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OXY APOL None
TS    

New Calls

Occidental Petrol. - OXY - cls: 90.04 chg: +1.36 stop: 85.95

Company Description:
Occidental Petroleum Corporation (NYSE: OXY) is a world leader in oil and natural gas exploration and production and a major North American chemical manufacturer. (source: company press release or website)

Why We Like It:
There are a ton of oil-related stocks that seem to be flashing some early buy signals with the recent bounce. We are not totally convinced that the group will continue higher short-term and that's why we're suggesting a trigger to buy calls here with OXY. We remain very bullish on a long-term basis for oil and oil companies. The OIX oil index has not violated its long-term bullish trend. Thus this recent pull back is a tempting spot to consider long positions. OXY is attractive because shares have bounced from support near $85.00 and its five-month trendline of support. We are suggesting a trigger to buy calls at $90.75. If you want to adjust that to $90.51 or $91.01 feel free. If we are triggered our target will be the February highs in the $97.50-98.00 range. A move over $92 will reverse the P&F chart into a new buy signal.

Suggested Options:
We are going to suggest March calls but you might want to consider using May calls instead.

BUY CALL MAR 85 OXY-CQ open interest=1510 current ask $6.60
BUY CALL MAR 90 OXY-CR open interest=7059 current ask $3.60
BUY CALL MAR 95 OXY-CS open interest=4487 current ask $1.60

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/09/06 (unconfirmed)
Average Daily Volume = 3.4 million

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Tenaris S.A. - TS - cls: 153.96 chg: +3.46 stop: 144.99

Company Description:
Tenaris is a leading global manufacturer of seamless steel pipe products and provider of pipe handling, stocking and distribution services to the oil and gas, energy and mechanical industries and a leading regional supplier of welded steel pipes for gas pipelines in South America. Domiciled in Luxembourg, it has pipe manufacturing facilities in Argentina, Brazil, Canada, Italy, Japan, Mexico, Romania and Venezuela and a network of customer service centers present in over 20 countries worldwide. (source: company press release or website)

Why We Like It:
It looks like TS is trading in a big bull-flag pattern. A breakout through the top edge (resistance) of the flag can be used as a new bullish entry point to buy calls. Short-term technical oscillators are turning bullish again and we suspect that the stock is poised to breakout next week. We also like that TS is a steel company that specializes in materials for the oil producers. If either sector, steel or oil, continues higher next week then TS could benefit. We are going to suggest a trigger to buy calls at $155.25. More conservative traders may want to wait for a move over $156 or even $158.25 - these two levels might offer some minor resistance. Our target will be the $164.00-165.00 range. We do not want to hold over the early March earnings report.

Suggested Options:
We are suggesting the March calls since we plan to exit ahead of the earnings report.

BUY CALL MAR 150 TSW-CJ open interest=445 current ask $11.00
BUY CALL MAR 155 TSW-CK open interest=214 current ask $ 8.00
BUY CALL MAR 160 TSW-CL open interest=439 current ask $ 6.10

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/01/06 (unconfirmed)
Average Daily Volume = 516 thousand
 

New Puts

Apollo Group - APOL - close: 58.06 chg: -0.80 stop: 60.01

Company Description:
Apollo Group Inc. has been providing higher education programs to working adults for almost 30 years. Apollo Group Inc. operates through its subsidiaries: The University of Phoenix Inc., Institute for Professional Development, The College for Financial Planning Institutes Corp., and Western International University Inc. The consolidated enrollment in its educational programs makes it the largest private institution of higher education in the United States. It offers educational programs and services at 95 campuses and 153 learning centers in 39 states, Puerto Rico, Alberta, British Columbia, Netherlands and Mexico. (source: company press release or website)

Why We Like It:
APOL spent the last week trying to breakout over resistance at the $60.00 level and the stock failed every time. Friday's trading looks like an entry point to buy puts given the failed rally at $60.00 and its descending simple 50-dma. Short-term technical indicators are turning bearish again and the P&F chart is pretty bearish with a $44.00 target. We are going to suggest puts here near $58 and target a decline into the $53.00-52.50 range. More conservative traders may want to wait for a decline under $58.00 just to be sure since the $58 level has been short-term support for the last few days.

Suggested Options:
We are suggesting the March puts since we plan to exit ahead of APOL's earnings report in mid March.

BUY PUT MAR 60 OAQ-OL open interest=725 current ask $2.95
BUY PUT MAR 55 OAQ-OK open interest=870 current ask $0.80

Picked on February 19 at $ 58.06
Change since picked: + 0.00
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.0 million
 

New Strangles

None today.
 

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