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New Calls

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New Puts

Itron - ITRI - close: 44.24 change: -3.06 stop: 46.51

Company Description:
Itron is a leading technology provider and critical source of knowledge to the global energy and water industries. Nearly 3,000 utilities worldwide rely on Itron's award-winning technology to provide the knowledge they require to optimize the delivery and use of energy and water. Itron creates value for its clients by providing industry-leading solutions for electricity metering; meter data collection; energy information management; demand response; load forecasting, analysis and consulting services; distribution system design and optimization; web-based workforce automation; and enterprise and residential energy management. (source: company press release or website)

Why We Like It:
ITRI produced an amazing run higher through most of 2005 but now it seems the stock is finally hitting some profit taking. Shares produced a double-top pattern back in July-August. Then the oversold bounce from the September low failed near resistance under the $52 level. Now the stock is breaking support at the $45.00 mark and its simple 100-dma on volume well above its average. Technicals are bearish and its MACD has produced a new sell signal. The P&F chart is bearish and points to a $38 target. We see today's breakdown as a new bearish entry point to buy puts. Our target is the $40.00 region (40.25-40.00) but more aggressive traders might target the exponential 200-dma near 38.50. A failed rally under $45.00 or even $46 could offer an alternative entry point to buy puts. We will not hold over the early November earnings report.

Suggested Options:
We are suggesting the November puts.

BUY PUT NOV 45.00 IUP-WI OI=370 current ask $5.80 (last $3.20)*
BUY PUT NOV 40.00 IUP-WH OI=227 current ask $2.50 (last $1.20)*

*These current "ask" prices from the CBOE do not look accurate. Confirm with your broker.

Picked on September 22 at $ 44.24
Change since picked: + 0.00
Earnings Date 11/02/05 (unconfirmed)
Average Daily Volume = 435 thousand

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WellChoice - WC - close: 69.54 change: -2.03 stop: 71.65

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 broad customer base including large group, middle-market and small group, individual, and national accounts. (source: company press release or website)

Why We Like It:
We're adding WC to the play list as a speculative technical play. We can't find the catalyst for today's gap down and big volume but the stock has broken support at the $70.00 mark in addition to support at its simple 50-dma. Technicals are naturally bearish but its Point & Figure chart is still bullish. Meanwhile the HMO.X healthcare index, while still relatively near its highs has produced what looks like a possible double-top pattern with the July and September peaks. We're going to bet that WC consolidates lower and tests the 100-dma near $66.50. If WC does not confirm this breakdown tomorrow we may choose to exit early.

Suggested Options:
We are suggesting the October puts as this will probably be a quick play.

BUY PUT OCT 70.00 WC-VN OI=130 current ask $2.10
BUY PUT OCT 65.00 WC-VM OI=188 current ask $0.45

Picked on September 22 at $ 69.54
Change since picked: + 0.00
Earnings Date 10/27/05 (unconfirmed)
Average Daily Volume = 248 thousand
 

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