Option Investor
Play Updates

Strong day for the bulls, check your stops.

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CALL Play Updates

Amazon.com - AMZN - close: 51.41 change: +3.15 stop: 43.25

AMZN continues to rebound sharply higher. The stock dipped to $47.36 before soaring 6.5% and closing above round-number resistance at $50.00 and technical resistance at the 50-dma. We were looking to buy a dip at $46.00 so we're still sitting on the sidelines. As encouraging as today's gain is we would not chase AMZN here. We'll stick to the plan, which is buy calls on a pull back into the $46.00-45.00 zone. Our first (short-term) target is $49.95. Our secondary target is the $54.00 mark. The P&F chart is bullish with a $74 target.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           01/28/09 (unconfirmed)
Average Daily Volume =      12.9 million  


Apollo Group - APOL - close: 75.96 change: +0.09 stop: 72.25 *new*

It was a quiet session for APOL. The stock did hit new nine-month highs at $77.84 but failed to hold them and closed with a fractional gain, under performing the broader market. The overall trend in APOL is still bullish but today's relative weakness is a mystery and a concern. Friday's intraday low was $72.31. We are raising our stop loss to $72.25. We're not suggesting new bullish positions at this time. Our target is $79.75. FYI: The Point & Figure chart is bullish with a $99 target.

Picked on December 01 at $ 73.00 *triggered     
Change since picked:      + 2.96
Earnings Date           01/06/09 (unconfirmed)
Average Daily Volume =       4.0 million  


China Mobile Ltd. - CHL - close: 52.91 change: +3.20 stop: 47.75*new*

Target exceeded! CHL was very strong today. The stock gapped open higher at $52.14, which was above our first target to take profits at $51.75. This happened to be above technical resistance at the simple 100-dma and CHL held there to close up 6.4%. We are raising our stop loss to $47.75. More conservative traders may want to raise their stop toward $50.00 or just exit altogether. We still have a secondary, more-aggressive target at $57.00.

Note: I was unable to find an earnings date for CHL, which does raise our risk since we prefer to avoid holding over an earnings report.

Chart:
CHL

Picked on December 03 at $ 47.11 /gap down entry
Change since picked:      + 5.80 /originally listed at $47.85
Earnings Date           00/00/08 (unconfirmed)
Average Daily Volume =       3.9 million  


Chipotle Mexican Grill - CMG - close: 56.89 chg: +3.79 stop: 48.45*new*

As I suspected over the weekend, CMG continued to rally and charged higher to tag its 100-dma near $58.00. The stock closed the day +7% higher. We did not want to chase the move. Our plan was to buy a dip in the $50.00-48.00 zone. We're going to alter that now so that our entry point to buy calls is the $51.00-49.00 zone. We're raising the stop loss to $48.45. If triggered at $51.00 we have two (new) targets. Our first target is $54.85. Our secondary target is $59.00.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       475 thousand 


Express Scripts - ESRX - close: 60.46 change: +1.88 stop: 55.95*new*

ESRX, like many stocks today, actually gapped open higher at the open. That makes our official entry point $59.36. On a positive note the stock broke through technical resistance at its 50-dma and managed to close over round-number resistance at $60.00. We are raising our stop loss to $55.95. More conservative traders might want to consider a stop loss closer to $58.00 instead. Our target is $64.00.

Picked on December 06 at $ 59.36 /gap higher entry 
Change since picked:      + 1.10 /originally listed at $58.58
Earnings Date           02/19/09 (unconfirmed)
Average Daily Volume =       3.1 million  


FTSE/Xinhau China Index - FXI - close: 30.30 chg: +2.47 stop: 26.49*new*

Exit alert! We are altering our exit strategy and suggest readers start taking profits in our FXI calls immediately! The stock gapped open higher at $29.72 and rallied to $30.75 intraday to close up 8.8% and close above round-number resistance at $30.00. Instead of waiting for FXI to hit $32.50 we are telling readers to book a profit right now. We're also raising our stop loss to $26.49. We need to expect FXI to fill the gap from this morning, which would mean a dip back toward $28.00. Please note that we're also adjusting our secondary target down from $34.00 to $32.50 and plan to keep the target under the descending 100-dma.

