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FCX JCI None

New Calls

Freeport Mcmoran - FCX - cls: 60.22 chg: +1.92 stop: 55.79

Company Description:
FCX explores for, develops, mines and processes ore containing copper, gold and silver in Indonesia, and smelts and refines copper concentrates in Spain and Indonesia. (source: company press release or website)

Why We Like It:
Metal and mining related stocks continue to be the leaders in the rally this week. Copper-related mining companies have seen the shares rebound strongly after testing supporting trendlines. FCX is one such stock that has rebounded from support. A quick look at the daily chart and you'll notice that the rallies have been garnering the most volume over the last few weeks. The current bounce back over the $60.00 level looks like a new bullish entry point to buy calls. More patient traders might consider waiting for a pull back into the $58.00-59.00 region and buy a bounce there instead. We're going to stick our stop loss under Monday's low. Our target is the $64.75-65.00 range. Please note that there is some headline risk involving rival Phelp Dodge's (PD) earnings report coming up on January 31st.

Suggested Options:
We are suggesting the March calls.

BUY CALL MAR 55 FCX-CK open interest= 63 current ask $7.00
BUY CALL MAR 60 FCX-CL open interest=286 current ask $3.80
BUY CALL MAR 65 FCX-CM open interest= 35 current ask $1.85

Picked on January 24 at $ 60.22
Change since picked: + 0.00
Earnings Date 01/17/06 (confirmed)
Average Daily Volume = 2.6 million
 

New Puts

Johnson Controls - JCI - close: 70.35 chg: -0.54 stop: 72.51

Company Description:
Johnson Controls is a global leader in interior experience, building efficiency and power solutions. The company provides innovative automotive interiors that help make driving more comfortable, safe and enjoyable. For buildings, it offers products and services that optimize energy use and improve comfort and security. Johnson Controls also provides batteries for automobiles and hybrid electric vehicles, along with systems engineering and service expertise. Johnson Controls, founded in 1885, is headquartered in Milwaukee, Wisconsin. (source: company press release or website)

Why We Like It:
Investors were not very happy with the recent earnings report. The stock responded by breakdown down from its multi-month up trend and breaking support at its simple 50-dma. The oversold bounce has failed at the 50-dma for two days in a row and JCI looks poised to turn lower again. We are going to suggest a trigger to buy puts at $69.90. There is some support near the 100-dma but we believe that JCI could consolidate down toward the 65.50-65.00 range. The P&F chart has turned bearish and points to a $57 target.

Suggested Options:
We are suggesting the April puts because the March puts don't have much open interest.

BUY PUT APR 75 JCI-PO open interest=159 current ask $7.00
BUY PUT APR 70 JCI-PN open interest=189 current ask $3.70
BUY PUT APR 65 JCI-PM open interest=403 current ask $1.70

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/20/06 (confirmed)
Average Daily Volume = 955 thousand
 

New Strangles

None today.
 

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