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RIMM SBUX

New Calls

Research In Motion - RIMM - cls: 77.22 chg: 2.16 stop: 72.49

Company Description:
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, Internet and intranet-based applications. RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity to data. RIM's portfolio of award-winning products, services and embedded technologies are used by thousands of organizations around the world and include the BlackBerry wireless platform, the RIM Wireless Handheld(TM) product line, software development tools, radio-modems and software/hardware licensing agreements. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe and Asia Pacific. (source: company press release)

Why We Like It:
RIMM has turned out a surprising show of strength in spite of a mixed earnings report on April 5th. The company came in light on revenues but beat Wall Street estimates by 6 cents. Analysts are in disagreement with some offering positive comments and others downgrading RIMM. We suspect that RIMM could surprise traders to the upside but currently shares are testing overhead resistance near $78.00 and its simple 100-dma. Our plan, which should be considered a higher-risk strategy, is to use a trigger at $78.25. By waiting for RIMM to trade over the $78.00 level it will reverse its P&F chart sell signal into a new buy signal. Our short-term target will be the $84-85 range. Remember, this is an aggressive play. RIMM could easily be tossed around by any volatility in the NASDAQ as we enter earnings season.

Suggested Options:
We are suggesting the May calls.

BUY CALL MAY 75.00 RUP-EO OI=3724 current ask $6.20
BUY CALL MAY 80.00 RUP-EP OI=4540 current ask $3.80

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 04/05/05 (confirmed)
Average Daily Volume = 10.1 million
 

New Puts

Starbucks - SBUX - close: 48.62 chg: -1.88 stop: 51.75

Company Description:
Starbucks Corporation is the leading retailer, roaster and brand of specialty coffee in the world, with more than 9,000 retail locations in North America, Latin America, Europe, the Middle East and the Pacific Rim. The Company is committed to offering the highest quality coffee and the Starbucks Experience while conducting its business in ways that produce social, environmental and economic benefits for communities in which it does business. In addition to its retail operations, the Company produces and sells bottled Frappuccino coffee drinks, Starbucks DoubleShot coffee drink, and a line of superpremium ice creams through its joint venture partnerships. The Company's brand portfolio provides a wide variety of consumer products. Tazo Tea's line of innovative superpremium teas and Hear Music's exceptional compact discs enhance the Starbucks Experience through best-of-class products. The Seattle's Best Coffee and Torrefazione Italia Coffee brands enable Starbucks to appeal to a broader consumer base by offering an alternative variety of coffee flavor profiles. (source: company press release)

Why We Like It:
Looks like SBUX's stock is going a bit stale. On Thursday the stock gapped lower under the simple 200-dma after reporting March same-store sales that were lower than expected. Volume on Thursday's decline was pretty heavy. To make matters worse Friday produced a 3.7 percent decline on heavy volume, which confirms the technical breakdown from Thursday only this time SBUX has broken the $50.00 mark and its exponential 200-dma. Friday's decline also helped produced a new sell signal in the P&F chart with a $42.00 target. Furthermore Friday's decline also put SBUX under support near the $49.00 level from the month of February. We believe that SBUX will continue lower and we're targeting a drop into the $45.00-44.00 range. The challenge for option traders is that we do not want to hold over SBUX's April 27th earnings report. That gives us about 2 1/2 weeks.

Suggested Options:
We are suggesting the May puts

BUY PUT MAY 50.00 SQX-QJ OI=6152 current ask $2.75
BUY PUT MAY 47.50 SQX-QT OI=2869 current ask $1.50
BUY PUT MAY 45.00 SQZ-QI OI= 490 current ask $0.80

Picked on April 10 at $ 48.62
Change since picked: - 0.00
Earnings Date 04/27/05 (confirmed)
Average Daily Volume = 4.3 million
 

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