Option Investor
Play Updates

Stocks Churn Lower

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CALL Play Updates

Apple Inc - AAPL - close: 94.75 change: -3.52 stop: 92.40

Shares of AAPL were hit hard today after Goldman Sachs downgraded the stock from a "buy" to a "neutral" this morning. AAPL gapped open lower at $95.99 and quickly fell under what should have been short-term support near $95.00. The stock did manage to find support near $93.00 so the play remains open. A new rise over $95.00 can be used as another entry point to buy calls. More conservative traders might want to raise their stops toward $93.00. Our first target is $99.85. Our second target is $107.50.

Picked on December 12 at $ 92.80 *gap down entry 
Change since picked:      + 1.95
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =      52.8 million  


Amazon.com - AMZN - close: 48.85 change: -2.40 stop: 47.49

AMZN suffered some profit taking today. Shares lost 4.6% but managed to bounce from its 10-dma near $48.15. The stock is holding on to its short-term, bullish channel for now. If the market continues lower tomorrow AMZN will probably hit our stop loss. Wait for a new rise over $50.00 before considering new bullish positions.

Our first target is $54.95. Our second target is $59.50. More aggressive traders may want to aim for the 100-dma. FYI: The P&F chart is bullish with a $73 target.

Picked on December 13 at $ 51.25
Change since picked:      - 2.40
Earnings Date           01/28/09 (unconfirmed)
Average Daily Volume =      12.9 million  


China Mobile Ltd. - CHL - close: 51.70 change: +0.05 stop: 49.75

The Chinese markets were higher on Monday and that allowed CHL to out perform the U.S. indices. CHL is holding above round-number support at $50.00. We don't see any changes from our weekend comments.

CHL has already hit our first target at $51.75. We're currently aiming for the $57.00 level.

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:      + 4.59 /originally listed at $47.85
Earnings Date           00/00/08 (unconfirmed)
Average Daily Volume =       3.9 million  


Covance Inc. - CVD - close: 39.46 change: -1.12 stop: 37.97

Wow! The action in CVD was a little surprising. Over the weekend we listed a trigger to buy calls at $41.55. What was the intraday high today? Yes, you guessed it. It was $41.55. CVD tagged a new high this morning and then reversed lower. Shares lost 2.7% by the end of the day. I suggest waiting for a new rise over $40.75 or $41.50 before initiating new bullish positions. We have two targets. Our first target is $46.00. Our second target is $49.50. Don't forget that CVD has a relatively high amount of short interest at 7% of the 62 million-share float.

Chart:
CVD

Picked on December 15 at $ 41.55 *triggered     
Change since picked:      - 2.09
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =       1.2 million  


Express Scripts - ESRX - close: 58.80 change: +1.32 stop: 55.95

ESRX delivered a much-needed bounce on Monday so we are going to keep the play alive. Our stop loss under short-term support at $56.00 looks good. I would be tempted to buy this bounce but our weekend comments about waiting for a move over $59.00 or $60.00 still stand. Our target is $64.00.

Picked on December 06 at $ 59.36 /gap higher entry 
Change since picked:      - 0.56 /originally listed at $58.58
Earnings Date           02/19/09 (unconfirmed)
Average Daily Volume =       3.1 million  


FTSE/Xinhau China Index - FXI - close: 29.05 chg: -0.94 stop: 28.65

Our bullish play on FXI almost didn't survive Monday. Shares slipped to $28.71. Our stop loss is $28.65. Strength in the Chinese markets on Monday failed to have any impact on the FXI. If you just look at the intraday action for today FXI looks bearish but the stock did bounce from its 10-dma on the daily chart. Readers may want to consider buying a bounce from here but trade cautiously. FXI has already hit our first target and we are now aiming for $32.50.

Picked on December 03 at $ 26.27 /gap down entry point
Change since picked:      + 2.78 /originally listed at $27.25
Earnings Date           00/00/00
Average Daily Volume =      51.2 million  


Google Inc. - GOOG - close: 310.67 change: - 5.09 stop: 293.50

Early this morning GOOG rallied to a new relative high at $318.49 and then struggled to hold its gains. The stock pulled back and tried to hold support at $310 but eventually dipped toward $305.00 before bouncing back. Over the weekend we suggested that a dip back toward $310 or $305 could be used as an attractive entry point and we got it. Another alternative, if you want to see more confirmation of the short-term up trend, is to wait for a rally over $320 or its 50-dma (near $322) before initiating positions.

We have two strategies listed on GOOG. One is a directional call play with an exit target at $360.00.

Our second strategy is a naked put play where we sell the naked put and then buy it back for less and our target to exit the naked put play is $350. The suggested put to sell was the January $350 put (GGD-MJ).

