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  GOOG
  NKE

New Calls

None today.
 

New Puts

Fedex Corp - FDX - close: 84.09 chg: -1.43 stop: 86.01

Company Description:
FedEx Corp. provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $29 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 250,000 employees and contractors to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities. (source: company press release or website)

Why We Like It:
We are somewhat surprised by the transportation sector's recent strength with crude oil prices gushing back toward their highs. We understand that the strength in transports has been partially fueled by the positive economic news. Yet we notice that FDX continues to under perform the broad market indices and under perform its peers in the Dow Transports. FDX has failed to breakout over its simple 50-dma near the $86.00 level twice in the past couple of weeks and its technical indicators are turning sour again. Meanwhile its P&F chart is bearish with a $71 target. We are going to suggest that readers use a trigger under $83.00 to open the play. Our entry point will be $82.85. It is true that FDX does have some support at the $80.00 level but if the major indices turn lower into their seasonally weak period in August-September, then FDX could easily breakdown under the $80 mark. Our target will be the $76-75 region.

Suggested Options:
We are suggesting the October puts although Septembers would probably work well too.

BUY PUT OCT 85.00 FDX-VQ OI=1621 current ask $3.20
BUY PUT OCT 80.00 FDX-VP OI=2956 current ask $1.30
BUY PUT OCT 75.00 FDX-VO OI= 704 current ask $0.50

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 09/22/05 (unconfirmed)
Average Daily Volume = 2.0 million

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Google - GOOG - close: 287.76 chg: -5.74 stop: 300.01

Company Description:
Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe, and Asia. (source: company press release or website)

Why We Like It:
Only brave souls need apply. GOOG's rally from $175 to $300 was spectacular and the stock managed to keep climbing as investors got excited about GOOG's Q2 earnings. Now that the earnings news is out we suspect it's time for some profit taking. Granted GOOG has already fallen from $318 to $287 but the decline has produced a new Point & Figure chart sell signal. Currently the DJIA and NASDAQ are looking vulnerable under resistance and they look overbought from their early July gains. Now that the momentum in the broader market has stalled, earnings season is essentially over and we are approaching a seasonally weak period in the markets between August and September (let's not forget to mention record high oil prices) we believe that stocks are poised to consolidate lower. That could prove to be big numbers if GOOG follows through on its P&F sell signal. Granted last time GOOG produced a P&F sell signal there wasn't much follow through and bears got stung pretty bad. That's why we label this as a very aggressive, high-risk play. Currently GOOG has broken down under technical support at its 21-dma and price support in the $288-290 region. However, there is still potential support near its 50-dma (286.00) so we are suggesting a trigger to buy puts at $284.50. Our target will be the $255.00-250.00 range, just above its rising 100-dma. We will use a wide stop at $300.01 since GOOG is so volatile.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 290.00 GGD-UR OI=5989 current ask $12.90
BUY PUT SEP 280.00 GGD-UP OI=5703 current ask $ 8.00
BUY PUT SEP 270.00 GOU-UN OI=6808 current ask $ 4.60
BUY PUT SEP 260.00 GOU-UL OI=5950 current ask $ 3.20

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/21/05 (confirmed)
Average Daily Volume = 13.6 million

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Nike Inc - NKE - close: 83.80 chg: -0.70 stop: 85.51

Company Description:
NIKE, Inc. based in Beaverton, Oregon is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly owned Nike subsidiaries include Converse Inc., which designs, markets and distributes athletic footwear, apparel and accessories; Bauer NIKE Hockey Inc., a leading designer and distributor of hockey equipment; Cole Haan, which designs, markets, and distributes fine dress and casual shoes and accessories; Hurley International LLC, which designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories and Exeter Brands Group LLC, which designs and markets athletic footwear and apparel for the value retail channel. (source: company press release or website)

Why We Like It:
The summer rally in NKE stalled back in June and now its daily and weekly technical indicators have all begun to deteriorate. The recent weakness pushed NKE under round-number support at the $85.00 level and technical support at its 50-dma and 200-dma. This also produced a new triple-bottom breakdown sell signal on its P&F chart that now points to a $79 target although we suspect this target will grow (lower). We are going to suggest a trigger to buy puts at $83.39. This is under the recent low and under its simple 100-dma. More conservative traders may want to wait for a decline under its exponential 200-dma. The biggest challenge for the bears is probably going to be the $80.00 level, which should act like round-number support.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 85.00 NKE-UQ OI=600 current ask $3.10
BUY PUT SEP 80.00 NKE-UP OI=518 current ask $1.15

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 09/26/05 (unconfirmed)
Average Daily Volume = 1.5 million
 

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