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New Plays

New Option Plays

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Call Options Plays
Put Options Plays
CB None
EXP  
OXY  
TOT  

New Calls

Chubb Corp - CB - close: 84.95 change: +1.32 stop: 82.49

Company Description:
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:
Insurance stocks have been a pocket of strength in the markets lately and CB has not been left behind. The stock has been consolidating its late April breakout over the last five weeks and now looks poised to breakout over resistance at the $85.00 level. The Point & Figure chart shows a bullish catapult breakout pattern that points to a $107 target. We're not that optimistic. Instead we suggest traders use a trigger at $85.05 to catch any breakout over resistance at the $85.00 level. Our short-term target will be the $89.50-90.00 range. We do not plan to hold over the stock's late July earnings report.

Suggested Options:
We are suggesting the July calls but that only gives us about five weeks. More conservative traders may want to consider the October calls.

BUY CALL JUL 80.00 CB-GP OI=1223 current ask $5.30
BUY CALL JUL 85.00 CB-GQ OI= 989 current ask $1.60
BUY CALL JUL 90.00 CB-GR OI= 267 current ask $0.25

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/05 (unconfirmed)
Average Daily Volume = 1.2 million

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Eagle Materials - EXP - close: 90.45 chg: +1.92 stop: 86.95

Company Description:
Eagle Materials Inc. is a Dallas-based company that manufactures and distributes Cement, Gypsum Wallboard, Recycled Paperboard, Concrete and Aggregates. (source: company press release)

Why We Like It:
A bear could easily argue that EXP is looking a bit overbought and extended here but as a bullish momentum play the stock is showing lots of strength. The company must be doing plenty of business given the current homebuilding boom. We like how EXP broke through resistance near the $87.00 level and then pulled back to retest broken resistance at $87 as new support. The fact that the stock and the options tend to have lower volume than we like makes this a bit more aggressive for us. Traders need to keep that in mind. The P&F chart looks very bullish as it points to a $124.00 price target. We're going to suggest buying calls at current levels and target a move in the stock toward the $97-99 range.

Suggested Options:
We are suggesting the October calls although July strikes are available.

BUY CALL OCT 85.00 EXP-JQ OI= 65 current ask $9.00
BUY CALL OCT 90.00 EXP-JR OI=252 current ask $5.70
BUY CALL OCT 95.00 EXP-JS OI= 20 current ask $3.80

Picked on June 09 at $ 90.45
Change since picked: + 0.00
Earnings Date 08/03/05 (unconfirmed)
Average Daily Volume = 134 thousand

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Occidental Petrol. - OXY - close: 75.51 chg: +2.12 stop: 71.95

Company Description:
Occidental Petroleum Corporation is a world leader in oil and natural gas exploration and production and a major North American chemical manufacturer. (source: company press release)

Why We Like It:
We like how the oil sectors have pushed through resistance at the top of their descending channels and the group could be set for another leg higher just as the summer driving season is upon us. With that in mind we are drawn to OXY who is a relative strength leader in the sector. Shares are trading very close to new all-time highs here over resistance at the $75.00 level. Again, bears could argue that OXY looks overbought but given the stock's history and current out performance we're willing to buy the breakout with a stop loss under the recent low. The P&F chart shows a double-top breakout buy signal that points to a $98 target. We would go long here at current levels with a short-term target in the $79.75-80.50 range. Depending on your risk profile traders can watch OXY for a pull back into the $73-74 range as a new entry point or wait for shares to trade back over the $76.00 level before initiating new positions.

Suggested Options:
We are going to suggest the August calls although July strikes are available.

BUY CALL AUG 70.00 OXY-HN OI=7387 current ask $7.40
BUY CALL AUG 75.00 OXY-HO OI=4966 current ask $4.10
BUY CALL AUG 80.00 OXY-HP OI=6791 current ask $1.90

Picked on June 09 at $ 75.51
Change since picked: + 0.00
Earnings Date 07/26/05 (unconfirmed)
Average Daily Volume = 2.7 million

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Total S.A. - TOT - close: 114.00 chg: +1.21 stop: 110.95

Company Description:
Total is a leading multinational energy company with 111, 401 employees* and operations in more than 130 countries. Together with its subsidiaries and affiliates, Total is the fourth largest publicly-traded oil and gas integrated company in the world**. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to the gas downstream (including power generation), transportation, refining, petroleum product marketing, and international crude oil and product trading. Total is also a world-class chemicals manufacturer. (source: company press release)

Why We Like It:
If you like the oil sector but you don't feel like chasing a new high in the case of our new OXY play then consider TOT as a potential bullish candidate. Like the oil-related sector indices shares of TOT have broken through resistance at the top of its descending channel. The stock has also broken through technical resistance at its 50-dma and 100-dma. We also like its bullish P&F chart, which currently points to a $139.00 target. We are willing to initiate bullish option positions at current levels but traders have a choice. You could look for a possible dip back toward the $112.00 level and buy a bounce. Or you could wait for TOT to clear what looks like minor resistance in the $114.50 to 115.00 range. Our target is the $119.50-120.00 region.

Suggested Options:
We are suggesting the August calls.

BUY CALL AUG 110.00 TOT-HB OI=113 current ask $6.40
BUY CALL AUG 115.00 TOT-HC OI= 94 current ask $3.30
BUY CALL AUG 120.00 TOT-HD OI=206 current ask $1.50

Picked on June 09 at $114.00
Change since picked: + 0.00
Earnings Date 08/04/05 (unconfirmed)
Average Daily Volume = 857 thousand
 

New Puts

None today.
 

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