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Call Options Plays
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Strangle Options Plays
None AMGN None
  BNI  
  FMX  
  MMM  
  SNDK  

New Calls

None today.
 

New Puts

Amgen Inc. - AMGN - close: 66.85 chg: -0.94 stop: 70.01

Company Description:
Amgen discovers, develops and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new science's promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. Amgen therapeutics have changed the practice of medicine, helping millions of people around the world in the fight against cancer, kidney disease, rheumatoid arthritis, and other serious illnesses. With a broad and deep pipeline of potential new medicines, Amgen remains committed to advancing science to dramatically improve people's lives. (source: company press release or website)

Why We Like It:
AMGN, one of the biggest biotech stocks in the sector, has been leading the industry lower. The stock has a multi-month pattern of lower highs and lower lows. The recent bounce from $65.00 ahs failed under its 50-dma near $70.00 and technical indicators have turned bearish again. We are going to suggest puts with AMGN under $68.00. Our target is going to be the $62.50-62.00 range. More aggressive traders may want to aim for $60.00, which would coincide with the P&F chart's target. We'll set our stop loss at $70.01 but more conservative types might want to try and play with a stop near $68.50.

Suggested Options:
We are suggesting the June or July puts. Pick which strike price best suits your trading style and risk.

BUY PUT JUN 70.00 YAA-RN open interest=3134 current ask $3.60
BUY PUT JUN 67.50 YAA-RU open interest=3153 current ask $1.85
BUY PUT JUN 65.00 YAA-RM open interest=4921 current ask $0.85

BUY PUT JUL 70.00 YAA-SN open interest=8513 current ask $4.30
BUY PUT JUL 67.50 YAA-SU open interest=6040 current ask $2.85
BUY PUT JUL 65.00 YAA-SM open interest=13550 current ask $1.85

Picked on May 23 at $ 66.85
Change since picked: + 0.00
Earnings Date 07/18/06 (unconfirmed)
Average Daily Volume = 8.8 million

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Burlington NorSantaFe - BNI - close: 75.06 chg: +0.22 stop: 77.51

Company Description:
BNSF Railway operates one of the largest railroad networks in North America, with about 32,000 route miles in 28 states and two Canadian provinces. The railway is among the world's top transporters of intermodal traffic, moves more grain than any other American railroad, transports the components of many of the products we depend on daily, and hauls enough low-sulphur coal to generate about ten percent of the electricity produced in the United States. (source: company press release or website)

Why We Like It:
While we believe the railroads will probably fare better than some of the other industries inside the transportation sector the railroads remain big targets for profit taking. The Dow Jones Transportation index produced a pretty sharp failed rally today. If the sector is going to continue lower we want to try and capture the move with BNI. Shares of BNI have produced an oversold bounce but it appears to have failed under its 10-dma today. The bounce has produced some bullish signals in the short-term technical oscillators but we're trying to jump the gun here. The P&F chart, which tends to eliminate a lot of noise, points to a $66.00 target. We're going to target a decline into the $70.50-70.00 range, since the $70.00 level and the simple 200-dma (69.50) will probably act as support.

Suggested Options:
We are suggesting the June or July puts. Pick which strike price best suits your trading style and risk.

BUY PUT JUN 80.00 BNI-RP open interest=2684 current ask $5.90
BUY PUT JUN 75.00 BNI-RO open interest=1629 current ask $2.70
BUY PUT JUN 70.00 BNI-RN open interest=1844 current ask $0.95

BUY PUT JUL 80.00 BNI-SP open interest=5918 current ask $6.80
BUY PUT JUL 75.00 BNI-SO open interest=2778 current ask $3.80
BUY PUT JUL 70.00 BNI-SN open interest=3990 current ask $1.90

Picked on May 23 at $ 75.06
Change since picked: + 0.00
Earnings Date 07/25/06 (unconfirmed)
Average Daily Volume = 2.0 million

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Femsa Fomento - FMX - close: 87.47 chg: +2.34 stop: 90.05

Company Description:
FEMSA is the leading beverage company in Latin America. It controls an integrated beverage platform that comprises Coca-Cola FEMSA, the largest Coca-Cola bottler in the region; FEMSA Cerveza, one of the leading brewers in Mexico and important beer exporter to the United States; and Oxxo, the largest and fastest growing convenience store chain in Mexico with over 4,200 stores. (source: company press release or website)

Why We Like It:
FMX hit new all-time highs earlier this month but when the market began to sell-off traders began to lock in their profits. We don't believe the profit taking is over yet. The stock has produced a sharp oversold bounce from yesterday's low (81.75) to today's high (89.55) that was partially driven by positive analyst comments. UBS reiterated their "buy" rating on the stock and raised their price target this morning, which would account for the gap higher today. Yet the rally today reversed course under the $90.00 level, which looks like a new entry point to buy puts. We are going to target a decline into the $82.50-82.00 range. The P&F chart points to a $69 target. Due to the volatility we would label this a more aggressive play. FYI: We are aware that the weekly chart's last candlestick looks like a hammer pattern, which is typically a bullish reversal pattern, but it's worth noting the week has just begun.

