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New Option Plays

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Call Options Plays
Put Options Plays
None IXC
  PLCE
  WC

New Calls

None today.
 

New Puts

Ishares Global Energy - IXC - cls: 89.15 chg: -1.79 stop: 91.61

Company Description:
This is the Ishares S&P Global Energy Sector index fund.

Why We Like It:
Oil and oil stocks have been big winners over the last several weeks and they are overdue for a consolidation lower. Nothing goes straight up so it looks like it may be time for some profit taking here. News that hurricane Emily may not threaten the U.S. oil infrastructure in the Gulf of Mexico is contributing to the decline in oil today. However, probably the bigger news was the unexpected decline in China's oil consumption. We are longer-term bullish on oil but that doesn't mean we can't try and scalp some points on the pull backs. This is a very speculative, high-risk play. The IXC does not trade the normal amount of volume we suggest for an underlying equity and the option volumes are also very, very low. Trade with high-risk capital only! We are going to try and keep our risk low with a tight stop at $91.61 just above all-time highs. Our target is the $85.25-85.00 region or the 50-dma (84.03), whichever the IXC hits first. FYI: a 38.2 percent Fibonacci retracement of the May to July run up would be near $85.40.

Suggested Options:
We expect this to be a short-term play so we're suggesting the August puts.

BUY PUT AUG 90.00 IXC-TR OI= 0 current ask $2.65
BUY PUT AUG 85.00 IXC-TG OI= 0 current ask $0.95

Picked on July 14 at $ 89.15
Change since picked: - 0.00
Earnings Date 00/00/00
Average Daily Volume = 33 thousand

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Children's Place - PLCE - cls: 45.80 chg: -2.05 stop: 47.51

Company Description:
The Children's Place Retail Stores, Inc., is a leading specialty retailer of children's merchandise. The Company designs, contracts to manufacture and sells high-quality, value-priced merchandise under the proprietary "The Children's Place" and licensed "Disney Store" brand names. As of July 2, 2005, the Company owned and operated 761 The Children's Place stores and 307 Disney Stores in North America and its online store, www.childrensplace.com. (source: company press release or website)

Why We Like It:
The action in PLCE has been trending lower under a pattern of lower highs for the past four weeks. Today's decline of 4.2 percent came on above average volume and pushed the stock to a new six-week low. PLCE still has technical support at the 100-dma (45.29) and round-number support at the $45.00 mark. However, if PLCE can drop below the $45.00 level it will produce a new triple-bottom breakdown sell signal on its Point & Figure chart. We are suggesting that traders use a trigger under the $45.00 mark to catch any breakdown. Our suggested entry point will be $44.90. Our target is the $40.00 region and/or the simple 200-dma. We'll use a range of $40.50-40.00. We do not plan on holding past PLCE's August earnings report.

Suggested Options:
We are suggesting the August puts although September strikes are available.

BUY PUT AUG 50.00 TUY-TJ OI= 20 current ask $5.00
BUY PUT AUG 45.00 TUY-TI OI=242 current ask $1.90
BUY PUT AUG 40.00 TUY-TH OI= 30 current ask $0.50

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/11/05 (unconfirmed)
Average Daily Volume = 775 thousand

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Wellchoice - WC - close: 69.46 chg: -1.23 stop: 72.51

Company Description:
WellChoice, Inc. is the parent company of the largest health insurer in the State of New York, based on PPO and HMO membership. WellChoice, through its Empire Blue Cross Blue Shield subsidiaries, has the exclusive right to use the Blue Cross and Blue Shield names and marks in 10 downstate New York counties and one or both of these names and marks in selected counties in upstate New York. WellChoice offers a broad portfolio of products, including managed care and traditional indemnity products, and has a varied customer base including large group, middle-market and small group, individual, and national accounts. (source: company press release or website)

Why We Like It:
Are you ready to roll the dice. That's normally how we feel when trying to pick a top on such a strong stock. WC has been a huge winner the past six weeks. The major stock averages look overbought and extended and due for a pull back. Shares of WC are also overbought, extended and due for a pull back. What we are doing here is speculation that the recent weakness in WC and its drop back below the $70.00 mark and its simple 10-dma, which has been support for the past month, is the beginning of a short-term consolidation. Looking at the daily chart the next level of support looks like the $65.00 level or the 50-dma near $63. We're going to aim for the $65.50-65.00 range. To be honest some traders would equate this to gambling. We certainly don't suggest traders trying to call the top on such a strong stock. The last time WC broke down under its 10-dma after a big run up shares went sideways, not lower. However, if you're a technical trader it's hard not to see the big MACD sell signal and the bearish tint to the RSI and stochastics.

Suggested Options:
We are suggesting the August puts since we expect this to be a short-term play.

BUY PUT AUG 70.00 WC-TN OI= 32 current ask $2.30
BUY PUT AUG 65.00 WC-TM OI= 5 current ask $0.55

Picked on July 14 at $ 69.46
Change since picked: + 0.00
Earnings Date 08/03/05 (confirmed)
Average Daily Volume = 268 thousand
 

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