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DO - $75.84 - Diamond Offshore

Diamond took one last dip to support at $70 on Tuesday and triggered our entry into the position just before a very strong rebound. Resistance at $74 was broken by the news on RIG.

I am recommending an insurance put because of my outlook on oil prices over the next 60 days. If we get lucky we could recover a substantial portion of our LEAP premium.

Insurance Put:
Buy October $70 put DO-VN currently $1.65


Company Info:

Diamond Offshore Drilling Inc. (Diamond Offshore) provides contract drilling services to the energy industry worldwide and is also engaged in deepwater drilling with a fleet of 44 offshore drilling rigs. The Company's fleet consists of 30 semisubmersibles, 13 jack-ups and one drillship. The Company's offers a range of services worldwide in various markets, including the deep water, harsh environment, conventional semisubmersible and jack-up markets. The Company provides offshore drilling services to a customer base that includes private and independent oil and gas companies and government-owned oil companies.

Breakdown target triggered @ $70 (8/29)
Position: 2009 $80 LEAP Call VCT-AP @ 14.20

CSX - $30.38 - CSX Corp

The railroads saw their busiest intermodal week in history the last week of July when it shipped 251,000 trailers and containers. Analysts expect that record to be broken several times over the next several weeks as the railroads ramp up for a surge in traffic. New cars, new track, new customers and a growing load of energy products are adding up to record results. Falling diesel prices will also reduce pressure on profits. I consider CSX as the premier railroad stock and I would hope over the next two years to see some major new highs.

Company Info:

CSX Corporation (CSX) based in Jacksonville, Florida, owns companies providing rail, intermodal and rail-to-truck transload services that combine to form transportation companies, connecting more than 70 ocean, river and lake ports. CSX's principal operating company, CSX Transportation Inc. (CSXT), operates the railroad in the eastern United States with approximately 21,000-mile rail network linking commercial markets in 23 states, the District of Columbia, and the Canadian provinces of Ontario and Quebec. CSX Intermodal Inc. (Intermodal) is a coast-to-coast intermodal transportation provider, an integrated intermodal company serving customers from origin to destination with its own truck and terminal operations, plus a dedicated domestic container fleet. Containers and trailers are loaded and unloaded from trains, with trucks providing the link between intermodal terminals and the customer.

Buy 2009 $35 LEAP Call OBC-AG currently $4.90

Entry (9/03)

 

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