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  LTR  

New Calls

None today.
 

New Puts

Ipsco Inc. - IPS - close: 86.45 chg: -0.23 stop: 90.01

Company Description:
IPSCO operates steel mills at three locations and pipe mills at six locations in Canada and the United States. As a low cost North American steel producer, IPSCO has a combined annual steel making capacity of 3,500,000 tons. The Company's tubular facilities produce a wide range of tubular products including line pipe, oil and gas well casing and tubing, standard pipe and hollow structurals, for a combined annual capacity of 1,725,000 tons. Steel can also be further processed at IPSCO's five temper leveling and coil processing facilities. (source: company press release or website)

Why We Like It:
It would appear that the upward momentum in the steel industry has stalled. Almost all the stocks in the group have reversed and technicals look bearish. The action in IPS today looks like a clear failed rally at the $90.00 level. We are going to suggest a trigger to buy puts at $85.90. If triggered we will target a decline into the $80.25-80.00 range. The P&F chart displays a triple-bottom sell signal and a $77 target.

Suggested Options:
We are suggesting the March puts.

BUY PUT MAR 90 IPS-OR open interest=1643 current ask $6.50
BUY PUT MAR 85 IPS-OQ open interest= 59 current ask $3.70
BUY PUT MAR 80 IPS-OP open interest=1383 current ask $1.85

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/06/06 (confirmed)
Average Daily Volume = 343 thousand

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Loews - LTR - close: 94.73 change: -0.99 stop: 97.01

Company Description:
Loews Corporation has grown to include CNA Financial Corporation; Lorillard, Inc.; Diamond Offshore Drilling, Inc.; Boardwalk Pipelines, LLC; Bulova Corporation, and Loews Hotels. (source: company press release or website)

Why We Like It:
We have been watching LTR for the last few weeks to see if shares would bounce from support near $95.00 and its rising 100-dma. It looks like the stock will break down instead. Normally being diversified like LTR can protect you from any wild swings but the insurance sector hasn't been doing that great lately and insurance is one of LTR's major divisions. More recently oil stocks have been getting hammered and LTR's exposure to oil services certainly isn't helping it today. The only positive seems to be the tobacco sector but that's been mixed lately. If Phillip Morris breaks down under its 200-dma it might drag the rest of the tobacco sector lower with it. Today's action in LTR looks like a failed rally at $96.00 and a breakdown below support. The 100-dma is at 95.15. Our biggest concern is that so many of its technical oscillators are already looking oversold and due for a correction. We are going to suggest a trigger to buy puts at $94.45. If triggered we'll target a decline into the $90.25-90.00 range, which is still above technical support at its rising 200-dma. We have a very short-term time frame. We plan to exit next Wednesday, February 15th to avoid holding over its earnings report on Thursday the 16th.

Suggested Options:
We are suggesting the March puts.

BUY PUT MAR 95 LTR-OS open interest=493 current ask $2.80
BUY PUT MAR 90 LTR-OR open interest=681 current ask $1.10

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 508 thousand
 

New Strangles

None today.
 

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