Option Investor
Play Updates

We are adjusting some stops

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CALL Play Updates

Amazon.com - AMZN - close: 41.19 change: +0.72 stop: 38.70

AMZN almost hit our stop loss this morning with a spike down to under $39.00 in the first hour of trading. Fortunately traders bought the dip at $38.82 and AMZN eventually ended the day up 1.7%. Yet it is worth noting that AMZN's bounce was less than half the rebound seen in the S&P 500. I remain short-term bullish on AMZN but you might want to wait for a rise over $41.75 or $42.00 before initiating new positions.

We are listing two targets. Our first target is $44.50. Our second target is $48.50. FYI: The P&F chart recently produced a new buy signal with a $53 target.

Picked on December 01 at $ 40.50 *triggered     
Change since picked:      + 0.69
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =      12.7 million  


Apollo Group - APOL - close: 75.68 change: +4.62 stop: 70.95*new*

APOL delivered a strong day. The stock gapped open higher at $73.15 and then rallied to over $76.00 intraday. Shares closed up 6.5%, which was better than the 4% gain in the S&P 500. Investors bought the afternoon dip at $74.00, which is a good sign. We are raising our stop loss to $70.95, which is under Monday's low of 71.05. Our target is the $79.75 mark. FYI: The Point & Figure chart is bullish with a $99 target.

Picked on December 01 at $ 73.00 *triggered     
Change since picked:      + 2.68
Earnings Date           01/06/09 (unconfirmed)
Average Daily Volume =       4.0 million  


Entergy Corp. - ETR - close: 82.96 change: +1.82 stop: 79.99

ETR managed to recoup about half of yesterday's losses after investors bought the dip near $81.00 a couple of times this afternoon. I am tempted to buy this bounce but more conservative traders may want to wait for a rise over $84.00 first. The short-term five-day trend is still a pattern of lower highs.

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:      - 2.80
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =       2.3 million  


Lockheed Martin - LMT - close: 73.63 change: +2.56 stop: 70.90 *new*

LMT had some good news for investors today. The company beat the competition to win a NASA weather satellite contract worth up to $1.1 billion. The stock traded in a wide four-dollar range but traders bought the dip near $1.00 this afternoon. LMT still has short-term resistance at $75.00. We are upping our stop loss to $70.90.

We have two targets. Our first target is $78.50. Our second target is $81.50.

Picked on December 01 at $ 73.50 *triggered     
Change since picked:      + 0.13
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =       3.6 million  


PUT Play Updates

*Currently we do not have any put play updates*


Strangle & Spread Play Updates

SPDR GOLD Trust - GLD - close: 76.95 change: +1.30 stop: n/a

Gold spent the session quietly going nowhere but I suspect that is going to change soon. The action in the U.S. dollar looks bearish. A chart of the U.S. dollar shows it bouncing the last few days but it has only bounced enough to "fill the gap" from its big plunge a week ago. The next move for the dollar should be down, which would normally lift the price of gold and shares of the GLD.

Of course this is a neutral play and we don't care what direction the GLD goes as long as it moves significantly in a single direction. We are not suggesting new strangle positions. December options expire in less than three weeks.

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:      + 4.45
Earnings Date           00/00/00
Average Daily Volume =      19.3 million  


Ultra S&P500 ProShares - SSO - close: 23.55 change: +1.55 stop: n/a

After yesterday's punishing session the S&P 500 only recouped about 40% of its losses. That equaled a 7% move higher for the SSO. We're not suggesting new strangles at this time. December options have less than three weeks before they expire.

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.

Picked on November 12 at $ 24.84
Change since picked:      - 1.29
Earnings Date           00/00/00
Average Daily Volume =       126 million  


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