Several companies on our newsletter will be reporting earnings soon. We plan to exit ahead of their earnings announcement.


CALL Play Updates

Amazon.com - AMZN - close: 95.32 change: -0.69 stop: 92.75

I was expecting more strength out of AMZN given GOOG's results last night but the stock fell this morning as the rest of the market plunged. Overall the stock held up pretty well considering the fact that Wal-Mart (WMT) has just started a price war with AMZN over several new books coming out. WMT wants to be the cheapest online retailer and said they would sell several new books for just $10. AMZN dropped their price to match it. WMT fired back with a new price of just $9 per new book and AMZN has now matched the $9 price.

I'm still bullish here but we're running out of time. AMZN is due to report earnings on Oct. 22nd. If you buy calls on the afternoon bounce then consider a stop loss close to Friday's low of $93.61.

Our first target to take profits is at $99.90. Our second target would be $104.95. I'd aim higher but we want to exit in front of the late October earnings report.

Suggested Options:
Previously I suggested the November calls. We have four days left before we plan to exit this trade.

Annotated Chart:

Picked on   October 08 at $ 95.05
Change since picked:       + 0.27
Earnings Date            10/22/09 (confirmed)
Average Daily Volume =        6.2 million  
Listed on   October 07, 2009         


Apollo Group - APOL - close: 73.98 change: -0.62 stop: 71.90

APOL's trend of higher lows is still in place. Yet I would wait for a new move over $75.00 before considering new bullish positions.

Our first target is $79.90. This should be a short-term play as we plan to exit ahead of the October 27th earnings report. FYI: The Point & Figure chart is bullish with a $95 target.

Suggested Options:
I suggested the November calls with a preference for the $80 strike.

Annotated Chart:

Picked on   October 14 at $ 75.25
Change since picked:       - 1.27
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        2.6 million  
Listed on   October 13, 2009         


AvalonBay - AVB - close: 72.05 change: -2.31 stop: 68.49

We've talked about waiting for a dip near $70.00 to launch new positions. It looks like AVB has started to correct a bit and could hit the $70 area soon. More conservative traders may want to wait for a bounce from the $70 zone before launching positions.

Our first target is $77.75. More aggressive traders could aim higher but we don't want to hold over the early November earnings report.

Suggested Options:
I suggested the November calls with a preference for the $75 strike.

Annotated Chart:

Picked on   October 08 at $ 72.60
Change since picked:       - 0.55
Earnings Date            11/04/09 (unconfirmed)
Average Daily Volume =        1.8 million  
Listed on   October 07, 2009         


Caterpillar - CAT - close: 54.57 change: -0.20 stop: 51.90 *new*

Monday is our last day to hold CAT options. The company reports earnings on Tuesday morning. We're planning to exit at the close on Monday to avoid holding over the announcement. Given our time frame I'm raising the stop loss to $51.90. CAT has already hit our first target at $54.25. I'm lowering our second target to $57.45.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on   October 01 at $ 50.00
Change since picked:       + 4.57
Earnings Date            10/20/09 (confirmed)
Average Daily Volume =         10 million  
Listed on September 19, 2009         


Core Labs - CLB - close: 107.77 change: -1.25 stop: 103.95

Oil has been showing a lot of strength and that fueled some big gains for the oil services last week. We've got three days left for this CLB play. The plan is to exit at the close on Wednesday to avoid holding over earnings.

Look for short-term support at $106 and $104. Our first target to take profit is at $109.90. Our second target is $114.50.

Suggested Options:
No new positions at this time.

Annotated Chart:

Entered on  October 08 at $105.25
Change since picked:       + 2.52
Earnings Date            10/21/09 (confirmed)
Average Daily Volume =        175 thousand 
Listed on September 23, 2009         


Consol Energy - CNX - close: 49.65 change: -1.37 stop: 44.99

Short-term momentum indicators are suggesting the rally in CNX has run out of steam and the next move will be down. I would expect a dip toward $48.00, maybe the $46.00 level. More conservative traders may want to exit completely right now. We only have three days left for CNX. The company reports earnings on October 22nd before the opening bell. That means we need to exit on Wednesday at the closing bell.

CNX has already hit our first target at $48.50. Our second and final target is $54.50.

Suggested Options:
No new plays at this time.

Annotated Chart:

Picked on September 25 at $ 43.77 /gap down entry
Change since picked:       + 5.88
                                /1st target hit @ 48.50 (+10.8%)
Earnings Date            10/22/09 (confirmed)
Average Daily Volume =        3.0 million  
Listed on September 19, 2009         


Dril-Quip, Inc. - DRQ - close: 54.47 change: -0.27 stop: 49.45

DRQ continues to hold over very well. Traders bought the dip this morning before shares even hit the 10-dma. The stock is short-term overbought and I'm not suggesting new positions at this time.

