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Call Updates

Arch Coal - ACI - close: 53.88 chg: -1.73 stop: 49.95

Coal stocks were hit hard today as traders sought to lock in gains from last week as the broader market posted a steep decline. ACI slipped to its exponential 200-dma before bouncing. Volume was very light. Today's session also produced a bearish engulfing candlestick pattern. We are not suggesting new bullish positions. 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: + 1.51
Earnings Date 10/20/08 (unconfirmed)
Average Daily Volume = 6.4 million

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Adobe Systems - ADBE - close: 43.67 chg: -1.24 stop: 43.34

ADBE was unable to avoid the market-wide sell-off. Shares lost 2.7% and dipped to short-term support near $43.50. Today's move only reinforces what looks like a failed rally near $45.00 and its 10-dma last week. We would seriously consider an early exit right here! However, our stop loss is already at $43.34 (breakeven on the stock) and ADBE did manage to hold the $43.50 mark. Readers should expect ADBE to hit our stop loss if the NASDAQ continues lower tomorrow. We are not suggesting new bullish positions in this stock. 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: + 0.33
Earnings Date 09/16/08 (unconfirmed)
Average Daily Volume = 6.5 million

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Chesapeake Energy - CHK - cls: 48.00 chg: +0.35 stop: 46.45

Natural gas stock CHK spent Monday's session churning sideways and actually closed higher. We would wait for a new move over $49.00 before considering new bullish positions. More conservative traders might want to tighten their stops toward today's low (47.11). 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: - 0.05
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 20.2 million

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Itron Inc. - ITRI - close: 103.24 change: -1.55 stop: 99.90

Readers shouldn't be surprised to see profit taking ITRI. We warned investors over the weekend that the stock had stalled just under resistance. The trend of higher lows is still in place but momentum is waning a bit. We're not suggesting new positions at this time. 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: + 1.74
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 616 thousand

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Research In Motion - RIMM - cls: 127.03 chg: -4.42 stop: 124.65

Our bullish play in RIMM is not looking healthy here. Shares were hammered for a 3% loss and the stock fell back toward its 100-dma. Several days ago we had closed our previous RIMM play when it looked like shares were poised to break support near $125.00. Now it looks like RIMM is set to retest the $125 mark. We would consider buying a bounce near $125.00 but keep in mind the short-term technicals are starting to roll over into bearish signals and last week's high could be considered the second peak in a double-top pattern. We have two targets. Our first target is $143.50. Our second target is the $155.00-160.00 zone. However, readers should expect RIMM to encounter some resistance in the $145-150 area.

Picked on August 21 at $132.30
Change since picked: - 5.27
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 19.1 million

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CBOE Volatility Index - VIX - close: 20.97 chg: +2.16 stop: n/a

Today's sell-off may have really gotten traders attentions - at least those traders still here and not on summer vacation. The VIX rallied more than 11% but the trend of lower highs has not yet been broken. We have been suggesting that readers wait for a new rally over 22.50 to buy calls again. We're betting that the market will see another sharp sell-off and investor fear will rise enough to push the VIX toward 30.00 and all before the 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: - 1.60
Earnings Date 00/00/00
Average Daily Volume = x million
 

Put Updates

Bank of Amer. - BAC - cls: 28.96 change: -1.25 stop: 31.55

Financials were a real weak spot in the market today. Shares of BAC gave back all of Friday's rally. There is still potential support at the 50-dma but today's move looks like a new entry point for bearish positions. We have two targets. Our first target was $28.00, which has already been achieved. Our second target is $25.50.

Picked on August 07 at $ 31.52 /1st target exceeded
Change since picked: - 2.56
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million

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Chipotle Mex.Grill - CMG - cls: 70.13 chg: -1.87 stop: 73.65

CMG lost about 2.6% on Monday and almost closed under the $70.00 level. Over the weekend we suggested a move under $71.00 or $69.00 as a new entry point and that still holds true. The MACD on the daily chart is very close to a new sell signal. 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: + 0.23
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 888 thousand

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Millicom Intl. - MICC - cls: 79.69 chg: -2.20 stop: 80.75

More aggressive traders will want to consider buying puts on MICC following today's 2.6% drop and close under $80.00. We are going to stick to our original plan and use a trigger at $78.49. If triggered we're listing two targets. Target number one is $75.05. Target number two is $72.50.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/23/08 (unconfirmed)
Average Daily Volume = 1.0 million

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Regional Bank HOLDRs - RKH - cls: 97.70 chg: -3.34 stop: 103.05

The RKH regional bank HOLDRs erased Friday's gain with today's 3.3% reversal. The move today looks like another entry point to buy puts. More conservative traders may want to tighten their stops toward the $102 region. 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: - 2.10
Earnings Date 00/00/00
Average Daily Volume = 3.1 million

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Uniao de Bancos Brasil - UBB - cls: 115.14 chg: -3.20 stop: 117.75

Weakness in financials was around the world and Brazilian bank UBB lost 2.7%. We are still waiting for a breakdown under support and we're not ready to give up just yet. Our suggested entry point to buy puts is at $112.50. If triggered our target is the $102.50-100.00 zone. FYI: More nimble traders may want to switch to bullish strategies if UBB can bounce above the $123.00 mark.

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: 13.45 chg: -0.96 stop: n/a

News that the Korean government cautioned Korean banks against making any big acquisitions in "overseas financials" (a.k.a. LEH) sent shares of LEH to a 6.6% loss. We don't see any changes from our previous comments and we're not suggesting new strangle positions. We have four 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: - 3.60
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million
 

Dropped Calls

Illumina - ILMN - cls: 89.97 chg: -1.36 stop: 89.45

Over the weekend we tightened our stop loss on ILMN to $89.45. Midday Monday shares of ILMN had dipped to $89.09 hitting our stop and closing the play. The long-term trend on ILMN Is still bullish. A bounce near $87.00 or a dip (or bounce) near the 100-dma near $83.00 might be a new bullish entry point in ILMN. Buying dips near the 100-dma has been a good entry in the past.

Picked on August 14 at $ 91.55 /stopped out 89.45
Change since picked: - 1.58
Earnings Date 07/27/08 (unconfirmed)
Average Daily Volume = 1.2 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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