Chart:
FXI

Picked on December 03 at $ 26.27 /gap down entry point
Change since picked:      + 4.03 /originally listed at $27.25
Earnings Date           00/00/00
Average Daily Volume =      51.2 million  


Priceline.com - PCLN - close: 64.45 change: +3.99 stop: 58.49*new*

Target achieved! PCLN displayed some relative strength today. The stock actually gapped open higher at $61.60 so we didn't get the entry point listed over the weekend. Shares went almost straight up and hit $65.50 intraday. Our first target to take profits was $64.90. If you missed your entry point this morning I would wait for a dip back toward the $61-60 zone before initiating new positions. Please note that we're raising our stop loss to $58.49. Our second target is $69.90. FYI: The Point & Figure chart is bullish with a $102 target.

Chart:
PCLN

Picked on December 06 at $ 61.60 /gap open higher
Change since picked:      + 0.00 /originally listed at $60.46
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       1.8 million  


PUT Play Updates

*Currently we do not have any put play updates*


Strangle & Spread Play Updates

SPDR GOLD Trust - GLD - close: 76.19 change: +1.68 stop: n/a

A nice drop in the U.S. dollar helped lift the GLD to a 2.2% gain. We're quickly running out of time as December options expire in less than two weeks. I am reiterating previous suggestions that more conservative traders cut their losses and exit early.

We are not suggesting new strangle positions in the GLD.

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:      + 3.70
Earnings Date           00/00/00
Average Daily Volume =      19.3 million  


Ultra S&P500 ProShares - SSO - close: 26.85 change: +1.77 stop: n/a

It was a very bullish day for the markets. The S&P 500 index rallied more than 3.8% and broke through round-number, psychological resistance at the 900 mark. This helped the SSO surged more than 7%. Hopefully this trend will continue. We have less than two weeks left before December options expire.

We're not suggesting new strangles 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.

Picked on November 12 at $ 24.84
Change since picked:      + 2.01
Earnings Date           00/00/00
Average Daily Volume =       126 million  


CLOSED BULLISH PLAYS

Fedex - FDX - close: 74.43 change: +0.72 stop: 69.45

FDX under performed the market on Monday after oil finally bounced following several days of declines. The stock gapped open at $75.20 but dipped to $72.52 intraday, providing a better entry point to buy calls. Unfortunately it looks like the bulls are about to get smacked!

After the closing bell FDX offered some unexpected earnings guidance. The company now expects its Q2 results to come in at $1.58 versus analysts' estimates of $1.54. That's not so bad. What is going to kill the bulls tomorrow is FDX's guidance for 2009. The company estimates that earnings will be in the $3.50-4.75 range for the year. Analysts had been expecting full-year earnings of $5.15. After-hours reaction is very negative with the stock trading under $66.00.

We suggest readers abandon ship. Aggressive traders may want to consider holding on in hopes of a midday oversold bounce with the expectation that you might be able to exit in the $69-70 zone. We are hitting the eject button and will exit at the earliest opportunity.

Chart:
FDX

Picked on December 06 at $ 75.20 /gap higher entry
Change since picked:      + 0.00 /originally listed at $73.71
Earnings Date           12/18/08 (confirmed)
Average Daily Volume =       3.9 million  


Lockheed Martin - LMT - close: 81.65 change: +1.46 stop: 74.49

Target exceeded! LMT surged to $83.36 intraday before reversing under its simple 50-dma. Our secondary, more-aggressive target to take profits was at $81.50. Our LMT is closed but we would keep an eye on it for another opportunity if shares bounce from their 10-dma or the $77.00 region.

Chart:
LMT

Picked on December 01 at $ 73.50 *triggered     
Change since picked:      + 8.15
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =       3.6 million  


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