New Plays, Saturday, 04/30/2005
New Option Plays
by OI Staff
HAVING TROUBLE PRINTING?
Call Options Plays
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We believe that the current (trading) trend in the markets is down. Yet many
stocks have reached oversold conditions. Friday's rally looks like the beginning
of a short-term oversold bounce. This is not a place where we want to add many
new bullish or bearish plays. We will wait a day or two to see where the bounce
begins to falter before listing new bearish plays.
Corp - CB - close: 81.78 chg: +2.39 stop: 77.49
Founded in 1882, the Chubb Group of Insurance Companies provide property and
casualty insurance for personal and commercial customers worldwide through 8,000
independent agents and brokers. Chubb's global network includes branches and
affiliates throughout North America, Europe, Latin America, Asia and Australia.
(source: company press release)
Why We Like It:
We like CB for
its bullish technical breakout and relative strength. The stock
has been pretty resistance to the market's intermediate down trend and somewhat
resistance to the market's recent volatility. Overall CB has been able to
maintain its bullish trend of higher lows and Friday's gain pushed the stock to
a new four-year high over multiple levels of resistance. The next level of
significant resistance looks like the $90.00 level. Currently the P&F chart has
produced a triple-top breakout
buy signal pointing to a $107 target. We are
suggesting bullish positions with a target in the $88-90 range. More patient
traders may want to see if CB pulls back again toward the $80.50-81.00 region
and buy the dip.
We are suggesting the June calls.
BUY CALL JUN 75 CB-FO OI=172 current ask $7.60
BUY CALL JUN 80 CB-FP OI=450 current ask $3.50
BUY CALL JUN 85 CB-FQ OI=172 current ask $1.00
Picked on May 01 at $ 81.78
Change since picked: + 0.00
Earnings Date 04/25/05 (confirmed)
Average Daily Volume = 1.2 million
None today, see note.