Option Investor
New Plays

New Option Plays

Printer friendly version
Call Options Plays
Put Options Plays
TK None

New Calls

Teekay Shipping - TK - close: 44.21 chg: +0.96 stop: 42.45

Company Description:
Teekay Shipping Corporation transports more than 10 percent of the world's sea-borne oil and has recently expanded into the liquefied natural gas shipping sector. With a fleet of approximately 145 tankers, offices in 14 countries and approximately 5,500 seagoing and shore-based employees, Teekay Shipping Corporation provides a comprehensive set of marine services to the world's leading oil and gas companies, helping them seamlessly link their upstream energy production to their downstream processing operations. Teekay's reputation for safety, quality and innovation has earned it a position with its customers as a premier marine midstream company. (source: company press release)

Why We Like It:
Crude oil has turned in a strong week with a rise to $55 a barrel. This is not only fueling bullish breakouts in the oil stocks but in the oil tankers as well. Shares of TK bucked the market decline on Friday and broke out over its three-month trendline of lower highs. The stock also pushed past its simple 50-dma and closed right on its 200-dma. Thanks to a recent WSJ article, it's widely known that many of the tanker stocks are targets for the bears due to a seasonal slow down during the summer months and new tankers coming online increasing supply. This scenario may hold true normally but the rising price of crude has meant stronger profits for the industry. We like the bullish breakout on Friday but we want to see some confirmation. We'll suggest a trigger above round-number resistance at the $45.00 mark. Our entry point will be $45.05. Our target is the $49.50-50.00 range. More aggressive traders might want to look for a dip back toward the $43.00 region as an entry point.

Suggested Options:
We are suggesting the July calls.

BUY CALL JUL 40.00 TK-GH OI=2433 current ask $5.00
BUY CALL JUL 45.00 TK-GI OI=5440 current ask $1.75
BUY CALL JUL 50.00 TK-GJ OI=3661 current ask $0.40

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/20/05 (unconfirmed)
Average Daily Volume = 681 thousand


Wellpoint Inc - WLP - close: 68.40 chg: +0.76 stop: 64.90

Company Description:
WellPoint, Inc. is the largest publicly traded commercial health benefits company in terms of membership in the United States. WellPoint, Inc. is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), Wisconsin; and through HealthLink and UniCare. (source: company press release)

Why We Like It:
Given the rising cost of healthcare it's no wonder that health insurance stocks have been out performing for a long time. That trend continues today. A number of health insurers bucked the market decline on Friday. WLP was one of them with a breakout to another new all-time high after a four-week sideways consolidation (and a 2-for-1 stock split). While it might seem odd going long a stock at its highs if we're expecting the market to pull back a bit we do like WLP's relative strength. If WLP does pull back we can use it as a bullish entry point. While we're willing to go long at current levels, you, the reader, can choose to wait for a possible dip in WLP. If so the first level of support looks like the $66.00 region but we're going to give WLP a very wide stop at $64.90, since the $65 level would be round-number support. Our target is the $74-75 range before its late July earnings report. Other health insurance stocks we like and are considering as potential plays are Cigna (CI) and Aetna (AET).

Suggested Options:
We are suggesting the July calls.

BUY CALL JUL 65.00 WLP-GM OI= 56 current ask $4.80
BUY CALL JUL 70.00 WLP-GN OI=248 current ask $1.70

Picked on June 05 at $ 68.40
Change since picked: + 0.00
Earnings Date 07/27/05 (unconfirmed)
Average Daily Volume = 3.5 million

New Puts

None today.

New Play Archives