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Call Updates

Arch Coal - ACI - close: 56.59 chg: +4.22 stop: 48.99

Coal stocks surged on Thursday thanks to UBS upgrading multiple stocks in the group. ACI was one of the stocks upgraded and shares ended the session up more than 8%. Volume was strong on today's rally, which is bullish. ACI hit an intraday high of $57.45, almost enough to hit our target. We're not suggesting new bullish positions at this time. We are adjusting the stop loss to $51.00. Our target is the $58.00-60.00 zone. The P&F chart is bullish with a $68 target.

Picked on August 20 at $ 52.37
Change since picked: + 4.22
Earnings Date 10/20/08 (unconfirmed)
Average Daily Volume = 6.4 million

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Adobe Systems - ADBE - close: 44.51 chg: +0.23 stop: 43.34*new*

ADBE rebounded about 0.5% on Thursday but shares appear to be forming a short-term $43.50-44.75 trading range. This is the third day in a row that ADBE failed to bounce back above its 10-dma and the $45.00 level. The larger trend is bullish but short-term we remain cautious. We are raising our stop loss to breakeven at $43.34. 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: + 1.17
Earnings Date 09/16/08 (unconfirmed)
Average Daily Volume = 6.5 million

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Chesapeake Energy - CHK - cls: 49.39 chg: +0.77 stop: 45.75*new*

Energy and natural gas stocks continue to rally. CHK added another 1.5% and briefly traded above the $50.00 mark. If CHK does dip we would look for a new entry point in the $47.50-48.25 zone. Please note that we're raising our stop loss to $45.75, which is under the 10-dma near $46. 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: + 1.34
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 20.2 million

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Illumina - ILMN - cls: 92.00 chg: -2.02 stop: 88.45

ILMN under performed the market today. Shares gave up 2.2% with an early morning swoon and spent the rest of the session churning sideways. The stock might be poised for a dip back to the $90 zone. More conservative traders will want to consider a slightly tighter stop loss. Wait for a bounce before considering new bullish positions. 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: + 0.45
Earnings Date 07/27/08 (unconfirmed)
Average Daily Volume = 1.2 million

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Itron Inc. - ITRI - close: 103.43 change: +0.44 stop: 98.45

ITRI posted another gain. We don't see any changes from our previous comments. 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: + 1.93
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 616 thousand

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CBOE Volatility Index - VIX - close: 19.82 chg: -0.60 stop: n/a

It was a mixed day on Wall Street but investors were not fearful and the VIX slid lower. A rebound from current levels or a new move over 22.50 could be used as new (very aggressive) bullish entry point. This is a speculative bet that the market will see another sharp sell-off strong enough to lift the VIX toward 30.00 before October option expiration. 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: - 2.75
Earnings Date 00/00/00
Average Daily Volume = x million
 

Put Updates

Bank of Amer. - BAC - cls: 29.04 change: -0.25 stop: 31.55

Traders bought the morning dip near BAC's 50-dma again but the stock failed to post an actual gain. We remain bearish on the financials. Today's move may prove to be a new entry point for bearish positions. 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: - 2.48
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million

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Chipotle Mex.Grill - CMG - cls: 70.53 chg: +0.47 stop: 73.65

There was little change in shares of CMG today and we don't see any changes from our prior comments. A failed rally in the $72.00-73.00 zone can be a new entry point or readers can buy puts on a new relative low under $69.00. 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: + 0.63
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 888 thousand

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Regional Bank HOLDRs - RKH - cls: 98.00 chg: -1.53 stop: 103.05*new*

There was no follow through on the RKH's bullish candlestick on Wednesday. This is good news for the bears. We would use this as a new entry point to buy puts. We are adjusting our stop loss to $103.05. 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: - 1.80
Earnings Date 00/00/00
Average Daily Volume = 3.1 million

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Uniao de Bancos Brasil - UBB - cls: 119.19 chg: -0.77 stop: 117.75

UBB is still trying to bounce but can't power past resistance near $120 and its simple 10-dma. Aggressive traders may want to buy puts now with a tight stop above $120.00. We are sticking to our original plan and suggested entry point 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: 13.72 chg: -0.01 stop: n/a

LEH is trying to stage a recovery. Today marked the second day in a row that traders bought the dip near $12.50. This afternoon the stock spiked higher on an analyst upgrade to a "buy" yet the rally failed to lift LEH above the $14.00 level. LEH was in the headlines today after a Wall Street Journal article described how the Federal Reserve followed up on a rumor that Credit Suisse was pulling or closing credit lines with LEH. CS told the Fed that the rumors were not true - at least that is how the story goes. There was a lot of talk today about LEH being a takeover candidate since its market cap is down to $9 billion. Some believe that LEH's Neuberger-Berman business is worth $9 billion by itself, which values the rest of LEH at zero. 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: - 3.33
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

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