CALL Play Updates

CF Industries - CF - close: 82.19 change: -0.93 stop: 79.75

CF tried to rally this morning but it failed at $84.48. The session produced a bearish reversal/bearish engulfing candlestick pattern. We can probably expect a dip back toward $80.00 if the market's rally doesn't pick up some speed.

Currently our plan is to buy calls on a breakout over resistance with a trigger to launch positions at $85.25. If triggered at $85.25 our stop loss is at $79.75 and our first target is $89.85. Our second target is $97.50. My time frame is four to six weeks. FYI: A breakout over $85.00 would produce a new triple-top breakout buy signal on the Point & Figure chart.

Trading note: Investors should note that Agrium (AGU) has been trying to buy CF for months. CF has been trying to buy Terra Industries (TRA) for months. Nobody is selling because they claim the offers don't fully value the company (a.k.a. it's not enough money). There is potential upside if AGU finally makes a high enough offer or someone else steps in. There is potential downside if CF makes too high a bid for TRA and the market thinks they overpaid. This M&A merger dance hasn't affected the stock much lately but it is a risk either direction.

Picked on   August xx at $ xx.xx <-- TRIGGER 85.25
Change since picked:      + 0.00
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       872 thousand 
Listed on August 24, 2009         


EOG Res. Inc. - EOG - close: 74.41 change: -1.42 stop: 69.90 *new*

*Updated Trigger and Stop Loss*

Crude oil rallied right to resistance near $75.00 and immediately failed plunging more than 3% on the session. The oil sector stumbled on the move. After taking a closer look at the trading action in the OIX oil index I suspect the OIX could dip toward the 610 level before bouncing. With that in mind I'm adjusting our entry point to buy calls on EOG down to $72.50 and our stop loss down to $69.90. Our first target is $79.50. Our second target is $88.00. The daily chart is building an inverse H&S pattern that is forecasting a rally toward $100.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 72.50 *new*
Change since picked:      + 0.00
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       2.4 million  
Listed on August 22, 2009         


FISERV Inc. - FISV - close: 49.50 change: +0.20 stop: 46.60

FISV is still inching higher. I suspect that when FISV hits $50 it will dip and readers can jump back in on a pull back near $48.50-48.00 again. Our first target to take profit is at $52.50. I'm setting a second target to exit completely at $54.00.

Picked on   August 21 at $ 48.60 *triggered         
Change since picked:      + 0.90
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 19, 2009         


Fluor Corp. - FLR - close: 54.96 change: -0.52 stop: 49.95

FLR suffered a little bit of profit taking with a 0.9% decline. I don't see any changes from my prior comments. If you're looking for a new entry point I'd wait for a dip near $52.00. FLR has already hit our first target near $55.00. Our second and final target is $59.00.

Picked on   August 17 at $ 51.00 *triggered            
Change since picked:      + 3.96
                           /1st target exceeded @ 55.10 gap open (+8.0%)
Earnings Date           08/10/09 (confirmed)
Average Daily Volume =       2.4 million  
Listed on  July 25, 2009         


Flowserve - FLS - close: 89.53 change: -0.37 stop: 84.75

Technical indicators on FLS' daily chart are starting to roll over and turn bearish. We can probably expect a dip into the $87.00-85.00 zone soon. We currently have a trigger to open small positions at $87.50. More conservative traders may want to hold out for a lower entry point. If triggered at $87.50 our first target is $92.25. Our second target is $98.50. Our time frame is several weeks.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 87.50 (1/2 pos)
Change since picked:      + 0.00
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.1 million  
Listed on August 17, 2009         


Genesse & Wyoming - GWR - close: 31.82 change: +0.46 stop: 27.75

GWR displayed some relative strength with a 1.4% gain but shares did trim their intraday gains from $32.41. The stock is arguably a little short-term overbought. Readers may want to go ahead and take some profit off the table right now. I'm not suggesting new positions at this time. Our first target is $32.90. Our second target is $34.75.

FYI: The plan was to use small position sizes to limit our risk.