DRQ has already hit our first target at $53.00. Our second target is $57.50. The Point & Figure chart is bullish with a $65.00 target.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on September 28 at $ 48.50
Change since picked:       + 5.97
                              /1st target hit @ 53.00 (+9.2%)
Earnings Date            11/10/09 (unconfirmed)
Average Daily Volume =        282 thousand 
Listed on September 26, 2009         


EOG Resources - EOG - close: 92.81 change: -0.33 stop: 84.90

EOG is another oil stock that's been showing a lot of relative strength. Shares do look overbought and due for a minor correction soon. I'm not suggesting new positions at this time.

EOG has exceeded our first target at $89.90. Our second target is $94.75. We actually have a third target a $99.50 but that might be too optimistic given our time frame. We do not want to hold over the early November earnings report.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on   October 07 at $ 85.24 /gap higher entry
                               /originally listed at $84.71
Change since picked:       + 7.57
                              /1st target hit @ 89.90 (+5.4%)
Earnings Date            11/03/09 (unconfirmed)
Average Daily Volume =        2.9 million  
Listed on   October 07, 2009         


Express Scripts - ESRX - close: 81.35 change: -0.32 stop: 77.75

Broken resistance near $80 acted as new support and traders bought the dip near $80 this morning. The move looks like a new entry point but keep in mind our second target is only $84.95. If you're launching positions now you may want a tighter stop loss.

Suggested Options:
Aggressive traders might want to buy calls on Friday's intraday bounce. We're planning to exit ahead of the late October earnings report.

Annotated Chart:

Picked on   October 06 at $ 77.42 /gap down entry
                              /originally listed at $78.04
Change since picked:       + 3.93
                             /1st target hit @ 82.50 (+6.6%)
Earnings Date            10/28/09 (confirmed)
Average Daily Volume =        2.1 million  
Listed on   October 06, 2009         


Flowserve - FLS - close: 105.01 change: -0.73 stop: 99.45

FLS is holding up pretty well. I'd prefer to launch new positions on a dip (or better yet a bounce) in the $102.50-100.00 area. Our first target is $109.75.

We will plan to exit ahead of the late October earnings report.

Suggested Options:
If FLS provides a new entry point I'd use the November calls.

Annotated Chart:

Picked on   October 12 at $102.60
Change since picked:       + 2.41
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        1.2 million  
Listed on September 19, 2009         


Gold ETF - GLD - close: 103.18 change: +0.32 stop: 97.40

Gold futures managed a minor bounce in spite of a small rebound for the dollar. I'm still expecting a correction toward $100 and that's where I would initiate new positions. Be sure to give yourself enough time for the move to play out. Our plan calls for small positions to limit risk.

Our first target is $109.90. We are still contemplating a second, longer-term target.

Suggested Options:
I am suggesting the November or January 2010 calls. I prefer the November $105s or the January 110s.

Annotated Chart:

Picked on   October 06 at $102.28
Change since picked:       + 0.90
Earnings Date            00/00/00
Average Daily Volume =       14.2 million  
Listed on   October 06, 2009         


Mobile Telesys - MBT - close: 52.59 change: +0.13 stop: 47.90

MBT has been holding on to its gains but shares look like they could dip toward $50. As broken resistance the $50 level should offer new support and I'd use a dip near $50 as a new entry point to buy calls.

Our first target is $54.50. Our second target is $59.00. We do not want to hold positions over the early November earnings report.

Suggested Options:
If MBT provides a new entry point I'd use the November calls with a preference for the $50 strike.

Annotated Chart:

Picked on   October 12 at $ 50.15
Change since picked:       + 2.44
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        1.5 million  
Listed on   October 10, 2009         


Martin Marietta - MLM - close: 94.10 change: +2.70 stop: 91.19

MLM gapped open lower on Friday but bounced back to a 1.1% loss. I don't see any changes from my comments on Thursday night so I'm reposting most of them here:

"MLM looks poised to breakout higher after a two-week consolidation. Shares just bounced from their rising 50-dma but failed to push past the $95.00 level. I'm suggesting a trigger to buy calls at $95.15. We'll use a stop under Thursday's low. Our first target to take profits is at $99.90. More aggressive traders could aim for the September highs."

Suggested Options:
I'm suggesting the November calls. My preference is the $100 strike. We want to exit ahead of the early November earnings report.

