New Plays, Thursday, 02/10/2005
New Option Plays
by OI Staff
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Call Options Plays
Put Options Plays
| EBAY|| NONE|
eBay Inc - EBAY - close: 81.22 chg: +2.23 stop: 76.94
eBay is The World's Online Marketplace.. Founded in 1995, eBay created a powerful platform for the sale of goods and services by a passionate community of individuals and businesses. On any given day, there are millions of items across thousands of categories for sale on eBay. eBay enables trade on a local, national and international basis with customized sites in markets around the world. Through an array of services, such as its payment solution provider PayPal, eBay is enabling global e-commerce for an ever-growing online community. (source: company website)
Why We Like It:
Investors have finally decided to step back in and test the waters with EBAY. The company held its 2005 strategy conference today and the comments were positive. President and CEO Meg Whitman was quoted as saying, "eBay's potential for growth is greater today than it has ever been... we are extremely confident in the future." EBAY suffered a morning dip but traders quickly jumped at the opportunity and the stock rallied back over the $80 level to help confirm yesterday's new buy signal in its MACD indicator. Short-term technical oscillators like the RSI and stochastics are also positive. If you believe in P&F charts then this bullish play would be considered aggressive as we're fighting a pretty bearish P&F sell signal. We believe that if the markets can tread higher or even churn sideways then EBAY is likely to produce an overdue oversold bounce back toward the $87.50 region, which we'll use as a target.
This is likely to be a short-term four-to-six-week play. We're suggesting the March calls.
BUY CALL MAR 75 XBA-CO OI= 6841 current ask $8.00
BUY CALL MAR 80 XBA-CP OI= 8970 current ask $4.70
BUY CALL MAR 85 XBA-CQ OI=14743 current ask $2.45
Picked on February 10 at $ 81.22
Change since picked: + 0.00
Earnings Date 01/19/05 (confirmed)
Average Daily Volume = 13.8 million