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ARLP WFMI None
PGR    

New Calls

Alliance Res. Ptrnrs - ARLP - close: 38.98 chg: +1.69 stop: 36.45

Company Description:
Alliance Resource Partners is the nation's only publicly traded master limited partnership involved in the production and marketing of coal. Alliance Resource Partners currently operates eight mining complexes in Illinois, Indiana, Kentucky, Maryland and West Virginia. (source: company press release or website)

Why We Like It:
We normally don't like to trade a stock with average daily volume this low but this looks like a new bullish entry point in the stock. Rival coal-producer ACI reported strong earnings this past week and it sparked a bullish breakout for several stocks in the industry. ARLP is one such stock that has broken through resistance near $38.00 and its 100-dma and exponential 200-dma. Broker resistance at $38.00 should now act as short-term support so we're going to suggest call positions with ARLP above $38.00. The $40.00 level could be the next hurdle but we're going to aim for a rise into the $42.00-42.50 range. This is a short-term play. ARLP is expected to report earnings on May 2nd (unconfirmed date) so we plan to exit next Friday.

Suggested Options:
We are suggesting May calls.

BUY CALL MAY 35.00 AFV-EG open interest=272 current ask $4.20
BUY CALL MAY 40.00 AFV-EH open interest= 60 current ask $0.65

Picked on April 23 at $ 38.98
Change since picked: + 0.00
Earnings Date 05/02/06 (unconfirmed)
Average Daily Volume = 101 thousand

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Progressive - PGR - close: 106.46 chg: +1.56 stop: 103.95

Company Description:
The Progressive Group of Insurance Companies, in business since 1937, ranks third in the nation for auto insurance based on premiums written and provides drivers with competitive rates and 24/7, in-person and online service. (source: company press release or website)

Why We Like It:
This is an old-fashion stock split play. Shares of PGR were quietly consolidating sideways in its $104-106 trading range on Friday when suddenly the stock shot higher. On Friday afternoon the company announced a 4-for-1 stock split set to occur on May 18th. We suspect that once the news reaches the masses over the weekend that PGR could see a steady stream of buying pressure over the next week. We are going to suggest positions now with PGR over $106.00. More conservative traders may want to wait for a breakout over $108.00 or over $110 and its 100-dma, both of which could act as overhead resistance. We have a two-week time frame as we do not want to hold over the May 8th earnings report. Our target is the $114.00-115.00 range. We do urge some caution on Monday morning. PGR might gap higher. If it gaps too high you may not want to chase it.

Suggested Options:
We are suggesting May calls.

BUY CALL MAY 105.00 PGR-EA open interest=474 current ask $3.40
BUY CALL MAY 110.00 PGR-EB open interest=378 current ask $1.10

Picked on April 23 at $106.46
Change since picked: + 0.00
Earnings Date 05/08/06 (unconfirmed)
Average Daily Volume = 846 thousand
 

New Puts

Whole Foods - WFMI - close: 63.91 chg: -1.22 stop: 66.05

Company Description:
Founded in 1980 in Austin, Texas, Whole Foods Market is the world's leading natural and organic foods supermarket and America's first national certified organic grocer. In fiscal year 2004, the company had sales of $3.9 billion and currently has more than 175 stores in the United States, Canada, and the United Kingdom. The Whole Foods Market motto, "Whole Foods, Whole People, Whole Planet"(TM) captures the company's mission to find success in customer satisfaction and wellness, employee excellence and happiness, enhanced shareholder value, community support and environmental improvement. (source: company press release or website)

Why We Like It:
The oversold bounce from WFMI's first quarter sell-off has stalled under $68.00 and its simple 200-dma. The stock has been struggling under resistance near $68.00 for weeks. Now shares are beginning to falter and the technical picture it turning increasingly bearish. We see Friday's decline under short-term support at $64.00 as a new entry point for puts. The P&F chart looks pretty bearish with a $43.00 target. We are only going to aim for a decline into the $60.25-60.00 range but more aggressive traders may want to aim lower. The biggest challenge is probably the time frame. We do not want to hold over the May 3rd earnings report.

Suggested Options:
We are suggesting the May puts.

BUY PUT MAY 65.00 FMQ-QM open interest=4051 current ask $2.80
BUY PUT MAY 62.50 FMQ-QZ open interest=2943 current ask $1.65
BUY PUT MAY 60.00 FMQ-QL open interest=5416 current ask $0.85

Picked on April 23 at $ 63.91
Change since picked: + 0.00
Earnings Date 05/03/06 (confirmed)
Average Daily Volume = 1.8 million
 

New Strangles

None today.
 

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