter stop loss! 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: - 0.27
Earnings Date 00/00/00
Average Daily Volume = 3.1 million

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Uniao de Bancos Brasil - UBB - cls: 119.96 chg: +3.12 stop: 117.75

Brazilian bank UBB delivered a nice bounce today but failed to close over potential resistance at its 10-dma and the $120 level. Volume was very low on today's rebound. We're currently waiting for a bearish breakdown under support near $112.50. However, if UBB provides a clear failed rally pattern in the $124-130 zone we might jump on it as an alternative entry point. Officially our current trigger is at $112.50. If triggered our target is the $102.50-100.00 zone.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 1.5 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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Lehman Brothers - LEH - close: 13.73 chg: +0.66 stop: n/a

LEH managed a 5% bounce on Wednesday after plunging the last couple of sessions. The overall trend remains very bearish so this is probably nothing more than a sharp oversold bounce. 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: - 3.32
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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