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Play Updates

Stocks Surge. Time to Adjust Some Stops

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CALL Play Updates

Amazon.com - AMZN - close: 52.63 change: +3.78 stop: 47.49

AMZN continues to find strength at its rising 10-dma. When the market began to rally in earnest shares of AMZN broke out to new five-day highs and closed up 7.7%. All the lights look green. AMZN is poised for more gains if the market can stay positive.

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:      + 1.38
Earnings Date           01/28/09 (unconfirmed)
Average Daily Volume =      12.9 million  


China Mobile Ltd. - CHL - close: 55.22 change: +3.52 stop: 51.90*new*

Shares of CHL continued to rally and the stock broke out from its six-day trading range. The stock also broke out past round-number resistance at $55.00 and closed with a 6.8% gain. CHL is up more than 17% from our entry point. If you have not taken profits yet I strongly suggest you do so now. Our secondary target is $57.00. We are raising our stop loss to $51.90.

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:      + 8.11 /originally listed at $47.85
Earnings Date           00/00/08 (unconfirmed)
Average Daily Volume =       3.9 million  


Covance Inc. - CVD - close: 41.00 change: +1.54 stop: 37.97

It was a bullish day for CVD, which closed up 3.9%. Yet the stock failed to really breakout from its congestion area around $40-41. Readers could use the afternoon rally as an entry point but more conservative traders may want to wait for a new rise over $41.50 first. 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.

Picked on December 15 at $ 41.55 *triggered     
Change since picked:      - 0.55
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =       1.2 million  


Express Scripts - ESRX - close: 61.36 change: +2.56 stop: 56.95*new*

The 4.3% rally in ESRX looks like a breakout from a bull-flag pattern. We remain bullish and don't see any changes from our previous comments except that we're raising our stop loss to $56.95. Our target is $64.00.

Picked on December 06 at $ 59.36 /gap higher entry 
Change since picked:      + 2.00 /originally listed at $58.58
Earnings Date           02/19/09 (unconfirmed)
Average Daily Volume =       3.1 million  


FTSE/Xinhau China Index - FXI - close: 31.17 chg: +2.12 stop: 28.65

FXI rallied sharply this morning and then shot higher again when the U.S. markets extended their gains after the Fed decision came out. FXI is very close to breaking out from its seven-day trading range. 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:      + 4.90 /originally listed at $27.25
Earnings Date           00/00/00
Average Daily Volume =      51.2 million  


Google Inc. - GOOG - close: 325.28 change: +14.61 stop: 299.90*new*

GOOG enjoyed a strong 4.7% rally, which lifted shares past resistance near $320 and its 50-dma. If you were waiting for a breakout this is it. We are adjusting our stop loss to $299.90.

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:      + 9.52
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =       7.2 million  


Jacobs Engineering - JEC - close: 48.94 change: +3.68 stop: 42.45

JEC was a big winner on Tuesday with an 8.1% gain. Volume was a little bit above average. The next level of overhead resistance for JEC is the 100-dma just under $52.00. We don't see any changes from our previous comments although more conservative traders might want to start inching up their stops. 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:      + 4.34
Earnings Date           01/21/09 (unconfirmed)
Average Daily Volume =       3.0 million  


Priceline.com - PCLN - close: 67.40 change: +4.47 stop: 59.75

Shares of PCLN were early winners today with an immediate spike higher this morning. The rally continued later this afternoon and PCLN ended the session up 7.1%. If you haven't taken any profits yet I would consider doing so now. We're leaving our stop loss under $60.00 but more conservative traders may want to raise theirs toward $62. 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:      + 5.80 /originally listed at $60.46
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       1.8 million  


NYSE Euronext - NYX - close: 29.94 change: +3.40 stop: 27.25*new*

The afternoon rally in stocks was enough to push NYX past resistance at $28.00. Shares hit our trigger to buy calls at $28.10. NYX displayed some impressive relative strength with a 12.8% gain on above average volume. NYX is now facing round-number resistance at $30.00. I do believe that NYX will continue higher but it might retest the $28 region first. We are upping the stop loss to $27.25. Our target is the $32.50 mark or the simple 100-dma (currently 33.04), whichever one the stock hits first. FYI: The P&F chart is bullish with a $43 target.

Chart:
NYX

Picked on December 16 at $ 28.10 *triggered     
Change since picked:      + 1.84
Earnings Date           02/09/09 (unconfirmed)
Average Daily Volume =       5.8 million  


Texas Industries - TXI - close: 35.25 change: +2.28 stop: 31.25

Yet again TXI bounced from its rising 10-dma. The stock looks poised for more gains and I would buy this bounce. There is possible resistance at the 10-dma but I think TXI will push past it. 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:      + 0.82
Earnings Date           01/08/09 (unconfirmed)
Average Daily Volume =       745 thousand 


ExxonMobil - XOM - close: 83.14 change: +3.19 stop: 78.45

The post-FOMC decision rally helped push XOM past resistance at $82.00 and its 200-dma. Shares hit our trigger to buy calls at $82.25 so the play is now open. 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.

Chart:
XOM

Picked on December 16 at $ 82.25 *triggered     
Change since picked:      + 0.89
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: 84.46 change: +1.86 stop: n/a

Prepare to exit! The U.S. dollar crashed lower today as markets reacted to the FOMC interest-rate news. This sent many commodities higher, including gold. The GLD rose 1.8% and the December $75 call option (GVD-LW) hit a high of $9.50 intraday and is currently trading at $9.20bid/$9.80ask. Our target to exit this GLD strangle is $9.90 on the option. We only have three days left before December options expire. The plan is to exit tomorrow. There could be some follow through and the GLD might rally to $85.00, which is overhead resistance. If our call option does not hit our target at $9.90 tomorrow by 10:30 a.m. we will exit anyway at whatever the price is at.

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:      +11.96
Earnings Date           00/00/00
Average Daily Volume =      19.3 million  


Ultra S&P500 ProShares - SSO - close: 27.13 change: +2.45 stop: n/a

The S&P 500 index soared more than 5% and broke out over the 900 level and its 50-dma. The SSO reacted with a 10.2% gain. We only have three days left before our December options expire. If the rally continues the SSO might be above $30.00 before expiration but that is a big gamble. If it does happen I would not expect it to happen until Thursday or Friday. Be prepared to exit for whatever we can get.

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:      + 2.29
Earnings Date           00/00/00
Average Daily Volume =       126 million  


CLOSED BULLISH PLAYS

Apple Inc - AAPL - close: 95.43 change: +0.68 stop: 92.40

Something has to be wrong with AAPL if the NASDAQ composite can rally more than 5% and the best AAPL can do is 68 cents. Shares of AAPL dipped to $92.75 intraday but found support at its 20-dma for the second time in three sessions. We are suggesting readers exit early as AAPL is definitely struggling.

Investors are unsure how to interpret some news out after the closing bell. AAPL announced that this was the last year the company would exhibit at the Macworld Expo and that Steve Jobs would not give the keynote address. Shares of AAPL were trading wildly after hours in a four to five dollar range.

Chart:
AAPL

Picked on December 12 at $ 92.80 *gap down entry 
Change since picked:      + 2.63
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =      52.8 million  


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