Option Investor
New Plays

New Option Plays

HAVING TROUBLE PRINTING?
Printer friendly version
Call Options Plays
Put Options Plays
APC None

New Calls

Anadarko Petroleum - APC - cls: 76.10 chg: +2.05 stop: 72.45

Company Description:
Anadarko Petroleum Corporation's mission is to deliver a competitive and sustainable rate of return to shareholders by developing, acquiring and exploring for oil and gas resources vital to the world's health and welfare. As of year-end 2004, the company had 2.37 billion BOE of proved reserves, making it one of the world's largest independent exploration and production companies. Anadarko's operational focus extends from the deepwater Gulf of Mexico, up through Texas, Louisiana, the Mid-Continent, western U.S. and Canadian Rockies and onto the North Slope of Alaska. Anadarko also has significant production in Algeria, Venezuela and Qatar, and exploration or production positions in several other countries. (source: company website)

Why We Like It:
Here we go again. It looks like the consolidation in the oil stocks over the last three to four weeks may be ending. Comments from Goldman Sachs and their forecast for triple-digit oil in the next few years could easily rekindle the fire under oil-related equities. There are plenty of oil stocks that are starting to look tempting for another trading rally but we're going to step carefully and only add one today. We will be looking at the holders, indices and ishares for potential plays this weekend. We like APC because the stock is producing a nice bounce from support near the $72.00 level (see chart). The bounce actually produced a hammer candlestick pattern and at the end of a bearish trend tends to signal a possible bullish reversal and today's gain was the follow through on that pattern. The stock has also broken through its three-week trendline of lower highs. The MACD indicator is suggesting a new buy signal soon and the RSI and stochastics are already turning positive. It is true that the P&F chart is bearish but the stock could trade up to the $81 level before producing a new buy signal. Our target is the $81.50 region - just under the early March resistance at $82.00. We will plan to exit this play before APC's late April earnings report.

Suggested Options:
We are suggesting the May calls even though we plan to exit near the end of April to avoid earnings.

BUY CALL MAY 75.00 APC-EO OI=4191 current ask $4.40
BUY CALL MAY 80.00 APC-EP OI=3898 current ask $2.25

Picked on March 31 at $ 76.10
Change since picked: + 0.00
Earnings Date 04/29/05 (unconfirmed)
Average Daily Volume = 2.3 million

 

New Puts

None today.

New Play Archives