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Call Options Plays
Put Options Plays
Strangle Options Plays
None APOL None
  BBOX  
  BSC  
  IDXX  
  MER  

New Calls

None today.
 

New Puts

Apollo Group - APOL - close: 52.58 chg: -1.84 stop: 55.05

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 are going to try again with APOL as a bearish candidate. We tried a few weeks ago but shares never broke support at $50.00 so they never hit our trigger to buy puts. We're going to try using a trigger again. The stock has produced two failed rallies under technical resistance at its descending 100-dma in the last couple of weeks. Plus, the hourly chart shows a bearish head-and-shoulders pattern with the neckline (support) near $52.00). We're going to suggest a trigger to buy puts at $51.75. There is probably some support near $50.00 but our target will be the March lows. We'll plan to exit in the $47.75-47.50 range.

Suggested Options:
We are suggesting the June puts. We do not want to hold over the late June earnings report. Our trigger is at $51.75.

BUY PUT JUN 55.00 OAQ-RK open interest=215 current ask $3.20
BUY PUT JUN 50.00 OAQ-RJ open interest=193 current ask $0.75

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/22/06 (unconfirmed)
Average Daily Volume = 2.1 million

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Black Box - BBOX - close: 45.41 chg: -2.41 stop: 46.55

Company Description:
Black Box is the world's largest technical services company dedicated to designing, building and maintaining today's complicated data and voice infrastructure systems. Black Box services 175,000 clients in 141 countries with 168 offices throughout the world. (source: company press release or website)

Why We Like It:
The networking sector took a blow when networking giant CSCO recently issued cautious comments about their quarter. Thursday saw a 3.2% sell-off in the NWX networking index, which helped push BBOX to a 5% loss. After three months of consolidating sideways we suspect that BBOX is poised to move lower. Today's decline ended with a breakdown under technical support at its 200-dma. If shares break the $45.00 level it will produce a new quadruple-bottom breakdown sell signal on its P&F chart. We are going to suggest a trigger to buy puts at $44.85. If triggered our target will be the 40.75-40.00 range. FYI: we would consider this play somewhat aggressive since we find stocks with low daily volume and low option volume somewhat dangerous!

Suggested Options:
We are suggesting the June puts. We do not want to hold over the June 1st earnings report. Our trigger is $44.85.

BUY PUT JUN 45.00 QBX-RI open interest= 63 current ask $2.40
BUY PUT JUN 40.00 QBX-RH open interest= 20 current ask $0.80

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 06/01/06 (confirmed)
Average Daily Volume = 90 thousand

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Bear Stearns - BSC - cls: 137.48 chg: -3.40 stop: 142.55

Company Description:
Founded in 1923, Bear, Stearns & Co. Inc. is a leading investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. With approximately $57.6 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, securities research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors. Headquartered in New York City, the company has approximately 12,000 employees worldwide. (source: company press release or website)

Why We Like It:
It is amazing what a few days of trading can do to change the situation. A week ago BSC was bouncing from support at its 50-dma and look poised to challenge its highs and beyond. Now the stock is breaking down and looks ready to sink toward support near $130.00. The XBD broker-dealer index has produced a similar failed rally/bounce and breakdown. We are suggesting puts with BSC under $138.00. Since BSC can be somewhat volatile more conservative traders may want to wait for a decline under $137 before initiating positions. More conservative types may also want to plan an exit at the rising 100-dma, which may act as technical support. We're going to target a decline into the $132.00-130.00 range. We suspect that the $130 level will act as support since it close to the 38.2% Fibonacci retracement level of its October-April run up.

Suggested Options:
We are suggesting the June puts but we plan to exit ahead of the June earnings report.

BUY PUT JUN 140.00 BSC-RH open interest=2372 current ask $5.60
BUY PUT JUN 135.00 BSC-RG open interest= 434 current ask $3.20

Picked on May 11 at $137.48
Change since picked: + 0.00
Earnings Date 06/15/06 (unconfirmed)
Average Daily Volume = 1.2 million

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IDEXX Labs - IDXX - close: 77.93 chg: -1.17 stop: 80.05

Company Description:
IDEXX Laboratories, Inc. is a leader in animal health, serving practicing veterinarians worldwide with the industry's broadest line of diagnostic, practice-management, and therapeutic products and services. Our innovative veterinary-specific solutions are designed to connect and work together simply and seamlessly -- enabling veterinarians to provide advanced medical care to their clients' pets, and build successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for the production animal industry, and tests for the quality and safety of water and milk. Headquartered in Westbrook, Maine, IDEXX Laboratories employs more than 3,000 people and offers products to customers in over 100 countries. (source: company press release or website)

Why We Like It:
The tide appears to have turned for IDXX. Shares peaked in late March, filled the gap in April, broke down under support at $80.00 two weeks ago, and broke down under support at its rising 100-dma following today's failed rally under the 10-dma near $80.00. The P&F chart is bearish and points to a $70 target. We think shares can slip to the rising 200-dma although we're keeping a watchful eye on potential support at $75.00. We're going to suggest puts with IDXX under $78.00. Our target will be the $72.50-73.00 range for now. We'll adjust it as the 200-dma rises.

Suggested Options:
We are suggesting the June puts although July puts are also available and currently have more open interest.

BUY PUT JUN 80.00 UID-RP open interest= 61 current ask $3.00
BUY PUT JUN 75.00 UID-RO open interest= 60 current ask $1.10

Picked on May 11 at $ 77.93
Change since picked: + 0.00
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 125 thousand

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Merrill Lynch - MER - close: 74.00 chg: -2.51 stop: 77.26

Company Description:
Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies with offices in 36 countries and territories and total client assets of approximately $1.8 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions, and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world's largest managers of financial assets. Firmwide, assets under management total $581 billion. (source: company press release or website)

Why We Like It:
This looks like a pretty attractive entry point to buy puts on MER. The stock broke down from its multi-month up trend a couple of weeks ago but now we have the benefit of seeing the oversold bounce fail near its 50-dma. Volume was pretty strong on today's decline and MER closed under potential support at $75.00 and its 100-dma. The P&F chart points to a $67 target. We're going to target a decline into the $70.50-70.00 range.

Suggested Options:
We are suggesting the June puts although July puts would also work well and appear to have more open interest.

BUY PUT JUN 75.00 MER-RO open interest=1699 current ask $2.30
BUY PUT JUN 72.50 MER-RB open interest=1186 current ask $1.30
BUY PUT JUN 70.00 MER-RN open interest= 893 current ask $0.70

Picked on May 11 at $ 74.00
Change since picked: + 0.00
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 4.7 million
 

New Strangles

None today.
 

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