Picked on December 13 at $315.76
Change since picked:      - 5.09
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =       7.2 million  


Jacobs Engineering - JEC - close: 45.26 change: -1.54 stop: 42.45

JEC tried to bounce this morning but eventually turned lower as the major market indices slid deeper into the red. We remain short-term bullish on JEC but readers may want to wait for a bounce before initiating positions. Last week the stock hit our trigger to buy calls when it gapped down at $44.60. We're going to leave our stop loss unchanged at $42.45. We have two targets. Our first target will be $51.00. Our second target will be $54.90.

Picked on December 12 at $ 44.60 *gap down entry
Change since picked:      + 0.66
Earnings Date           01/21/09 (unconfirmed)
Average Daily Volume =       3.0 million  


Priceline.com - PCLN - close: 62.93 change: -1.76 stop: 59.75

PCLN failed to make any progress on Friday's bullish bounce. We would still buy another bounce from $60.00 if it appears. PCLN has already hit our first target near $65.00. We're currently aiming for $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:      + 1.33 /originally listed at $60.46
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       1.8 million  


NYSE Euronext - NYX - close: 26.54 change: -0.99 stop: 25.45

I don't see any changes from our weekend comments on NYX. We are still waiting for a breakout over resistance at $28.00. We are suggesting readers use a trigger to buy calls at $28.10. If triggered our target is the $32.50 mark or the simple 100-dma (currently 33.42), whichever one the stock hits first. FYI: The P&F chart is bullish with a $43 target.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           02/09/09 (unconfirmed)
Average Daily Volume =       5.8 million  


Texas Industries - TXI - close: 32.97 change: -1.46 stop: 31.25

TXI came close to retesting last week's low but found support at the rising 10-dma. Monday's move looks like a new entry point for bullish positions. Don't forget that the stock is also a candidate for a short squeeze. The most recent data listed short interest at more than 20% of the very small 21 million-share float. We have two targets. Our first target is $39.50. Our second target is $43.00.

Picked on December 13 at $ 34.43
Change since picked:      - 1.46
Earnings Date           01/08/09 (unconfirmed)
Average Daily Volume =       745 thousand 


ExxonMobil - XOM - close: 79.95 change: -0.50 stop: 78.45

Crude oil rallied sharply higher this morning but quickly reversed lower to plunge more than 10% from its intraday high. The moves in oil failed to have much impact on shares of XOM. Shares of XOM remain under resistance at $82 and its 200-dma. We're waiting for a breakout. I'm suggesting readers use a trigger to buy calls at $82.25. Once triggered our target is $89.50. There is some resistance at $85.00 but I would expect XOM to push through it. FYI: The P&F chart is bullish with a $98 target.

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           02/05/09 (unconfirmed)
Average Daily Volume =        56 million  


PUT Play Updates

*Currently we do not have any put play updates*


Strangle & Spread Play Updates

SPDR GOLD Trust - GLD - close: 82.60 change: +1.79 stop: n/a

Another day of weakness for the U.S. dollar sent gold prices higher. The GLD rallied 2.2% and broke through resistance at $82 and its exponential 200-dma. The Dec. $75 call hit a high of $8.00 today. Readers may want to start taking profits soon because any downturn in the GLD will see our position turn into a loss. Our target to exit this play is $9.90 for the option.

We only have four trading days left before December options expire. More conservative traders will want to seriously consider exiting early right here to protect capital.

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 $9.90.

Picked on November 09 at $ 72.50
Change since picked:      +10.10
Earnings Date           00/00/00
Average Daily Volume =      19.3 million  


Ultra S&P500 ProShares - SSO - close: 24.68 change: -0.58 stop: n/a

The S&P 500 index lost about 1.25% on Monday. At this point, with only four days left, the outlook for our strangle doesn't look good. More conservative traders need to be looking for an exit either here or anywhere near breakeven.

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  


CLOSED BULLISH PLAYS

Wynn Resorts - WYNN - close: 40.76 change: -1.32 stop: 39.40

We've got good news and bad news with WYNN. The good news is that shares hit our first target this morning. Actually the stock gapped open higher at $45.29 and our first target to take profits was $44.75. The bad news is that WYNN produced a very bearish failed rally under its simple 50-dma and sank toward $39.00 hitting our stop loss at $39.40 along the way. Thus our secondary, more-aggressive target at $49 will not be reached. We would keep WYNN on your watch list for a breakout over the 50-dma or a breakdown under its trendline of higher lows.

Chart:
WYNN

Picked on December 11 at $ 40.75
Change since picked:      + 0.01
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       3.2 million  


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