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Call Updates

Arch Coal - ACI - close: 54.33 chg: +0.45 stop: 49.95

Coal stock ACI continued to trade sideways. The market couldn't make up its mind on what direction to go and ACI just bounced around. We remain cautious and more conservative traders may want to raise their stops toward $52.00 or $52.50. 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: + 1.96
Earnings Date 10/20/08 (unconfirmed)
Average Daily Volume = 6.4 million

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Chesapeake Energy - CHK - cls: 49.45 chg: +1.45 stop: 46.90*new*

Natural gas futures soared higher today and that lifted shares of CHK. The stock hit $50.24 intraday but failed to close over round-number resistance at $50.00. We are adjusting our stop loss to $46.90, which is under Monday's low of $47.11 and CHK's 10-dma. If you're looking for another entry point wait for a dip back toward $48.25-48.00. 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: + 1.40
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 20.2 million

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Itron Inc. - ITRI - close: 101.64 change: -1.60 stop: 99.90

Our unrealized gains in ITRI are quickly vanishing. We've been warning readers that momentum has been fading and a dip back toward $100 is not that unexpected. Given the current circumstances we are not suggesting new bullish entries 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: + 0.14
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 616 thousand

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Research In Motion - RIMM - cls: 127.18 chg: +0.15 stop: 124.65

As expected shares of RIMM dipped back toward support near $125.00. Fortunately, the stock managed a late day bounce. The bad news is that the technical indicators, which were already struggling, have turned more bearish. The daily chart's MACD is near a new sell signal. A bounce from here could be used as a new entry point but I'd probably wait for a new move over $130 before initiating new positions. Or you could try timing a jump on another dip near $125. Overall this is not a great environment to be launching new bullish plays. 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: - 5.12
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 19.1 million

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UltraShort S&P 500 - SDS - cls: 66.58 chg: -0.44 stop: 64.95

The SDS "rallied" to $67.45 intraday before trimming its gains. We don't see any changes from our previous comments. We want to see the SDS clear last week's highs. We're suggesting a trigger to buy calls at 68.01. If triggered our target is the $73.50-75.00 range. We would consider this a slightly more aggressive play since the SDS is going to be twice as volatile as the S&P 500. For every 1% the S&P goes down, the SDS will go up 2%.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 25 million

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CBOE Volatility Index - VIX - close: 20.49 chg: -0.48 stop: n/a

The VIX failed to breakout over its trendline of lower highs. We don't see any changes from our prior comments. 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: - 2.08
Earnings Date 00/00/00
Average Daily Volume = x million
 

Put Updates

Bank of Amer. - BAC - cls: 29.02 change: +0.06 stop: 31.05 *new*

BAC managed a minor bounce following yesterday's reversal lower. The overall trend remains bearish although short-term technicals are a mixed bag. You could argue that the MACD on the daily chart is potentially building for a turn higher. We are inching our stop loss down to $31.05. More conservative traders may want to use a tighter stop near $30.50 instead. 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: - 2.50
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million

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Chipotle Mex.Grill - CMG - cls: 70.37 chg: +0.24 stop: 73.65

Darden Restaurants (DRI) issued an earnings warning this morning and that weighed on all the restaurant stocks. Shares of CMG spiked to $66.40 this morning before fighting its way back into the green. Look for this bounce to roll over in the $71-72 zone before considering new put positions. 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: + 0.47
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 888 thousand

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iShares Russell 2000 - IWM - cls: 72.17 chg: +0.11 stop: 74.15

Wow! It was a close call today. The markets didn't do much and the major averages bounced around. The IWM dipped to $71.46 this afternoon before recovering. Our suggested trigger to buy puts was at $71.45. Technically we're still sitting on the sidelines. We're going to stick to our entry point but more nimble traders may want to try and enter on a failed rally under the 10-dma near $73.50. If you prefer to see more momentum to the downside then wait for a drop under the 50-dma (near 70.85) or wait for a drop under $70.00. Our target is the $66.50 level.

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 110 million

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Millicom Intl. - MICC - cls: 79.58 chg: -0.11 stop: 80.75

We don't see any changes from our previous comments. MICC still acts like its path of least resistance is down. Traders did buy the dip near its 20-dma midday. 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: 98.29 chg: +0.59 stop: 103.05

Banking stocks staged a rebound late in the session and the RKH managed to close in the green. We don't see any changes from our previous comments. 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: - 1.51
Earnings Date 00/00/00
Average Daily Volume = 3.1 million

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Uniao de Bancos Brasil - UBB - cls: 115.36 chg: +0.22 stop: 117.75

UBB is back to testing major support in the $113-115 zone. Traders bought the dip again. Aggressive traders could try buying calls on a bounce over $116 with a tight stop loss and try to scalp a few points. We're waiting for a breakdown under support given the ongoing concerns in the financial sector. 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: 14.03 chg: +0.58 stop: n/a

Here's an idea. No one seems to be willing to step up to the plate and invest in or buy LEH these days. So now LEH is thinking about creating a new, separate company, with the help of some un-named outside investors. The sole purpose of this company is to buy some of LEH's mortgage-backed assets that everyone is so worried over. Who is going to buy this stuff unless it's 25 cents on the dollar? You have to wonder if they're talking to real investors or just thinking, "what if?"

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: - 3.02
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million
 

Dropped Calls

Adobe Systems - ADBE - close: 43.36 chg: -0.31 stop: 43.34

ADBE continued to drift lower following Monday's failed rally under its 10-dma. Tuesday saw shares hit our stop loss at $43.34 and close the play. Short-term technicals have turned negative and we would look for a dip toward the 50-dma or 100-dma.

Picked on August 05 at $ 43.34 /stopped out 43.34
Change since picked: + 0.02
Earnings Date 09/16/08 (unconfirmed)
Average Daily Volume = 6.5 million
 

Dropped Puts

None
 

Dropped Strangles

None
 

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