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Call Options Plays
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ASH None None
CI    
FFIV    

New Calls

Ashland - ASH - close: 66.31 change: +0.94 stop: 64.75

Company Description:
Ashland Inc. (NYSE: ASH) is a chemical and transportation construction company providing innovative products, services and solutions. A Fortune 500 company, we have sales and operations throughout the United States and in more than 120 countries around the world. Our operations include four wholly owned divisions: Ashland Paving And Construction (APAC), Ashland Distribution, Ashland Specialty Chemical and Valvoline. Weve come a long way since we started in 1924 as a regional petroleum refiner. (source: company press release or website)

Why We Like It:
ASH may be a diversified services company but it doesn't hurt to have an oil refinery operation with oil rising over $60 a barrel. The stock is trading near it's highs and a move over $67.00 would produce a new P&F chart buy signal but if you looked at the P&F chart then you'd notice that it was already in a buy signal with a $97 target. Looking back to the daily chart short-term oscillators are rising and its MACD is near a new buy signal as well. We are going to suggest a trigger to go long at $67.05. If triggered then we'll target a rally into the $72.00-72.50 range.

Suggested Options:
We are suggesting the April calls.

BUY CALL APR 65 ASH-DM open interest=911 current ask $3.40
BUY CALL APR 70 ASH-DN open interest=247 current ask $1.00

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/31/06 (confirmed)
Average Daily Volume = 689 thousand

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Cigna - CI - close: 124.57 change: +0.61 stop: 119.90

Company Description:
CIGNA Corporation and its subsidiaries constitute one of the largest investor owned health and related benefits organizations in the United States. Its subsidiaries are major providers of health and related benefits offered through the workplace, including health care products and services, group life, accident and disability insurance. As of December 31, 2005, CIGNA Corp. and its subsidiaries had shareholders' equity of $5.4 billion. Full-year 2005 revenues totaled $16.7 billion. (source: company press release or website)

Why We Like It:
We tried to play CI as a call candidate several days ago and we bailed out when it looked like shares were about to breakdown under the $120.00 level. CI never did break the $120.00 mark and now the stock is shooting skyward above resistance at the $124.00 level. Most of the technicals and the P&F chart are bullish. We are going to suggest bullish call positions in CI in the $123-126 region. Our short-term target is $129.75-130.00.

Suggested Options:
We are suggesting the April calls.

BUY CALL APR 120 CI-DD open interest=469 current ask $7.60
BUY CALL APR 125 CI-DE open interest=825 current ask $4.40
BUY CALL APR 130 CI-DF open interest=311 current ask $2.20

Picked on February 26 at $124.57
Change since picked: + 0.00
Earnings Date 02/08/06 (confirmed)
Average Daily Volume = 944 thousand

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F5 Networks - FFIV - close: 67.16 chg: +2.76 stop: 63.85

Company Description:
F5 Networks is the global leader in Application Delivery Networking. F5 provides solutions that make applications secure, fast and available for everyone, helping organizations get the most out of their investment. By adding intelligence and manageability into the network to offload applications, F5 optimizes applications and allows them to work faster and consume fewer resources. F5's extensible architecture intelligently integrates application optimization, protects the application and the network, and delivers application reliability -- all on one universal platform. Over 10,000 organizations and service providers worldwide trust F5 to keep their applications running. The company is headquartered in Seattle, Washington with offices worldwide. (source: company press release or website)

Why We Like It:
FFIV is on the move. The stock has seen its share of positive analyst comments following a strong earnings report in January and a bullish earnings guidance for the next quarter. We like Friday's breakout over resistance. The stock had been trading under resistance in the $65.00 and $66.00 levels and finally broke out on above average volume. This move helped produce a new MACD buy signal on the daily chart. The P&F chart is also bullish and points to an $84 target. Now that FFIV is hitting new five-year highs the next level of resistance is probably $70.00. While we would buy calls here near $67.00 a better entry point would be on a dip back toward $66.00 (or even $65.00). We'll plan an exit in the $69.95-70.00 range. More aggressive traders may want to aim higher say the $72.50-75.00 region.

Suggested Options:
We are suggesting the April calls.

BUY CALL APR 65 FLK-DM open interest=1527 current ask $6.70
BUY CALL APR 70 FLK-DN open interest= 267 current ask $4.10

Picked on February 26 at $ 67.16
Change since picked: + 0.00
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.0 million
 

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