Suggested Options:
We are suggesting the June or July puts. Pick which strike price best suits your trading style and risk.

BUY PUT JUN 90.00 FMX-RR open interest= 14 current ask $4.70
BUY PUT JUN 85.00 FMX-RQ open interest= 10 current ask $1.85

BUY PUT JUL 90.00 FMX-SR open interest= 52 current ask $5.50
BUY PUT JUL 85.00 FMX-SQ open interest= 91 current ask $3.10

Picked on May 23 at $ 87.47
Change since picked: + 0.00
Earnings Date 04/28/06 (confirmed)
Average Daily Volume = 415 thousand

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3M Co. - MMM - close: 83.44 chg: -0.29 stop: 85.01

Company Description:
Every day, 3M people find new ways to make amazing things happen. Wherever they are, whatever they do, the company's customers know they can rely on 3M to help make their lives better. 3M's brands include Scotch, Post-it, Scotchgard, Thinsulate, Scotch-Brite, Filtrete, Command and Vikuiti. Serving customers in more than 200 countries around the world, the people of 3M use their expertise, technologies and global strength to lead in major markets including consumer and office; display and graphics; electronics and telecommunications; safety, security and protection services; health care; industrial and transportation. (source: company press release or website)

Why We Like It:
The DJIA index continues to look vulnerable to more selling and we expect it to drag down shares of Dow-component MMM. MMM had been one of the best performing stocks in the average over the past couple of months but now the stock has broken its bullish channel and many of the technical indicators have turned bearish. We're not looking for a big move just a drop into the $80.25-80.00 range. The $80.00 mark was resistance in the past so we expect it to act as new support. We'll set our initial stop loss at $85.01 but more conservative traders might want to try a drop near today's high at $84.02. We would not be surprised to see a bounce at $82.00 or near the 50-dma.

Suggested Options:
We are suggesting the June puts. Please note June options are due to expire in about four weeks.

BUY PUT JUN 85.00 MMM-RQ open interest=4619 current ask $2.40
BUY PUT JUN 80.00 MMM-RP open interest=2024 current ask $0.50

Picked on May 23 at $ 83.44
Change since picked: + 0.00
Earnings Date 07/21/06 (unconfirmed)
Average Daily Volume = 3.2 million

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SanDisk - SNDK - close: 58.98 chg: -0.59 stop: 63.05

Company Description:
SanDisk, the world's largest supplier of flash memory data storage card products, designs, manufactures and markets industry-standard, solid-state data, digital imaging and audio storage products using its patented, high density flash memory and controller technology. SanDisk is based in Sunnyvale, CA. (source: company press release or website)

Why We Like It:
Normally we probably would not suggest a bearish play on a stock this close to its rising 200-dma. We're making an exception with SNDK because so much looks bearish about the stock. After six weeks of failed rallies near resistance at $66.00 shares broke down through its trend of higher lows. Any attempt at a bounce struggled near the $83.00 level. Short-term technicals have turned bearish again in addition to some bearish signals on its weekly chart. Plus the P&F chart displays a double-bottom breakdown sell signal with a $53.00 target. We are suggesting puts with SNDK under $60.00. Our target will be the $53.00-52.50 range. We'll set our stop loss at $63.05 but more conservative types might want to consider putting their stop near $61.50. Be advised that SNDK is holding its annual shareholder meeting on Thursday, May 25th. There is no way to know if the meeting will produce any stock-moving news.

Suggested Options:
We are suggesting the June or July puts. Pick which strike price best suits your trading style and risk.

BUY PUT JUN 60.00 SWF-RL open interest=9718 current ask $2.90
BUY PUT JUN 57.50 SWF-RY open interest=2850 current ask $1.70
BUY PUT JUN 55.00 SWF-RK open interest=4414 current ask $0.95

BUY PUT JUL 60.00 SWF-SL open interest=9422 current ask $5.10
BUY PUT JUL 57.50 SWF-SY open interest=3972 current ask $3.90
BUY PUT JUL 55.00 SWF-SK open interest=8263 current ask $2.85

Picked on May 23 at $ 58.98
Change since picked: + 0.00
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 11.1 million
 

New Strangles

None today.
 

New Play Archives