BUY CALL NOV 100 MLM-KT open interest= 225 current ask $1.75

Annotated Chart:

Picked on   October xx at $ xx.xx <-- TRIGGER @ 95.15
Change since picked:       + 0.00
Earnings Date            11/06/09 (unconfirmed)
Average Daily Volume =        418 thousand 
Listed on   October 15, 2009         


Precision Cast Parts - PCP - cls: 102.51 change: -0.07 stop: 99.90

Time is almost up. We plan to exit our PCP play on Monday at the closing bell but that's assuming shares don't hit our stop loss at $99.90. The company reports earnings on Tuesday morning. I'm not suggesting new positions. Our target is $109.90.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on   October 12 at $104.05
Change since picked:       - 1.54
Earnings Date            10/20/09 (confirmed)
Average Daily Volume =        1.0 million  
Listed on   October 10, 2009         


Transocean Ltd. - RIG - close: 91.08 change: -0.40 stop: 86.85

RIG held up pretty well. The stock recovered from its gap down on Friday morning and only lost 0.4%. Oil service stocks continue to look strong thanks to a rally in oil. The 10-dma is rising and near $88.99. I'd consider new positions right now but readers could use a dip in the $90-89 zone as a new entry point. Our target is $99.50.

Suggested Options:
I'm suggesting the November calls but we'll plan to exit ahead of the early November earnings report. My preference is the $95 strike.

BUY CALL NOV 95.00 RIG-KS open interest=10208 current ask $2.30

Annotated Chart:

Picked on   October 15 at $ 90.94 /gap down entry
                             /originally listed at $91.48
Change since picked:       + 0.14
Earnings Date            11/04/09 (confirmed)
Average Daily Volume =        4.1 million  
Listed on   October 15, 2009         


Waters Corp. - WAT - close: 57.47 change: -0.80 stop: 54.90

The rally in WAT is losing stream and a few of the short-term technical indicators are suggesting the next move is lower. I would expect a dip toward $56.00, or possibly the 30-dma. I'm not suggesting new positions at this time. The plan was to use small position sizes (1/2 to 1/4 our normal size) to minimize risk.

Our target is $59.50. We do not want to hold over the October 27th earnings report.

Suggested Options:
No new positions at this time.

Annotated Chart:

Picked on September 28 at $ 55.43 *new entry
Change since picked:       + 2.84
Earnings Date            10/27/09 (confirmed)
Average Daily Volume =        809 thousand 
Listed on September 12, 2009         


Whirlpool Corp. - WHR - close: 73.40 change: +0.54 stop: 68.45 *new*

Hmm... looks like I should have made the first target $73.50 and not $73.90. WHR has hit the $73.50 level several times this week but can't quite seem to get past it. We're down to our last four days. WHR reports earnings on Friday morning. The plan is to exit on Thursday at the closing bell (Oct. 22nd). More conservative traders may want to take profits now. The way shares have stalled lately I would expect a dip back toward $70.00. I'm raising our stop loss to $68.45.

We'll keep the first target at $73.90 for now and our second target remains at $78.50.

Suggested Options:
We have four days left. I'm not suggesting new positions.

Annotated Chart:

Picked on   October 10 at $ 70.50
Change since picked:       + 2.90
Earnings Date            10/23/09 (confirmed)
Average Daily Volume =        1.5 million  
Listed on   October 10, 2009         


PUT Play Updates

BIOGEN IDEC - BIIB - close: 49.20 change: -0.59 stop: 52.15

The BTK biotech index looks poised to bounce higher but BIIB is under performing its peers. Shares dove lower this morning but produced an equally sharp rebound. Fortunately the midday bounce failed and shares were starting to reverse into the closing bell.

I remain bearish but readers may want to consider a tighter stop loss closer to $50.50. Earnings are expected Tuesday morning (Oct. 20th). Wall Street is looking for a profit of $1.04 a share. This is a high-risk, aggressive play because we're choosing to hold over the report.

Our first target to take profits is at $44.50. Our second target is $40.50. FYI: The P&F chart is bearish with a $36 target.

Suggested Options:
I'm suggesting the November puts. I'd use the $45 strike to really limit our risk.

BUY PUT NOV 45.00 IDK-WI open interest=3861 current ask $0.60

Annotated Chart:

Picked on   October 03 at $ 48.89
Change since picked:       + 0.31
Earnings Date            10/20/09 (confirmed)
Average Daily Volume =        2.6 million  
Listed on   October 03, 2009         


CLOSED BULLISH PLAYS

iShares Financials - IYF - close: 53.65 change: -1.22 stop: 49.49

A disappointing earnings result from BAC sparked some profit taking in the financials. The IYF gapped open lower at $53.90 and closed with a 2.2% decline. We needed to close the position given our October options.

Chart:

Picked on September 15 at $ 52.60 *triggered  
Change since picked:       + 1.05 <-- exit @ 53.65 (+1.9%)
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


CLOSED STRANGLE & SPREAD PLAYS

Cigna Corp. - CI - close: 28.37 change: -0.56 stop: n/a

The healthcare debate didn't produce as much volatility as we expected. Shares of CI have been churning sideways the last couple of weeks, which didn't help our strategy. Our strangle has expired. The options I suggested were the October $35 calls (CI-JG) and the October $25 puts (CI-VE). Our estimated cost was $1.20.

Chart:

Picked on September 08 at $ 29.40
Change since picked:       - 1.03
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009