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Amerada Hess - AHC - close: 128.49 chg: +3.55 stop: 121.49

Company Description:
Amerada Hess, headquartered in New York, is a global integrated energy company engaged in the exploration for and the production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. (source: company press release or website)

Why We Like It:
We remain long-term bullish on the oil stocks but with the crude oil prices in a two-month bearish trend we've been hesitant to suggest new bullish positions in the sector. Thus this new play in AHC should be considered a more aggressive, higher risk strategy. We like AHC because the company also has exposure to the natural gas markets. Natural gas is still poised to turn higher as we move deeper into the beginning of winter, especially with significant amounts of our domestic natural gas production still offline in the gulf of Mexico. AHC's daily chart is starting to shows of a new up trend and today's gain pushed the stock over technical resistance at its simple 50-dma. The Point & Figure chart for AHC is very bullish with a clear buy signal and a $160 target. We are going to target a move into the $139.85-140.00 range over the next eight weeks. We'll start the play with a stop at $121.49 but we'd seriously consider exiting if AHC traded under $124.50. We do expect some resistance near 131.50.

Suggested Options:
We are going to suggest January calls.

BUY CALL JAN 125.00 AHC-AE open interest=614 current ask $9.60
BUY CALL JAN 130.00 AHC-AZ open interest=543 current ask $6.90
BUY CALL JAN 135.00 AHC-AY open interest=478 current ask $4.80

Picked on November 16 at $128.49
Change since picked: + 0.00
Earnings Date 01/25/06 (unconfirmed)
Average Daily Volume = 1.9 million
 

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