Option Investor
Play Updates

Three Targets Hit

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Play Editor's Note: It's almost Thanksgiving here in the U.S. and the market finally put together its first two-day rally for the month of November. Market historians are calling it the best two-day rally for the DJIA since 1987. In spite of the big gain we are only back to last Tuesday's levels. We are not adding new bullish positions after such a big move and will wait to see if there is any profit taking and where the market bounces.


CALL Play Updates

Axsys Tech. - AXYS - close: 65.05 change: +3.22 stop: 59.45*new*

The two-day rally in AXYS extended to three days with a 5.2% gain on Monday. Shares broke out past their 100-dma and hit an intraday high of $66.97. Volume was pretty strong at 545 thousand shares. We don't see any changes from our previous comments except for a stop loss adjustment to $59.45. If you're looking for a new entry point wait for a dip. Our exit target is $69.50.

Picked on November 22 at $ 61.83
Change since picked:      + 3.22
Earnings Date           02/19/09 (unconfirmed)
Average Daily Volume =       195 thousand 


Ball Corp. - BLL - close: 32.47 change: +2.29 stop: 29.75*new*

Monday proved to be a strong day for BLL. The stock actually gapped open higher at $30.73 and then soared to $33.25 before paring its gains a bit. We are adjusting the stop loss to $29.75. If you're looking for another entry point wait for a bounce near the $30.50 region. Our target is the $34.00-34.50 range.

Picked on November 22 at $ 30.73 /gap open higher
Change since picked:      + 2.29 /originally listed at 30.18
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =       1.3 million  


Entergy Corp. - ETR - close: 84.95 change: +0.81 stop: 79.65

Monday's rally attempt in shares of ETR were rather anemic. The stock seriously under performed the moves across the major indices. We did suggest that more conservative traders wait for a dip back toward $84.00 as an entry point and we got that dip today with a low of $83.28. If ETR doesn't bounce tomorrow we may abandon this play early. The P&F chart is bullish with a $104 target. We're setting two targets. Our first target to take profits is $92.50. Our secondary target is $97.50. Keep a wary eye on possible resistance at the 100-dma and exponential 200-dma overhead.

Picked on November 22 at $ 85.76
Change since picked:      + 0.81
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =       2.3 million  


Fluor Corp. - FLR - close: 37.18 change: +5.28 stop: 33.45*new*

Target achieved. Shares of FLR just exploded higher on Monday. The stock gapped open at $33.64 and soared to $38.33 before paring its gains in the last 20 minutes of trading. Our first target was $35.50. Our secondary target is $39.50. We are not suggesting new bullish positions at this time. Please note that we are raising the stop loss to $33.45, just under today's open.

Chart:
FLR

Picked on November 22 at $ 33.64 /gap open entry/ 1st target hit 11/24
Change since picked:      + 5.28 /originally listed at 31.90
Earnings Date           02/26/09 (unconfirmed)
Average Daily Volume =       5.7 million  


Research In Motion - RIMM - close: 45.26 change: +0.46 stop: 41.25

Target achieved. The media is reporting that RIMM's new Blackberry Storm models have sold out almost immediately. Evidently there is a backorder now until mid to late December. Shares of RIMM were strong intraday with a rally to $48.26 but eventually sank to a minor 1% gain. The late day action was definitely bearish. Our first target to exit and take profits was $48.00. I am very concerned that RIMM may retrace back to the $42.00-41.00 zone now. We are not suggesting new bullish positions until we see where it bounces. Our plan was very specific about taking some money off the table at $48.00. RIMM will have to break its bearish trend of lower highs if shares have any hope of seeing our aggressive, secondary target at $54.50.

Chart:
RIMM

Picked on November 22 at $ 45.79 /gap higher entry/1st target hit
Change since picked:      - 0.53 /originally listed at $44.80
Earnings Date           12/18/08 (confirmed)
Average Daily Volume =      35.6 million  


Sears Holding - SHLD - close: 35.33 change: +4.89 stop: 29.85*new*

Target exceeded! SHLD was a big out performer today. The RLX retail index rose 10.5% but shares of SHLD soared 16% and closed near their highs. Speaking of highs SHLD hit $36.22 intraday. Our first target to take profits was $34.90. We are raising our stop loss to $29.85. We're not suggesting new bullish positions at this time. Our secondary target is $39.50.

Chart:
SHLD

Picked on November 22 at $ 31.58 /gap open higher/1st target hit
Change since picked:      + 0.00 /originally listed @ 30.44
Earnings Date           12/02/08 (confirmed)
Average Daily Volume =       2.2 million  


PUT Play Updates

*Currently we do not have any put play updates*


Strangle & Spread Play Updates

SPDR GOLD Trust - GLD - close: 80.91 change: +2.06 stop: n/a

All things commodity related surged higher on Monday thanks to a sharp drop lower in the U.S. dollar. The GLD gold ETF added another 2.6% on top of Friday's gain. Shares of the GLD rallied to technical resistance at the 100-dma and exponential 200-dma. The December $75 call is now trading in the money with a $7.70bid and $8.00ask. If you exited now that's a 22.2% gain. After such a sharp rally it's probably time for a step or two backward for the bulls to catch their breath.

We are not suggesting new strangle positions at this time. Our remaining strangle involves December options.

What is a strangle?
A strangle involves buying both an out-of-the-money call and an out-of-the-money put. We don't care what direction the stock goes as long as it moves one direction. If the stock moves far enough one side of our trade will rise in value and pay for the entire trade and make a profit.

-December Strangle-

Summary:
We suggested readers buy the December $75 call (GVD-LW) and the December $70 puts (GVD-XR). Our estimated cost was $6.30. We want to sell if either option hits $12.00.

Picked on November 09 at $ 72.50
Change since picked:      + 8.41
Earnings Date           00/00/00
Average Daily Volume =      19.3 million  


Ultra S&P500 ProShares - SSO - close: 23.65 change: +2.44 stop: n/a

The S&P 500 and the SSO have both bounced back to their simple 10-dma. We don't see any changes from our weekend comments.

We're not suggesting new positions at this time.

Note: The SSO is an ultra-long ETF that typically moves twice the daily performance of the S&P 500 index.

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.

-December Strangle Details-
We suggested readers buy the December $30.00 call (SOJ-LD) and the December $20.00 put (SOJ-XT). Our estimated cost is $3.75. We want to sell if either option hits $6.00.

Annotated Chart:
%IMG %

Picked on November 12 at $ 24.84
Change since picked:      - 1.19
Earnings Date           00/00/00
Average Daily Volume =       126 million  


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