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CI
TOT  

New Calls

Cigna - CI - close: 116.14 change: +1.24 stop: 111.49

Company Description:
As a Business of Caring, CIGNA provides employers with benefits, expertise and services that improve the health, well-being and productivity of their employees. Serving millions of customers, clients and members in the U.S. and around the globe, CIGNA's operating subsidiaries offer a full portfolio of medical, dental, behavioral health, pharmacy and vision care benefits and group life, accident and disability insurance. (source: company press release or website)

Why We Like It:
The HMO.X healthcare sector index is trading near new all-time highs. Helping push the index higher is Cigna Corp (CI), which itself is trading near new all-time highs. Actually shares of CI have been consolidating in a trading range between $111.50 and $116.00 for the last few weeks. We think the consolidation is about to end and the stock will continue with its longer-term rising trend. The MACD is about to produce a new buy signal. We are going to suggest new bullish positions with a trigger at $116.51 to open the play. More conservative traders may want to wait for a new all-time high (above the August peak) near $117.44 before initiating positions. Our five-week target is the $124.00 level but we do expect the $120 level to act as short-term resistance that will eventually be broken. We will exit before the early November earnings report. We'll start with a stop loss near the bottom of its trading range and under its 50-dma.

Suggested Options:
We are suggesting the November calls.

BUY CALL NOV 110.00 CI-KB OI= 64 current ask $8.70
BUY CALL NOV 115.00 CI-KC OI= 96 current ask $5.40
BUY CALL NOV 120.00 CI-KD OI= 80 current ask $2.90
BUY CALL NOV 125.00 CI-KE OI=148 current ask $1.40 *higher risk

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/02/05 (unconfirmed)
Average Daily Volume = 991 thousand

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Total S.A. - TOT - close: 137.23 chg: +1.81 stop: 131.99

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 or website)

Why We Like It:
Are you feeling a little contrarian on oil? Crude oil added about two percent today and this helped push shares of TOT through the top of its recent trading range and to a new all-time high. Volume could have been stronger to add more confidence behind the move but it's a bullish breakout nonetheless. We asked if you're feeling contrarian because Wall Street seems to dislike TOT. The stock has been downgraded at least three times in the last several weeks but this has not stopped its upward momentum. We would definitely consider this a momentum play. We'll use a stop loss under the bottom of its trading range and target a move into the $144-145 range. Our time frame is about six weeks.

Suggested Options:
We are suggesting the November calls.

BUY CALL NOV 130.00 TOT-KF OI= 425 current ask $9.20
BUY CALL NOV 135.00 TOT-KG OI=1067 current ask $5.60
BUY CALL NOV 140.00 TOT-KH OI=1323 current ask $2.80
*the 140s are the highest strike available today.

Picked on September 28 at $137.23
Change since picked: + 0.00
Earnings Date 08/05/05 (confirmed)
Average Daily Volume = 872 thousand
 

New Puts

None today.
 

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