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LTR None
NCX  

New Calls

Loews Corp - LTR - close: 74.15 chg: +2.35 stop: 69.95

Company Description:
Loews Corp is a holding corporation with a diversified group of companies in its stable. The group ranges from insurer CNA financial, to cigarette maker Lorillard, to Loews hotels, to majority owned Diamond Offshore drilling.

Why We Like It:
This is a bullish breakout play. LTR has lagged some of its peers in the insurance sector, probably due to LTR's diversified holdings. Today's breakout over resistance in the $72.00-72.50 range pushed through its old highs from May 2001 to close at new all-time highs. Technicals are positive and its P&F chart shows a new triple-top breakout buy signal with a $102 target. We like the relative strength and suspect that LTR can trade toward the $80 level over the next four to six weeks. Our concerns would be centered around a potential pull back in the major market averages and/or the IUX insurance index, which is looking a little overbought. Our suggestion would be to wait for a dip back toward the $72.00 level and buy the bounce.

Suggested Options:
We have a four-to-six week time horizon so we're suggesting the March or June calls.

BUY CALL MAR 70 LTR-CN OI=297 current ask $4.50
BUY CALL MAR 75 LTR-CO OI=218 current ask $1.10

BUY CALL JUN 75 LTR-FO OI= 96 current ask $2.70


 

Picked on February 15 at $ 74.15
Change since picked: + 0.00
Earnings Date 02/10/05 (confirmed)
Average Daily Volume = 452 thousand

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Nova Chemicals - NCX - close: 47.15 chg: +0.72 stop: 44.95

Company Description:
NOVA Chemicals produces commodity plastics and chemicals that are essential to everyday life. Our employees develop and manufacture materials for customers worldwide who produce consumer, industrial and packaging products. We work with a commitment to Responsible Care. to ensure effective health, safety, security and environmental stewardship. (source: company press release)

Why We Like It:
Bank of America came out with some positive comments on the chemicals and commodity sectors today. That helped give shares of chemical maker NCX a boost over the $47 level on volume wella above average. Given the growing economy NCX was a huge winner in 2004 but has spent the last 2 1/2 months consolidating those gains. Now shares look poised to breakout to new highs with the MACD showing a new buy signal and its RSI and stochastics also in bullish signals. Looking at the P&F chart you'll notice that NCX is consolidating under resistance at the $48 level. A breakout there would produce a new quadruple-top breakout buy signal, a powerful pattern to play in a bullish market. Therefore we want to use a TRIGGER at $48.01 to open the play. Until then we'll sit on the sidelines waiting. Once triggered our target will be the $52.50-54.00 range. Keep in mind that if the major indices turn south we would strongly hesitate to open any new bullish positions anywhere.

Suggested Options:
We're going to suggest the March and June calls. Our favorites would be the June strikes.

BUY CALL MAR 45 NCX-CI OI=493 current ask $3.20
BUY CALL MAR 50 NCX-CJ OI=232 current ask $0.55

BUY CALL JUN 45 NCX-FI OI= 76 current ask $4.50
BUY CALL JUN 50 NCX-FJ OI=142 current ask $2.00


 

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/26/05 (confirmed)
Average Daily Volume = 383 thousand

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