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New Calls

Cigna - CI - close: 94.52 change: +1.97 stop: 91.99

Company Description:
CIGNA HealthCare, headquartered in Bloomfield, CT, provides medical benefits plans, dental coverage, behavioral health coverage, pharmacy benefits, and products and services that integrate and analyze information to support consumerism and health advocacy. (source: company press release or website)

Why We Like It:
Our market bias remains bearish but that doesn't mean we can't try and catch a few oversold bounces here and there. It looks like investors have priced in all the bad news for CI and the stock is starting to bounce. Shares crashed in late April as rival Aetna issued earnings and investors panicked over rising medical costs. A few days later CI reported earnings and the company issued an earnings warning, which sent shares of CI plummeting again. Yet now it looks like the worst maybe over. The P&F chart has produced a new buy signal and the MACD on the daily chart is nearing a new buy signal. We are going to suggest calls with CI above $93.50. More conservative traders may want to wait for CI to hit a new relative high above today's high at $95.91. Be advised that we do expect some resistance at the $100.00 mark so we're setting our target at $99.75-100.00. More aggressive traders may want to aim higher since the $105 level looks like more serious resistance and the P&F chart points to a $108 target.

Suggested Options:
We are suggesting the June or July calls. You choose which strike works best for you.

BUY CALL JUN 90.00 CI-FR open interest=3538 current ask $6.30
BUY CALL JUN 95.00 CI-FS open interest=1557 current ask $3.40
BUY CALL JUN 100.00 CI-FT open interest=8507 current ask $1.55

BUY CALL JUL 90.00 CI-GR open interest= 154 current ask $7.90
BUY CALL JUL 95.00 CI-GS open interest=1270 current ask $5.00
BUY CALL JUL 100.00 CI-GT open interest= 975 current ask $2.95

Picked on May 16 at $ 94.52
Change since picked: + 0.00
Earnings Date 08/02/06 (unconfirmed)
Average Daily Volume = 1.4 million

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Getty Images - GYI - cls: 64.95 chg: +1.71 stop: 62.49

Company Description:
Getty Images is the world's leading creator and distributor of visual content and the first place creative professionals turn to discover, purchase and manage imagery. The company's award-winning photographers and imagery help customers create inspiring work which appears every day in the world's most influential newspapers, magazines, advertising campaigns, films, television programs, books and Web sites. Headquartered in Seattle and serving customers in more than 100 countries, Getty Images believes in the power of imagery to drive positive change, educate, inform, and entertain. (source: company press release or website)

Why We Like It:
GYI is another bounce play. The stock has been really beat up over the last several months but shares are finally bouncing from significant support near the $60 region. Volume has been strong on the rallies recently and the stock looks poised to make a run toward the $70.00 level. We are going to suggest a trigger at $65.21, which is above today's high (65.15). If triggered then we'll target a rally into the $69.50-70.00 range. We're worried that the $70.00 level and the descending 50-dma, currently at 70.64, will act as overhead resistance. It is imperative that you use a stop loss. GYI has produced these bottoming formations before only to have the nascent rally get squashed, usually under the 50-dma.

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

BUY CALL JUN 60.00 GYI-FL open interest= 198 current ask $5.90
BUY CALL JUN 65.00 GYI-FM open interest= 235 current ask $2.30
BUY CALL JUN 70.00 GYI-FN open interest= 162 current ask $0.60

BUY CALL JUL 60.00 GYI-GL open interest= 72 current ask $6.80
BUY CALL JUL 65.00 GYI-GM open interest= 134 current ask $3.50
BUY CALL JUL 70.00 GYI-GN open interest= 211 current ask $1.30

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 997 thousand
 

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