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SUN - $79.70 Sunoco Inc ** Stop loss $74.00 **

The chart on Sunoco appears highly overbought but damage to the refinery system has put an entirely new spin on the outlook for the remaining refiners. Sunoco is on the verge of breaking out over the $80 level and that could cause some short covering and a decent spike.

At the time of the recommendation there were no out of the money LEAPs available for SUN so the call was used. I am using a stop loss rather than a protective put.

Company Info:

Sunoco, Inc., headquartered in Philadelphia, PA, is a leading manufacturer and marketer of petroleum and petrochemical products. With 900,000 barrels per day of refining capacity, approximately 4,800 retail sites selling gasoline and convenience items, over 4,300 miles of crude oil and refined product owned and operated pipelines and 38 product terminals, Sunoco is one of the largest independent refiner-marketers in the United States. Sunoco is a significant manufacturer of petrochemicals with annual sales of approximately five billion pounds, largely chemical intermediates used in the fibers, resins and specialties markets. Utilizing a unique, patented technology, Sunoco also currently has the capacity to manufacture over 2.5 million tons annually of high-quality metallurgical-grade coke for use in the steel industry.

Sunoco, Inc. operates through its subsidiaries as a petroleum refiner and marketer, and chemicals manufacturer with interests in logistics and coke making. Sunoco's petroleum refining and marketing operations include the manufacturing and marketing of a range of petroleum products, including fuels, lubricants and some petrochemicals. Sunoco's chemical operations consist of the manufacturing, distribution and marketing of commodity and intermediate petrochemicals. The Company's operations are organized into five business segments: refining and supply, retail marketing, chemicals, logistics and coke.

Feb 2006 $80 CALL SUN-BP @ $6.30
(No out of the money LEAPS at the time)

Entry $77.50 (9/06)


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