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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
None AMGN None
  PD  
  UBB  

New Calls

None today.
 

New Puts

Amgen - AMGN - close: 73.58 change: -0.62 stop: 75.05

Company Description:
Amgen discovers, develops and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, and other serious illnesses. With a broad and deep pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. (source: company press release or website)

Why We Like It:
The BTK biotech index's longer-term trend is still up but short-term the sector index has weakened and its technical oscillators point lower. Dragging on the sector index is one of its major components AMGN. Shares of AMGN have been trading under a trendline of lower highs since the November 2005 peak. The recent failed rally near its 50-dma and 200-dma has finally produced a new MACD sell signal. The Point & Figure chart for AMGN currently points to a $60 target. We are going to suggest puts here under $75.00. Our short-term target is the $70.10-70.00 range. More aggressive traders might want to aim lower and use a wider stop loss.

Suggested Options:
We are suggesting the April puts.

BUY PUT APR 75 YAA-PO open interest=10839 current ask $2.80
BUY PUT APR 70 YAA-PN open interest=14365 current ask $0.90

Picked on March 09 at $ 73.58
Change since picked: + 0.00
Earnings Date 04/20/06 (unconfirmed)
Average Daily Volume = 10.1 million

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Phelps Dodge - PD - close: 132.90 change: -2.13 stop: 140.05

Company Description:
Phelps Dodge Corp. is one of the world's leading producers of copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ approximately 15,000 people worldwide. (source: company press release or website)

Why We Like It:
PD is a bearish candidate because we don't believe the consolidation is over yet. The stock broke bullish support back on February 10th but the oversold bounce took shares right back to the $150 level before fading again. Now PD has broken its 50-dma, 100-dma and multiple levels of psychological support. The long-term trend on PD is very bullish. The stock has these big run ups but when the consolidation occurs it tends to last for a while. The consolidation of its May '03 through Feb.'04 rally brought shares back down to its 50% retracement level of the bullish run. The consolidation of the May '04 through March '05 run up saw shares pull back to the 61.8% retracement level. If PD repeats that sort of pattern with the current pull back then a 50% retracement would put the stock around $122 and that just happens to be where the simple 200-dma is found today. Today looks like an entry point because of the failed rally under $140.00 and its simple 100-dma this morning. We're going to target a decline into the $124.00-123.00 range. Unfortunately, the stock has been somewhat volatile and we need to use a wide stop loss. Please note that PD is due to split 2-for-1 on Monday, March 13th. If you open positions tomorrow then you'll see the number of options you own double on Monday while their value should jump to 50% of their Friday close. Your options symbols will probably change. Plan ahead and ask your broker what the new symbols will be on Monday. Our post-split target is the $62-61 range.

Suggested Options:
We are suggesting the April puts.

BUY PUT APR 140 PD-PH open interest=2001 current ask $11.70
BUY PUT APR 135 PD-PG open interest=1232 current ask $ 8.70
BUY PUT APR 130 PD-PF open interest=2763 current ask $ 6.20
BUY PUT APR 125 PD-PE open interest=2166 current ask $ 4.20

Picked on March 09 at $132.90
Change since picked: + 0.00
Earnings Date 04/27/06 (unconfirmed)
Average Daily Volume = 2.8 million

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Unibanco Brasilrs - UBB - close: 77.44 chg: -3.87 stop: 83.26

Company Description:
Unibanco is the third-largest Brazilian private bank, with more than 80 years of history and activity in the market. The Bank is present in every segment of the financial market, offering a broad and complete range of services to a diversified customer base. (source: company press release or website)

Why We Like It:
The momentum in shares of Brazilian bank stock UBB has finally reversed course. The stock struggled to breakout over the $90.00 level and in just a few days shares have broken their bullish support, the 50-dma and the $80.00 mark on above average volume. The Point & Figure chart points to a $65 target. We see today as a new bearish entry point due to Thursday's bearish engulfing candlestick pattern. We would suggest shorts here under the 50-dma (78.31) but more conservative traders may want to wait for a move under $77.00 before initiating positions. Our target is the $71.50-70.00 range.

Suggested Options:
We are suggesting the April puts.

BUY PUT APR 80 UBB-PP open interest=222 current ask $5.80
BUY PUT APR 75 UBB-PO open interest=191 current ask $3.00
BUY PUT APR 70 UBB-PN open interest=243 current ask $1.40

Picked on March 09 at $ 77.44
Change since picked: + 0.00
Earnings Date 02/16/06 (confirmed)
Average Daily Volume = 755 thousand
 

New Strangles

None today.
 

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