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Call Updates

Arch Coal - ACI - close: 55.42 chg: +1.18 stop: 52.37*new*

Coal stocks rallied with some of the commodity stocks on Wednesday. Shares of ACI managed a 2% gain and just barely closed over its 40-dma, which has been resistance the last few sessions. We are going to try and reduce our risk by adjusting the stop loss to breakeven at $52.37 on the stock. Our target is the $58.00-60.00 zone but readers may want to exit at the 50-dma if it falls under $58.00. The P&F chart is bullish with a $68 target.

Picked on August 20 at $ 52.37
Change since picked: + 3.05
Earnings Date 10/20/08 (unconfirmed)
Average Daily Volume = 6.4 million

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Chesapeake Energy - CHK - cls: 50.60 chg: +1.15 stop: 46.90

Another gain for natural gas helped CHK breakout over he $50.00 mark. We have two targets. Our first target is $52.00. Our second target is $54.85. More conservative traders may want to inch up their stop closer to the 10-dma (near 47.50).

Picked on August 20 at $ 48.05 *triggered
Change since picked: + 2.65
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 20.2 million

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Itron Inc. - ITRI - close: 103.45 change: +1.81 stop: 99.90

ITRI recovered on Wednesday with a 1.7% gain. We remain cautious given the bearish tone in the short-term technicals. 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: + 1.95
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 616 thousand

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Research In Motion - RIMM - cls: 128.22 chg: +1.04 stop: 124.65

RIMM tried to bounce but failed to close over the $130 level. We remain cautious, especially now with the daily chart's MACD sporting a new sell signal. We are not suggesting new bullish positions at this time. 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: - 4.08
Earnings Date 09/25/08 (unconfirmed)
Average Daily Volume = 19.1 million

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UltraShort S&P 500 - SDS - cls: 65.44 chg: -1.14 stop: 64.95

The S&P 500 index is trying to bounce but still has a three-week trend of lower highs. Conversely the SDS is pulling back but maintains a three-week trend of higher lows. 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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United States Oil - USO - cls: 95.66 chg: +1.76 stop: 89.79

We were expecting a dip ahead of the weekly oil inventory report and we were definitely expecting a dip on the inventory report's news, which was expected to show a build in supplies. Instead crude oil popped higher this morning thanks to the oncoming hurricane Gustav and the weekly report showed a surprise decline in inventories. Oil still declined after the report and our plan was to buy calls on the USO one hour after the report was announce (more specifically at 11:30 a.m.). The USO began trading at $95.12 at 11:30 a.m. today. We currently have a rather wide stop loss at $89.79. More conservative traders may want to use a stop closer to $92.00 instead. Our short-term target is $99.50.

Picked on August 27 at $ 95.12 *triggered 1 hour after report
Change since picked: + 0.54
Earnings Date 00/00/00
Average Daily Volume = 13.9 million

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CBOE Volatility Index - VIX - close: 19.76 chg: -0.73 stop: n/a

The VIX failed under its trendline of lower highs. We do not 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: - 2.81
Earnings Date 00/00/00
Average Daily Volume = x million

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Whiting Petrol. - WLL - cls: 96.93 chg: +1.13 stop: 89.95

Oil stocks continue to climb and WLL added more than 1% on Wednesday. Volume remains very light ahead of the holiday weekend. We are setting two targets. Our first target is $103.50. Our second target is $107.00. FYI: More conservative traders may want to play with a stop loss at $91.45, under the recent low. Meanwhile the Point & Figure chart is bullish with a $132 target.

Picked on August 26 at $ 95.80
Change since picked: + 1.13
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 1.1 million
 

Put Updates

Bank of Amer. - BAC - cls: 29.65 change: +0.63 stop: 31.05

Banking stocks managed a decent bounce on Wednesday. BAC out performed most of its peers with a 2.1% gain. Shares remain under the $30 level but the intraday chart is starting to look bullish. More conservative traders may want to use a tighter stop near $30.50 instead of ours at $31.05. 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: - 1.87
Earnings Date 10/16/08 (unconfirmed)
Average Daily Volume = 90.4 million

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Chipotle Mex.Grill - CMG - cls: 69.24 chg: -1.13 stop: 73.65

The oversold bounce in CMG appeared to fail near $71.30. This looks like another entry point for bearish positions. The MACD on the daily chart has finally produced 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: - 0.66
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 888 thousand

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iShares Russell 2000 - IWM - cls: 73.03 chg: +0.86 stop: 74.15

The Russell 2000 smallcap ETF, the IWM, rallied to its simple 10-dma overhead and then stalled. More aggressive traders may want to consider new bearish positions on a decline from here with a stop above today's high. We are sticking to our original plan. We're suggesting readers use a trigger to buy puts at $71.45. 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: 79.81 chg: +0.23 stop: 80.75

The consolidation in MICC is narrowing. A breakout one way or the other should be imminent. Considering the two-week slide sideways readers might want to mull over a straddle or strangle on MICC. We are sticking to our plan and suggesting puts with 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: 99.86 chg: +1.60 stop: 103.05

The RKH rebounded from this week's weakness and shares look like they want to trade higher. More conservative traders may want to tighten their stops toward the $102.00 region. We are not suggesting new bearish positions at this time. 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: + 0.06
Earnings Date 00/00/00
Average Daily Volume = 3.1 million

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Uniao de Bancos Brasil - UBB - cls: 118.68 chg: +3.32 stop: 117.75

Brazilian bank UBB looks like it's going to try and bounce again after its recent test of support. 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: 14.78 chg: +0.75 stop: n/a

LEH bounced for a 5% gain on Wednesday but overall nothing has changed. The stock is up 5-to-10% one day and down just as much the next. We're not suggesting new strangle positions. We have less than 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: - 2.27
Earnings Date 09/18/08 (unconfirmed)
Average Daily Volume = 63 million
 

Dropped Calls

None
 

Dropped Puts

None
 

Dropped Strangles

None
 

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