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PLAYS TABLE-->
Call Options Plays
Put Options Plays
APA HOV
CCJ  
MO  

New Calls

Apache - APA - close: 73.42 change: +1.32 stop: 69.49

Company Description:
Apache Corporation is a large independent oil and gas company with core operations in the United States, Canada, Egypt, Australia and the United Kingdom sector of the North Sea. (source: company press release or website)

Why We Like It:
APA is breaking out to new all-time highs. The company not only benefits from the rise in crude oil but it also profits from the rocketing price of natural gas. Our readers already know that crude oil will probably remain above historic norms for the foreseeable future as demand overruns supply. The same applies to natural gas as well. U.S. demand significantly out strips supply for natural gas and investors and traders are already concerned that an unusually cold winter could see natural gas prices soar even higher. Technically we like the bullish breakout over the $72 level. The move helped produce a double-top breakout on its P&F chart, which now points to an $86 target. We are going to suggest buying calls anywhere above the $72 level. We'll target a move into the $79-80 range before APA's late October earnings report.

Suggested Options:
We are suggesting the October or January calls.

BUY CALL OCT 70.00 APA-JN OI=9626 current ask $4.90
BUY CALL OCT 75.00 APA-JO OI=5643 current ask $2.05
BUY CALL OCT 80.00 APA-JP OI=1518 current ask $0.70

BUY CALL JAN 70.00 APA-AN OI=8878 current ask $7.80
BUY CALL JAN 75.00 APA-AO OI=8473 current ask $5.20
BUY CALL JAN 80.00 APA-AP OI=2168 current ask $3.30

Picked on September 18 at $ 73.42
Change since picked: + 0.00
Earnings Date 10/27/05 (unconfirmed)
Average Daily Volume = 2.6 million

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Cameco Corp - CCJ - close: 53.30 chg: +1.85 stop: 49.49

Company Description:
Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest uranium producer. The company's uranium products are used to generate electricity in nuclear energy plants around the world, providing one of the cleanest sources of energy available today. Cameco's shares trade on the Toronto and New York stock exchanges. (source: company press release or website)

Why We Like It:
The high cost of energy these days have many investors thinking about nuclear power. One of the best ways to play nuclear power is CCJ who supplies uranium to the power plants. Not only is the U.S. considering nuclear power but energy-hungry China is making a big commitment to building new nuclear power plants. Technically we like CCJ's recent breakout over significant resistance at the $50.00 level. The stock has already pulled back to retest the $50 level as support so we want to buy the bounce. You, our reader, can choose to go long here or hope for another dip toward the $51.50 region and buy a bounce there. Our target is the $58.00-60.00 range before CCJ's early November earnings report. CCJ's P&F chart points to a $78 target.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 50.00 CCJ-LJ OI=8351 current ask $6.30
BUY CALL DEC 55.00 CCJ-LK OI=2517 current ask $3.70
BUY CALL DEC 60.00 CCJ-LL OI= 595 current ask $1.95

Picked on September 18 at $ 53.30
Change since picked: + 0.00
Earnings Date 11/01/05 (unconfirmed)
Average Daily Volume = 862 thousand

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Altria Group - MO - close: 73.14 change: +0.89 stop: 69.90

Company Description:
Altria Group is the parent company of Kraft Foods, Philip Morris International, Philip Morris USA and Philip Morris Capital Corporation. Altria Group is also the largest shareholder in the worlds second-largest brewer, SABMiller, with an approximate 33.9% economic interest. (source: company press release or website)

Why We Like It:
Sentiment for MO is improving. Multiple analysts have voiced their opinions that the litigation risks for the tobacco industry are dwindling. This has helped power MO to new all-time highs. We like MO as a momentum play but it's also a defensive play so that if the markets do turn south for the second half of September then MO should weather the storm relatively well. The Point & Figure chart for MO points to an $111.00 price target. We think shares can probably reach the $80 level before its mid-October earnings report. Readers can choose to buy calls here above $73.00 or hope for a dip back toward $71.00-71.50 and buy a bounce there. Our target will be the $78.00-79.00 range.

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

BUY CALL OCT 70.00 MO-JN OI=15029 current ask $4.70
BUY CALL OCT 75.00 MO-JO OI=30708 current ask $1.80

Picked on September 18 at $ 73.14
Change since picked: + 0.00
Earnings Date 10/19/05 (unconfirmed)
Average Daily Volume = 6.7 million
 

New Puts

Hovnanian - HOV - close: 54.75 chg: -2.46 stp: 57.81

Company Description:
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Illinois, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Goodman Homes, Matzel & Mumford, Diamond Homes, Westminster Homes, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Great Western Homes, Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes and First Home Builders of Florida. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. (source: company press release or website)

Why We Like It:
If you can't beat them, join them. That's sort of how we feel with the homebuilders right now. We tried to play the bounce from support but the early September rally has failed and the homebuilding sector is looking more and more vulnerable. Leading the way down is HOV. The company recently reported earnings and warned that due to construction delays their earnings in the third quarter would be negatively impacted. The company did say that any short-fall in the third quarter would be made up in the fourth quarter and that overall profits for 2005 would come in above Wall Street's expectations but it seems that no one is listening. The stock has broken down under significant support at the $55.00 level and its simple and exponential 200-dma's. The move has also helped cement the P&F chart sell signal that now points to a $39 target. We think HOV will fall toward round-number, psychological support near the $50.00 mark. We're suggesting puts under the $55.00 mark and will target the $50.25-50.00 range.

Suggested Options:
We are suggesting the October puts.

BUY PUT OCT 55.00 HOV-VK OI=2884 current ask $2.80
BUY PUT OCT 50.00 HOV-VJ OI= 864 current ask $1.10

Picked on September 18 at $ 54.75
Change since picked: + 0.00
Earnings Date 09/07/05 (confirmed)
Average Daily Volume = 1.2 million
 

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