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None BCR

New Calls

None today.
 

New Puts

Bard C.R.- BCR - close: 61.70 change: -1.16 stop: 64.25

Company Description:
C. R. Bard, Inc., headquartered in Murray Hill, N.J., is a leading multinational developer, manufacturer and marketer of innovative, life-enhancing medical technologies in the fields of vascular, urology, oncology and surgical specialty products. (source: company press release or website)

Why We Like It:
BCR peaked back in May near $73 and has struggled ever since. The stock managed a bounce from support near $63 back in August but that rebound stalled under new resistance in the $67-68 range near its simple 200-dma. The stock continued to sell off even after reporting earnings that came in three cents higher than analysts' estimates. Today's decline puts the stock under last week's low with above average volume fueling the move. The P&F chart is bearish and points to a $55 target. Our first target is the $58.00 level. More aggressive traders might want to aim for the $55 region. Our time frame is less than six weeks.

Suggested Options:
We are suggesting December puts.

BUY PUT DEC 65.00 BCR-XM open interest= 0 current ask $4.00
BUY PUT DEC 60.00 BCR-XL open interest= 5 current ask $1.25

Picked on October 26 at $ 61.70
Change since picked: + 0.00
Earnings Date 10/18/05 (confirmed)
Average Daily Volume = 745 thousand

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Infosys Tech. - INFY - close: 67.95 chg: -1.14 stop: 70.51

Company Description:
Infosys defines, designs and delivers IT enabled business solutions. These provide our clients with strategic differentiation and operational superiority, thereby increasing their competitiveness. Each solution is delivered with the industry-benchmark Infosys Predictability that gives our clients peace of mind. With Infosys, they are assured of a transparent business partner, business-IT alignment with flexibility, world-class processes, speed of execution and the power to stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered. Infosys has over 46,000 employees in over 30 offices worldwide. (source: company press release or website)

Why We Like It:
INFY reported earnings back on October 11th. The company beat expectations and raised guidance but investors were still not happy. The stock gapped higher following its earnings report and broke through resistance at the $75 level but quickly reversed course. Now the stock has in a bearish pattern and its P&F chart points to a $57 target. The recent oversold bounce has failed near $70.00 and its simple 200-dma and the move looks like a new entry point to buy puts. We are going to target a decline into the $62.00-60.00 range. Please note that Microsoft (MSFT), the biggest software company in the world, is going to report earnings on Thursday afternoon after the closing bell. What MSFT has to say about their business could set the tone for the software sector. More conservative traders may want to wait until Friday morning and see how shares of INFY react to the MSFT news before considering any new positions here. Also note that INFY will host an analyst meeting on November 11th.

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 70.00 IUN-XN open interest= 12 current ask $5.40
BUY PUT DEC 65.00 IUN-XM open interest= 0 current ask $2.70

Picked on October 26 at $ 67.95
Change since picked: + 0.00
Earnings Date 10/11/05 (confirmed)
Average Daily Volume = 698 thousand
 

New Strangles

Abercrombie&Fitch - ANF - cls: 49.23 chg: -0.25 stop: n/a

Company Description:
The Company operated 352 Abercrombie & Fitch stores, 163 abercrombie stores, 289 Hollister Co. stores and 6 RUEHL stores at the end of fiscal September. (source: company press release or website)

Why We Like It:
It has been a rough end of summer for ANF. Investors are worried that high gas prices and higher heating bills will take a big bite out of consumer spending. So why do we like ANF as a strangle candidate? The stock has been consolidating sideways the last five weeks and that consolidation is narrowing. Fundamentally we might be tempted to bet on a decline but it would be a tough decision to fight the historical bullish trend in retailers during the fourth quarter. Plus, ANF's recent same-store sales report looked pretty darn good. That's why we're suggesting a strangle. ANF is due to report earnings in mid November and we plan to hold over the report.

Suggested Options:
We would use an entry window of $49.00-51.00 to open the play. Obviously the closer ANF is to $50.00 the better the strangle entry "should" be. We're suggesting the December options although traders could also use Januarys. At these prices our cost should be $2.70. Try and keep it under $3.00. Our target will be a rise to $5.00 but traders may want to consider exiting in the $4.50 or higher range.

BUY CALL DEC 55.00 ANF-LK open int= 431 current ask $1.25
-and-
BUY PUT DEC 45.00 ANF-XI open int= 20 current ask $1.45

Picked on October 26 at $ 49.23
Change since picked: + 0.00
Earnings Date 11/15/05 (unconfirmed)
Average Daily Volume = 2.6 million

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Hutchinson Tech. - HTCH - cls: 24.89 chg: -0.12 stop: n/a

Company Description:
Hutchinson Technology is the leading worldwide supplier of suspension assemblies for disk drives. Hutchinson Technology's BioMeasurement Division provides health professionals with simple, accurate methods to measure the oxygen in tissue. (source: company press release or website)

Why We Like It:
There seems to be a big disconnect between shares of HTCH and the DDX disk drive index. The stock has taken a beating over the last several months with big gaps down on July 22nd and August 30th both of which were sparked by an earnings warning. There is no telling what the company will say when the report earnings on November 1st but odds are it could produce a sharp move in the stock price and it's why we're suggesting a strangle.

Suggested Options:
We are suggesting the January options although traders could also use December strikes if they prefer. At these prices our investment should be about $1.65. We would try and keep it around $1.75 or less. We'll target a rise to $3.00. We are suggesting a $24.75-25.25 entry window ahead of the company's earnings report.

BUY CALL JAN 30.00 UTQ-AF open int= 472 current ask $0.90
-and-
BUY PUT JAN 20.00 UTQ-MD open int= 459 current ask $0.75

sa

Picked on October 00 at $ 00.00
Change since picked: + 0.00
Earnings Date 11/01/05 (confirmed)
Average Daily Volume = 666 thousand
 

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