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Call Options Plays
Put Options Plays
Strangle Options Plays
None ATI None
  BEN  
  USG  

New Calls

None today.
 

New Puts

Allegheny Tech - ATI - close: 78.45 chg: -6.08 stop: 82.55

Company Description:
Allegheny Technologies Incorporated is one of the largest and most diversified specialty metals producers in the world with revenues of $3.7 billion during the most recent four quarters ending March 31, 2006. ATI has approximately 9,300 full-time employees world-wide who use innovative technologies to offer growing global markets a wide range of specialty metals solutions. Our major markets are aerospace and defense, chemical process industry/oil and gas, electrical energy, medical, automotive, food equipment and appliance, machine and cutting tools, and construction and mining. Our products include nickel-based alloys and superalloys, titanium and titanium alloys, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, grain-oriented silicon electrical steel and tool steels, and forgings and castings. (source: company press release or website)

Why We Like It:
Everything looks relatively bullish for ATI. The P&F chart points to a triple-digit target. The stock is a big momentum candidate but short-term things have turned bearish. The steel-related stocks, which have been such big winners in recent weeks, have turned into big targets for profit taking. The three-day candlestick pattern on ATI is a bearish reversal. Considering the upward momentum in this stock and the chance for an oversold bounce in the markets we are classifying this as a high-risk play. We're suggesting shorts under $80.00 with a target in the $72.00-71.00 range.

Suggested Options:
We are suggesting the June puts for a short-term play.

BUY PUT JUN 80.00 ATI-RP open interest= 524 current ask $6.10
BUY PUT JUN 75.00 ATI-RO open interest=1301 current ask $3.60

Picked on May 14 at $ 78.45
Change since picked: + 0.00
Earnings Date 07/26/06 (unconfirmed)
Average Daily Volume = 2.2 million

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Franklin Res. - BEN - close: 89.30 chg: -2.07 close: 92.55

Company Description:
Franklin Resources, Inc. is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series and Fiduciary Trust investment teams. The San Mateo, CA-based company has more than 50 years of investment experience and over $504 billion in assets under management as of April 30, 2006. (source: company press release or website)

Why We Like It:
Investment-related stocks are getting hammered lately. It looks like BEN is headed even lower. Shares broke down under support at $92.50 and $90.00 and its 200-dma two weeks ago. Then BEN produced an oversold bounce that failed twice near resistance at $95.00. Now the stock is crashing lower again and shares fell through the 200-dma and the $90.00 level on strong volume this Friday. The P&F chart for BEN points to a $77.00 target. We are suggesting puts here under $90.00 with a target in the $85.00-84.50 range. Be advised that we do expect a bounce at the $87.50 region.

Suggested Options:
We are suggesting the June or July puts.

BUY PUT JUN 90.00 BEN-RR open interest=1231 current ask $2.95
BUY PUT JUN 85.00 BEN-RQ open interest=2336 current ask $1.10

or

BUY PUT JUL 90.00 BEN-SR open interest= 222 current ask $4.00
BUY PUT JUL 85.00 BEN-SQ open interest=1413 current ask $1.95

Picked on May 14 at $ 89.30
Change since picked: + 0.00
Earnings Date 07/27/06 (unconfirmed)
Average Daily Volume = 1.1 million

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USG Corp. - USG - close: 101.95 chg: -4.30 stop: 105.05

Company Description:
USG Corporation is a Fortune 500 company with subsidiaries that are market leaders in their key product groups: gypsum wallboard, joint compound and related gypsum products; cement board; gypsum fiber panels; ceiling panels and grid; and building products distribution. (source: company press release or website)

Why We Like It:
The upward momentum in building materials company USG is in jeopardy. The stock peaked near $120 and the recent bounce stalled under $115.00, establishing a lower high. Now shares are poised to breakdown under technical support at its 50-dma and the $100.00 level. The P&F chart is already bearish with a sell signal pointing to the $90.00 mark. We are going to suggest a trigger to buy puts at $99.75. If triggered we'll target a decline into the $92.00-90.00 range. We're a little concerned that the rising 100-dma, near 90.25, could be support. Take note, more conservative traders may want to use a lower trigger just to be sure of the breakdown.

Suggested Options:
We are suggesting the June puts. Unfortunately, there are no June $95s or $90s available at this time. Nor are there any July strikes available yet.

BUY PUT JUN 105.00 UZO-RA open interest= 800 current ask $8.20
BUY PUT JUN 100.00 UZO-RT open interest=4205 current ask $5.40

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 888 thousand
 

New Strangles

None today.
 

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