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Call Options Plays
Put Options Plays
Strangle Options Plays
ACGL BMET None
PNRA TXI  

New Calls

Arch Cap. Grp. - ACGL - cls: 57.74 chg: +0.93 stop: 55.95

Company Description:
Arch Capital Group Ltd., a Bermuda-based company with approximately $2.8 billion capital at December 31, 2005, provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries. (source: company press release or website)

Why We Like It:
ACGL appears to be on the verge of a significant breakout near resistance at the $58.00 level. The stock has been consolidating mostly sideways for the past several months. However, what is noteworthy is the stock's relative strength compared to its peer group. Friday's gain was actually a breakout to a new high and volume was above average on the move. We want to see more confirmation before initiating positions. Therefore we're suggesting a trigger at $58.15 to buy calls. If triggered then we'll target a move into the $62.50-63.00 range. We do not want to hold over the late April earnings report.

Suggested Options:
We're suggesting the May calls so we can hold the position right up to (but not over) the earnings announcement. June strikes have more open interest.

BUY CALL MAY 55.00 UOZ-EK open interest= 1 current ask $4.10
BUY CALL MAY 60.00 UOZ-EL open interest= 0 current ask $1.10

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/24/06 (unconfirmed)
Average Daily Volume = 195 thousand

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Panera Bread - PNRA - close: 75.18 chg: +0.37 stop: 71.95

Company Description:
Panera Bread Company owns and franchises bakery-cafes under the Panera Bread and Saint Louis Bread Co. names. The Company is a leader in the emerging specialty bread/cafe category due to its unique bread combined with a quick, casual dining experience. (source: company press release or website)

Why We Like It:
We realize that our local Panera Bread is not a proxy for the whole company but they certainly do a booming business. Evidently business must be pretty good all over. Remember the Atkins or no carb diets? They appear to be forgotten by the masses. Shares of PNRA are hitting new highs. The P&F chart for PNRA points to a $102 target. We see this as a momentum play and are suggesting calls right here over $74.00. Our target will be the $79.50-80.00 range.

Suggested Options:
We are suggesting the May calls.

BUY CALL MAY 70.00 UPA-EN open interest=1007 current ask $6.80
BUY CALL MAY 75.00 UPA-EO open interest=1420 current ask $3.50
BUY CALL MAY 80.00 UPA-EP open interest=1085 current ask $1.35

Picked on April 02 at $ 75.18
Change since picked: + 0.00
Earnings Date 05/16/06 (unconfirmed)
Average Daily Volume = 458 thousand
 

New Puts

Biomet - BMET - close: 35.52 chg: -0.52 stop: 36.21

Company Description:
Biomet, Inc. and its subsidiaries design, manufacture and market products used primarily by musculoskeletal medical specialists in both surgical and non-surgical therapy. The Company's product portfolio encompasses reconstructive products, including orthopedic joint replacement devices, bone cements and accessories, and dental reconstructive implants; fixation products, including electrical bone growth stimulators, internal and external orthopedic fixation devices, craniomaxillofacial implants and bone substitute materials; spinal products, including spinal stimulation devices, spinal hardware and orthobiologics; and other products, such as arthroscopy products and softgoods and bracing products. Headquartered in Warsaw, Indiana, Biomet and its subsidiaries currently distribute products in more than 100 countries. (source: company press release or website)

Why We Like It:
This oversold bounce in BMET is failing at technical resistance at the simple 200-dma. This looks like a low-risk entry point to buy puts and ride the stock lower for a few points. We are suggesting puts here with a stop loss at $36.21. Our target is going to be the $32.50-32.00 range.

Suggested Options:
We are suggesting the May puts. Our preferred put would be the $37.50 or $35.00 strike.

BUY PUT MAY 37.50 BIQ-QU open interest= 395 current ask $2.70
BUY PUT MAY 35.00 BIQ-QG open interest=1724 current ask $1.30
BUY PUT MAY 32.50 BIQ-QZ open interest= 518 current ask $0.45

Picked on April 02 at $ 35.52
Change since picked: + 0.00
Earnings Date 03/21/06 (confirmed)
Average Daily Volume = 1.8 million

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Texas Industries - TXI - cls: 60.49 chg: -0.99 stop: 61.35

Company Description:
TXI is the largest producer of cement in Texas and a major cement producer in California. TXI is also a major supplier of construction aggregates, ready-mix concrete and concrete products. (source: company press release or website)

Why We Like It:
TXI is another technical play. On Thursday the stock produced a bearish reversal with a big bearish engulfing candlestick pattern. The move was fueled by the company's earnings report and volume on the reversal was very big. Friday's session was not a strong follow through but the intraday chart shows another failed rally pattern. Meanwhile the daily chart has a new MACD sell signal. We are going to suggest a trigger under Friday's low at 59.25. If triggered then we will target a decline into the $55.50-55.00 range.

Suggested Options:
We are suggesting the May puts.

BUY PUT MAY 60.00 TXI-QL open interest= 66 current ask $2.90
BUY PUT MAY 55.00 TXI-QK open interest=100 current ask $1.15

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/30/06 (confirmed)
Average Daily Volume = 392 thousand
 

New Strangles

None today.
 

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