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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
AHC APOL None
HAL    

New Calls

Amerada Hess - AHC - close: 144.54 chg: +3.82 stop: 139.95

Company Description:
Amerada Hess, headquartered in New York, is a global integrated energy company engaged in the exploration for and the production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. (source: company press release or website)

Why We Like It:
Now that spring is here investors are starting to place their bets on oil and oil stocks ahead of the summer driving season. The OIX and OSX oil indices are on the upswing as is the price of crude. We think AHC is on the verge of a bullish breakout. The stock has been consolidating sideways for weeks now and today's session produced a bullish engulfing candlestick pattern. More aggressive traders may want to buy calls right here. We'd rather see more follow through, especially given the bearish P&F chart. Our plan is to use a trigger at $146.51. If triggered then we'll target a rally into the $154.50-155.00 range. We do not want to hold over the late April earnings report so our time frame is just 22 days.

Suggested Options:
We are suggesting the May calls. There is a root symbol change between May 140 and May 145.

BUY CALL MAY 140.00 AHC-EU open interest=2458 current ask $9.20
BUY CALL MAY 145.00 IGG-EI open interest=1707 current ask $6.30
BUY CALL MAY 150.00 IGG-EJ open interest=1536 current ask $4.00
BUY CALL MAY 155.00 IGG-EK open interest=1918 current ask $2.35

Picked on April xx at $xxx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/26/06 (confirmed)
Average Daily Volume = 1.5 million

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Halliburton - HAL - close: 75.20 chg: +2.33 stop: 71.45

Company Description:
Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and KBR. (source: company press release or website)

Why We Like It:
HAL is another stock in the oil services sector. Both the OSX and HAL are breaking out after a multi-week consolidation. Traders bought the dip in HAL this morning near $72.00 and the 10-dma and 50-dma. This looks like an entry point to catch a rally toward the $80 region. Our target will be the $79.85-80.00 range. More aggressive traders may want to aim for the January highs near $82. The P&F chart looks very bullish with a $90 target. We do not want to hold over the April 21st earnings report.

Suggested Options:
We are suggesting the May calls although more aggressive traders might want to trade the April calls. April options expire after April 21st and we plan to exit on or before April 20th.

BUY CALL APR 72.50 HAL-DA open interest=10990 current ask $4.00
BUY CALL APR 75.00 HAL-DO open interest=17039 current ask $2.35
BUY CALL APR 80.00 HAL-DP open interest=14764 current ask $0.65

BUY CALL MAY 72.50 HAL-EA open interest= 976 current ask $5.20
BUY CALL MAY 75.00 HAL-EO open interest=3954 current ask $3.70
BUY CALL MAY 80.00 HAL-EP open interest=3913 current ask $1.60

Picked on April 04 at $ 75.20
Change since picked: + 0.00
Earnings Date 04/21/06 (confirmed)
Average Daily Volume = 8.0 million
 

New Puts

Apollo Group - APOL - close: 50.87 chg: -0.68 stop: 53.31

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 159 learning centers in 39 states, Puerto Rico, Alberta, British Columbia, the Netherlands and Mexico. (source: company press release or website)

Why We Like It:
We like APOL as a bearish candidate for multiple reasons. The stock has been trading in a bearish, descending channel for the last four months. Recently shares have been consolidating near the top of its channel and they look ready to head toward the bottom of its channel. We like the mid-month failed rally near $55 and its 50-dma. We also like how APOL has been showing relative weakness the last couple of days. Yesterday's session produced a small bearish engulfing candlestick. The MACD is near a new sell signal. The P&F chart points to a $44 target. We want to catch a breakdown under support at the $50.00 level. Our plan is to use a trigger at $49.85 to buy puts. If triggered we will have two targets. Our first target is the $45.50-45.00 range. Conservative traders can exit here, the rest of us we're suggesting sell half their position. We'll keep the other half open and target a decline into the $41.00-40.00 range, which is closer to the bottom of its channel. Please note that APOL has a two-day analyst meeting April 5th and 6th and news from that meeting could send shares either direction. Some of our readers might want to wait until after the analyst meeting before considering positions.

Suggested Options:
We are suggesting the May calls. Our trigger to buy puts is at $49.85.

BUY PUT MAY 50.00 OAQ-QJ open interest=2315 current ask $1.70
BUY PUT MAY 45.00 OAQ-QI open interest= 722 current ask $0.40

Picked on April xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/22/06 (unconfirmed)
Average Daily Volume = 2.4 million
 

New Strangles

None today.
 

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