Picked on   August 15 at $ 28.66 /gap down entry
                               /originally listed at $29.30
Change since picked:      + 3.16
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       230 thousand
Listed on August 15, 2009         


Grainger W.W. - GWW - close: 89.32 change: +0.45 stop: 84.50

GWW is still trading sideways. The good news is that there was not any follow through on yesterday's bearish reversal candlestick. The bad news is that we're waiting for a dip to $86.50 to buy calls. I suggest readers continue to wait. Our first target is $93.50.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 86.50      
Change since picked:      + 0.00
Earnings Date           10/14/09 (unconfirmed)
Average Daily Volume =       635 thousand 
Listed on August 22, 2009         


Intl.Business Machines - IBM - cls: 118.83 change: -0.49 stop: 117.45

I am still concerned that IBM was unable to hold on to yesterday's breakout over resistance. The stock slipped again on Tuesday. I am suggesting readers wait for a close over $120.00 or an intraday move over Monday's high before launching new call positions. Our first target is $124.50. Our second target is $129.00.

Picked on   August 24 at $120.25 
Change since picked:      - 1.42
Earnings Date           10/08/09 (unconfirmed)
Average Daily Volume =       7.9 million  
Listed on August 08, 2009         


IDEXX Labs - IDXX - close: 51.16 change: +0.31 stop: 49.75

IDXX rallied this morning and hit $52.00 before paring its gains. We had an aggressive trigger to buy calls (small position sizes) at $51.75. IDXX had been trading under resistance at $51.50 for the month of August. Today's rally hit our trigger so the play is open. Unfortunately, IDXX's failure to close above $51.50 makes this look like a bearish failed rally/reversal pattern.

Currently our first target to take profits is at $54.90. Our second target is $58.00. However, I would not suggest new positions until we see IDXX close over $51.50 or produce an intraday move over $52.00 (your choice).

Chart:

Picked on   August 25 at $ 51.75 *small position sizes (1/2 to 1/4)
Change since picked:      - 0.59
Earnings Date           07/24/09 (confirmed)
Average Daily Volume =       383 thousand 
Listed on  July 25, 2009         


Legg Mason - LM - close: 28.77 change: +0.59 stop: varies

LM continues to trade sideways. The good news here is that there was no follow through on yesterday's bearish reversal candlestick. However, it's nothing to get excited about because the trading action today merely indicates indecision. We have two different strategies to enter bullish plays on LM.

Our aggressive trade is to buy calls with a trigger at $29.50 and a stop loss at $26.40 and we want to use small position sizes (1/2 to 1/4 normal size).

Our buy the dip trade is to open positions on a dip at $26.60 with a stop loss at $24.95. We want to trade small here as well. FYI: The P&F chart is bullish with a $39 target.

Picked on     July xx at $ xx.xx <-- TRIGGER 26.60 & 29.50
Change since picked:      + 0.00
Earnings Date           07/20/09 (confirmed)
Average Daily Volume =       3.4 million  
Listed on  July 25, 2009         


Lorillard Inc. - LO - close: 77.18 change: -0.86 stop: 72.75

LO saw a little bit of profit taking after yesterday's 4.2% rally. If the stock corrects broken resistance near $75.00 should be new support. Right now our only target to take profits is at $79.90.

Picked on   August 24 at $ 75.75 *triggered   
Change since picked:      + 1.43
Earnings Date           07/27/09 (confirmed)
Average Daily Volume =       1.5 million  
Listed on August 01, 2009         


Mettler Toledo - MTD - close: 87.29 change: -0.09 stop: 83.95

Two days in a row MTD has traded sideways in a $1.00 range. Both Monday and Tuesday saw an intraday spike toward $88.00 first thing in the morning and about 20 minutes later MTD was testing the bottom of the range near $87.00. I am lowering our entry point to buy calls from $86.50 to $86.00. More aggressive traders might want to consider a breakout trigger over $88.00. If triggered our first target is $93.50. Our second target is $99.00. I am labeling this an aggressive play because volume is pretty light for this stock.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 86.00 *updated*
Change since picked:      + 0.00
Earnings Date           11/05/09 (unconfirmed)
Average Daily Volume =       234 thousand 
Listed on August 22, 2009         


Newmarket Corp. - NEU - close: 86.13 change: +2.59 stop: 79.00 *new*

NEU continues to show impressive relative strength. The stock actually gapped open higher at $84.33 so our entry point suffered a bit. Volume was even stronger than yesterday at more than three times the normal volume. Currently we only have 1/2 of our position open. The plan is to buy the second half on a dip at $80.50. I am raising our stop loss to $79.00.

