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Call Options Plays
Put Options Plays
AIG None
CECO
UTX

New Calls

Amer. Intl Group - AIG - close: 53.76 chg: +0.76 stop: 52.49

Company Description:
American International Group, Inc. (AIG) is the world's leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance and AIG American General is a top-ranked life insurer. AIG's global businesses also include retirement services, financial services and asset management. AIG's financial services businesses include aircraft leasing, financial products, trading and market making. AIG's growing global consumer finance business is led in the United States by American General Finance. AIG also has one of the largest U.S. retirement services businesses through AIG SunAmerica and AIG VALIC, and is a leader in asset management for the individual and institutional markets, with specialized investment management capabilities in equities, fixed income, alternative investments and real estate. (source: company press release)

Why We Like It:
This is a little speculative but we suspect that the worse may be behind it for AIG. It is true that NY Attorney General Elliot Spitzer is still investigating the company, as is the FBI. Plus a grand jury is also considering criminal indictments for some of AIG's top employees. Yet the stock's decline from $75 to $50 appears to have stalled. Actually AIG appears to be building a base between the $50 and $55 levels. If AIG can breakout over the $55.00 mark (which would also include its simple 50-dma) then the stock's P&F chart should reverse into a new buy signal. We are going to suggest that traders use a trigger at $55.05 to open the play. If triggered we'll target a move into the $59-60 range. 

Suggested Options:
We are going to suggest the August calls.

BUY CALL AUG 50.00 AIG-HJ OI=11154 current ask $5.70
BUY CALL AUG 55.00 AIG-HK OI=52905 current ask $2.55
BUY CALL AUG 60.00 AIG-HL OI=30501 current ask $0.80

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/09/05 (confirmed)
Average Daily Volume = 15.5 million 

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Career Education - CECO - close: 34.70 chg: +1.25 stop: 32.45

Company Description:
Career Education Corporation (www.careered.com) is one of the largest providers of private, for-profit postsecondary education and has a presence in both on-campus and online education. CEC's Colleges, Schools and Universities Group operates over 80 campuses in the U.S., Canada, France, the United Kingdom and the United Arab Emirates and offers doctoral degree, master's degree, bachelor's degree, associate degree and diploma programs in the career-oriented disciplines of business studies, visual communication and design technologies, health education, information technology, and culinary arts. The Online Education Group operates American InterContinental University Online and Colorado Technical University Online and offers a variety of degrees in information technology, business, visual communication and education. CEC's total student population on April 30, 2005 was approximately 96,700 students. (source: company press release)

Why We Like It:
It looks like investors are doing some bargain shopping. CECO, like AIG, is seeing its share of lawsuits, investigations and shareholder unrest. Yet despite all the negative publicity CECO appears to be turning around. The big bearish reversal candlestick in early May was bought and now the stock is breaking out past its 50-dma and on Friday past its 200-dma. CECO's P&F chart, while bearish, is also showing signs of a bullish reversal. There is risk that more bad news could service or that CECO will not be able to trade past its 100-dma, but now that the major averages are new bullish trends we think this might be one stock that could out perform the broad market. We're suggesting that traders use a trigger at $35.05 to open the play. Our initial target will be the $38.50-39.50 range. More aggressive traders may want to consider buying a dip toward $33.50 if one appears. 

Suggested Options:
We are suggesting the July calls. 

BUY CALL 30.00 CUY-GF OI= 694 current ask $6.00
BUY CALL 35.00 CUY-GG OI=2131 current ask $2.75
BUY CALL 40.00 CUY-GH OI=2149 current ask $0.95

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/05 (confirmed)
Average Daily Volume = 2.5 million 

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United Technologies - UTX - cls: 105.15 chg: +0.15 stop: 102.45

Company Description:
United Technologies Corp., based in Hartford, Connecticut, is a diversified company that provides a broad range of high technology products and support services to the building systems and aerospace industries. (source: company press release)

Why We Like It:
Dow-component UTX recently broke out over round-number resistance at the $105.00 level and is now poised to breakout over the top of its five-month trading range. This diversified industrial stock has been churning sideways for months but the recent market strength is helping pave the way for UTX to hit new highs. The P&F chart looks poised to produce a new triple-top breakout buy signal. We are going to suggest that traders use a trigger at $106.25 to open the play. Our eight-week target is the $114.00-115.00 range. More aggressive traders might want to consider bullish positions now given the intraday bounce off the $104 level on Friday. UTX is due to split 2-for-1 on June 13th. 

Suggested Options:
We are suggesting the August calls. Junes are available.

BUY CALL AUG 100.00 UTX-HT OI=2048 current ask $7.80
BUY CALL AUG 105.00 UTX-HA OI=4218 current ask $4.50
BUY CALL AUG 110.00 UTX-HB OI=1386 current ask $2.05

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/20/05 (confirmed)
Average Daily Volume = 2.0 million 

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