Option Investor
New Plays

Metals, Oil and Financials

HAVING TROUBLE PRINTING?
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Play Editor's Note: The market delivered some surprising strength on election day. It is conceivable that stocks might see an post-election pop. If you're a nimble enough trader I'd consider shorting such a pop. My plan is to buy a dip. It may not be tomorrow but it should occur in the next few days.

FYI: I would keep an eye on X, XTO and YHOO as potential buy the dip plays.


NEW BULLISH Plays

Alcoa Inc. - AA - close: 12.47 change: +0.59 stop: 10.45

Why We Like It:
It looks like many of the metal and mining stocks have bottomed. Shares of AA displayed some strength today but we don't want to chase the rally. We're suggesting readers buy the stock on a dip into the $11.50-11.00 zone. We'll start with a stop loss at $10.45. If triggered our target is $14.85.

Annotated chart:
AA

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          01/08/09 (unconfirmed)    
Average Daily Volume:      24.2 million     


Nat. Oilwell - NOV - close: 32.92 change: +3.21 stop: 27.25

Why We Like It:
Oil service stocks have produced an impressive rebound off their lows and it could easily continue if oil prices rebound further. We don't want to open positions now. The plan is to buy a dip in the $29.50-29.00 zone. More aggressive traders may want to jump in early around $30.00. If triggered our first target is $34.50. Our second target is $39.00. The Point & Figure chart has turned bullish with a $54 target.

Annotated chart:
NOV

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          02/05/09 (unconfirmed)    
Average Daily Volume:      13.5 million     


Ultra Financials ProShares - UYG - cls: 10.94 chg: +0.70 stop: 9.25

Why We Like It:
It looks like the financials have built a bullish double bottom with the lows in October. The sector is up sharply in the last week and a half. We want to see a minor correction before opening bullish positions. Our suggested entry point is a dip in the $9.85-9.65 zone. We'll start with a stop loss at $9.25. If triggered our first target is $12.40. Our secondary target is $14.40.

FYI: The Ultra Financials ProShares is an exchange traded fund (ETF) that typically moves twice the daily performance of the Dow Jones Financial index.

Annotated chart:
UYG

Picked on November xx at $xx.xx <-- see TRIGGER  
Change since picked:     + 0.00   			
Earnings Date          00/00/00 
Average Daily Volume:       114 million     


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