Our first target to take profits is at $88.50. Our second and final target is $92.50.

Picked on   August 24 at $ 84.33 <- buy half now 8/24/09
                    /originally listed at $83.54, gapped higher @ 84.33
Change since picked:      + 1.80

Picked on   August xx at $ xx.xx <-- TRIGGER @ 80.50 for 2nd half
Change since picked:      + 0.00
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       141 thousand 
Listed on August 24, 2009         


State Street (Bank) STT - close: 54.23 change: +0.93 stop: varies

I am adjusting our entry strategy on STT. I'm lowering our buy-the-dip entry point from $52.50 to $52.00. Yet I'm adding a breakout trigger at $55.60, which would be a new high for the year. To clarify:

We have an aggressive breakout trigger at $55.60 and we'll use a stop loss at $51.45. Our first target is $59.80. This is an aggressive entry so I'm suggesting smaller position sizes at least 1/2 to 1/4 our normal trade.

We also have a buy the dip entry point at $52.00 with a stop loss at $48.90. Our first target is $55.00. Our second target is $59.80. Currently the Point & Figure chart is bullish with a $62 target.

Picked on   August xx at $ xx.xx <-- TRIGGER 52.00 or 55.60
Change since picked:      + 0.00
Earnings Date           10/13/09 (unconfirmed)
Average Daily Volume =       5.3 million  
Listed on August 19, 2009         


U.S. Oil Fund - USO - close: 37.17 change: -1.13 stop: 33.99

Crude oil futures are struggling with heavy resistance at $75.00. Oil hit $74.96 and reversed falling 3.3% on the day. Our plan is to buy calls on the USO on a dip at $36.00. More conservative traders may want to wait for a dip closer to the trendline of higher lows and its 50-dma near $34.40. I'm adjusting our stop loss to $33.99. If triggered at $36.00 our first target to take profits is $39.75.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 36.00 
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =      11.5 million  
Listed on August 15, 2009         


PUT Play Updates

First Solar - FSLR - close: 128.18 chg: +4.10 stop: 141.50

FSLR is finally mounting a decent oversold bounce. The stock gained 3.3%. I would expect a bounce toward its 10-dma near $133.00-134.00 or resistance near $140. More conservative traders may want to exit early than endure that kind of volatility. I am not suggesting new bearish positions at this time. FSLR has already hit our first target at $122.50. Our second and final target is $111.00.

Picked on   August 17 at $135.88 *triggered/gap down entry
Change since picked:      - 7.70
                               /1st target hit @ 122.50 (-9.8%)
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       3.5 million  
Listed on August 15, 2009         


Marvel Entertainment - MVL - close: 38.64 change: +0.37 stop: 39.05

I am not suggesting new positions at this time. Wait for a new drop under $38.00 to launch new put plays. Our target is $34.10.

Picked on   August 17 at $ 37.90 *triggered         
Change since picked:      + 0.74
Earnings Date           11/04/09 (unconfirmed)
Average Daily Volume =       710 thousand 
Listed on August 10, 2009         


Shanda Interactive - SNDA - close: 47.97 chg: -0.78 stop: 50.75

SNDA slowly drifted lower on Tuesday closing with a 1.6% decline. Volume was pretty light so it's hard to put much confidence behind this move. More conservative traders may want to ratchet down their stops closer to the $50.00 level. Our target is the $41.50-40.00 zone. Remember, SNDA is a volatile stock and readers may want to use smaller position sizes.

Picked on   August 08 at $ 48.10 /gap higher entry
                               /originally listed at $47.83
Change since picked:      - 0.13
Earnings Date           09/01/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 08, 2009         


Strangle & Spread Play Updates

(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.)

Schlumberger - SLB - close: 56.13 change: -1.21 stop: n/a

SLB rallied again with the strength in oil this morning but gave up a good chunk of its gains. I am not suggesting new positions at this time.

The options we suggested were the September $60.00 calls (SLB-IL) and the September $45.00 puts (SLB-UI). Our estimated cost is $1.00 and we want to sell if either option hits $2.50 or higher.

Picked on   August 15 at $ 52.00 /gap down entry Aug. 17th
Change since picked:      + 4.13
Earnings Date           10/15/09 (unconfirmed)
Average Daily Volume =       9.2 million  
Listed on August 15, 2009