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AHC None

New Calls

Amerada Hess - AHC - close: 89.41 chg: +1.36 stop: 86.25

Company Description:
Amerada Hess, headquartered in New York, is a global integrated energy company engaged in the exploration for and the production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. (source: company press release)

Why We Like It:
Crude oil has spent the last few days trying to build a base above technical support at its 200-dma. That has given oil stocks a chance to bounce from the bottom of their descending channels. The OSX oil services index is doing just that - bouncing from the bottom of its descending channel. We see a similar pattern in AHC but AHC's rebound is off both the bottom of its channel and near technical support at its 200-dma's. Plus, AHC's candlestick chart is showing a three-day bullish reversal pattern. This is purely a trading bounce play. We are looking for AHC to rally back toward the top of its channel in the $94-95 range. We're willing to go long at current levels. More conservative traders may want to wait for AHC to trade above the $90.00 mark, which could act as round-number resistance. Our time frame is probably less than two-weeks.

Suggested Options:
We're going to suggest the June calls.

BUY CALL JUN 85 AHC-FQ OI=213 current ask $6.00
BUY CALL JUN 90 AHC-FR OI=423 current ask $2.90
BUY CALL JUN 95 AHC-FS OI=460 current ask $1.20

Picked on May 17 at $ 89.41
Change since picked: + 0.00
Earnings Date 07/27/05 (unconfirmed)
Average Daily Volume = 1.6 million 


Federated Dept Stores - FD - cls: 66.60 chg: +1.64 stop: 62.49

Company Description:
Federated, with corporate offices in Cincinnati and New York, is one of the nation's leading department store retailers, with annual sales of more than $15.6 billion. Federated operates more than 450 stores in 34 states, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates macys.com and Bloomingdale's By Mail. (source: company press release)

Why We Like It:
A string of positive earnings results from the retail sector today have inspired new strength in the group. We're suggesting FD as a momentum play given today's high-volume bullish breakout over resistance at the $65.00 level. Volume on today's breakout was well above the average. The move also produced a new P&F buy signal that points to an $88 target. We're only targeting a short-term move toward the $70.00 level, which could be round-number resistance. Readers can choose to go long at current levels or look for a possible dip back toward the $65.00 region, which should now act as new support. More aggressive players can put their stop loss under the $62 level, which is clear support. More conservative traders may want to tighten their stops close to the $64 region. We're placing ours at $62.49.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 65.00 FD-FM OI=1563 current ask $3.30
BUY CALL JUN 70.00 FD-FN OI= 204 current ask $0.95

Picked on May 17 at $ 66.60
Change since picked: + 0.00
Earnings Date 05/11/05 (confirmed)
Average Daily Volume = 2.9 million 

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