Option Investor
Play Updates

One Play Triggered, Two New Stop Adjustments

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CALL Play Updates

Apple Inc - AAPL - close: 95.00 change: -3.21 stop: 88.99

Shares of AAPL plunged lower in the last two hours of trading and settled right at the $95.00 mark, which was expected to be short-term support. I think the dip continues and the stock trades a couple of points lower. More conservative traders will want to just step back and wait to see where it bounces. It's very possible that AAPL drops closer to $90 before bouncing, which would be a much better entry point. Currently we're suggesting readers buy calls on a dip into the $94.00-92.00 zone.

If triggered at $94.00 we have two targets. Our first target is $99.85. Our second target is $107.50.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =      52.8 million  


Amazon.com - AMZN - close: 48.25 change: -1.45 stop: 43.25

AMZN lost 2.8% and looks ready to drop toward $45.00. I'm going to modify our entry range from $46.00-45.00 to $46.00-44.00. More conservative traders will want to wait and see if AMZN nears $44.00 (or wait for the bounce) before initiating positions. Officially the newsletter will open the play at $46.00. We have two targets. 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  


China Mobile Ltd. - CHL - close: 51.83 change: -0.09 stop: 47.75

The CHL didn't move much and spent the majority of the session in a narrow 65-cent range. The stock eventually pulled back late in the day. We continue to suggest that readers take profits here. We're not suggesting new bullish positions. CHL hit our first target at $51.75 two days ago. 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.

Picked on December 03 at $ 47.11 /gap down entry
Change since picked:      + 4.72 /originally listed at $47.85
Earnings Date           00/00/08 (unconfirmed)
Average Daily Volume =       3.9 million  


Chipotle Mexican Grill - CMG - close: 55.05 chg: -3.86 stop: 48.45

CMG encountered some profit taking today. The stock lost 6.5% but has not yet broken its short-term trend of higher lows. We are sticking to our plan. Our suggested entry point is to buy calls on a pull back into the $51.00-49.00 zone. Our stop loss is at $48.45. If triggered at $51.00 we have two 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: 57.72 change: -1.36 stop: 55.95

Traders need to remain cautious here. ESRX just produced its third failed rally attempt at the $60.00 level in the last three days. This is bearish. I would seriously consider exiting early right here! We are not suggesting new bullish positions at this time. Our target is $64.00.

Picked on December 06 at $ 59.36 /gap higher entry 
Change since picked:      - 1.64 /originally listed at $58.58
Earnings Date           02/19/09 (unconfirmed)
Average Daily Volume =       3.1 million  


FTSE/Xinhau China Index - FXI - close: 30.12 chg: -1.12 stop: 28.45*new*

The FXI lost 3.5% as the late-day sell-off in stocks pulled the ETF toward the $30.00 level. We are not suggesting new bullish positions at this time. If you have not taken any profits yet I would do so now. Four days ago we started telling readers to exit at $30.00 and above. Our secondary target is $34.00. Please note our new stop loss at $28.45.

Picked on December 03 at $ 26.27 /gap down entry point
Change since picked:      + 3.85 /originally listed at $27.25
Earnings Date           00/00/00
Average Daily Volume =      51.2 million  


Goldman Sachs - GS - close: 69.71 change: -1.82 stop: 67.49

It was a volatile day for GS. Shares plunged toward $69 early on only to bounce just as quickly and rally to $74.00. The rally faded and GS drifted back toward $69 before the day was out. The weakness today and the short-term trend of lower highs is bearish. Readers may want to seriously consider raising their stop loss toward the $69.00 level. We're not suggesting new positions at this time.

We have two targets. Our first target is $79.85. Our second target is $89.00 or the 50-dma, whichever one GS hits first. We do not want to hold over the December earnings report. Thus we only have a few trading days to enter and exit this play.

Picked on December 10 at $ 71.00 *triggered
Change since picked:      - 1.29
Earnings Date           12/16/08 (confirmed)
Average Daily Volume =        29 million  


Jacobs Engineering - JEC - close: 47.72 change: -5.46 stop: 42.45

JEC, after two days of struggling to breakout over its simple 100-dma, finally hit some profit taking. The stock gave up more than 10% and closed near its lows for the day. The intraday low was $46.59. Our suggested entry point to buy calls is a dip into the $46.00-45.00 zone. If triggered we have two targets. Our first target will be $51.00. Our second target will be $54.90.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           01/21/09 (unconfirmed)
Average Daily Volume =       3.0 million  


Priceline.com - PCLN - close: 60.96 change: -1.12 stop: 59.75*new*

Something happened this morning but I can't find the news to account for the gap higher and sudden spike in PCLN to $67.70 a share. The rally quickly faded and PCLN eventually closed down 1.8%. This failed rally is bearish. We are raising our stop loss to $59.75 and any follow through lower tomorrow will stop us out.

We're not suggesting new bullish positions at this time. PCLN has already hit our first target near $65.00. We currently have a secondary, more aggressive target at $69.90. FYI: The Point & Figure chart is bullish with a $102 target.

Picked on December 06 at $ 61.60 /gap open higher
Change since picked:      - 0.64 /originally listed at $60.46
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       1.8 million  


Wynn Resorts - WYNN - close: 40.70 change: -3.60 stop: 38.45

WYNN was a big under performer today. The stock produced a failed rally under $45.00 and then lost 8%. The decline was strong enough to push WYNN to our suggested entry point at $40.75. Now that the play is open our stop loss is at $38.45. More conservative traders may want to use a stop loss closer to $40.00 instead. We have two targets. Our first target is $44.75. Our second target is $49.00. I would expect some resistance at the 50-dma but the P&F chart has turned bullish with a $62 target.

Chart:
WYNN

Picked on December 11 at $ 40.75
Change since picked:      - 0.05
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       3.2 million  


PUT Play Updates

*Currently we do not have any put play updates*


Strangle & Spread Play Updates

SPDR GOLD Trust - GLD - close: 80.65 change: +0.90 stop: n/a

A sharp drop in the U.S. dollar helped the GLD rally past $80 and technical resistance at its 100-dma. Yet the GLD has not yet broken out past its late November highs.

We're quickly running out of time as December options expire in six trading days. I am reiterating previous suggestions that more conservative traders cut their losses and exit early. FYI: The December $75 call hit $7.10 intraday.

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:      + 8.15
Earnings Date           00/00/00
Average Daily Volume =      19.3 million  


Ultra S&P500 ProShares - SSO - close: 25.00 change: -1.36 stop: n/a

The S&P 500 index lost 2.8% and is developing a very short-term trend of lower highs. It's possible we are seeing a bull flag develop. Unfortunately, we're running out of time. The SSO lost 5.1% on the session. We only have six trading days 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:      + 0.16
Earnings Date           00/00/00
Average Daily Volume =       126 million  


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