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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
GS None None
HAL    
HOC    
IXC    
PCLN    

New Calls

Goldman Sachs - GS - close: 147.32 chg: +3.40 stop: 143.45

Company Description:
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world. (source: company press release or website)

Why We Like It:
The XBD Broker-dealer index has produced a tempting rebound after a nasty three-week sell-off. The weakness in the month of May has produced some serious technical damage to most of the stocks in the sector and most of them have bearish Point & Figure chart sell signals. Yet that doesn't mean we can't catch an oversold bounce higher for a quick play. What makes this rebound even more attractive is that some of the biggest companies in this group are due to report earnings in about three weeks and it is not uncommon for them to produce a pre-earnings run up. Shares of GS are bouncing from its intraday bullish reversal near $140 on Wednesday. We would consider this a little bit more aggressive since GS still has not broken out past its descending 10-dma. Our target is the $153.50-154.00 range. We're also keeping an eye on BSC and LEH for potential plays.

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

BUY CALL JUN 145.00 GS-FI open interest=2679 current ask $6.00
BUY CALL JUN 150.00 GS-FJ open interest=7226 current ask $3.30

Picked on May 25 at $147.32
Change since picked: + 0.00
Earnings Date 06/13/06 (confirmed)
Average Daily Volume = 4.5 million

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Halliburton - HAL - close: 73.80 chg: +3.77 stop: 68.65

Company Description:
Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and KBR. (source: company press release or website)

Why We Like It:
We are going to try again with the oil stocks. The OIX oil index is bouncing from technical support near its rising 200-dma. The OSX oil services index never fell much past its 100-dma and it appears to be turning around. Lending strength to the group is a rally in crude oil back to $71.00 a barrel. HAL is one of the biggest oil service companies in the world so if the oil stocks catch fire again HAL should be leading the charge. Currently shares of HAL are bouncing after spending four days consolidating above support at its rising 200-dma. Should the stock traded over $74.00 it will produce a new Point & Figure chart buy signal. We are going to target a move back into the $80.00-82.00 range. Please note that HAL is due to split 2-for-1 on July 17th.

Suggested Options:
We are suggesting the June or July calls. Right now our preference would be for Julys.

BUY CALL JUN 70.00 HAL-FN open interest=2380 current ask $5.00
BUY CALL JUN 72.50 HAL-FA open interest=1358 current ask $3.30
BUY CALL JUN 75.00 HAL-FO open interest=7277 current ask $2.05
BUY CALL JUN 80.00 HAL-FP open interest=6933 current ask $0.65

BUY CALL JUL 70.00 HAL-GN open interest=13903 current ask $6.60
BUY CALL JUL 72.50 HAL-GA open interest= 4938 current ask $5.20
BUY CALL JUL 75.00 HAL-GO open interest=14963 current ask $3.90
BUY CALL JUL 80.00 HAL-GP open interest=21460 current ask $2.05

Picked on May 25 at $ 73.80
Change since picked: + 0.00
Earnings Date 07/20/06 (unconfirmed)
Average Daily Volume = 7.1 million

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Holly Corp. - HOC - close: 81.20 chg: +4.75 stop: 75.95

Company Description:
Holly Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel and jet fuel. Holly operates through its subsidiaries a 75,000 barrels per day ("bpd") refinery located in Artesia, New Mexico and a 26,000 bpd refinery in Woods Cross, Utah. Holly also owns a 45% interest (including the general partner interest) in Holly Energy Partners, L.P. (source: company press release or website)

Why We Like It:
HOC is another oil stock we're adding to the play list as a call candidate. What makes HOC interesting is that shares held up better than a lot of its peers during the oil-sector profit taking over the last few weeks. Now that the market and the oil sectors are bouncing shares of HOC are breaking out over resistance at its trendline of lower highs. The MACD is near a new buy signal and short-term technicals look positive. The P&F chart points to a $96.00 target. The one item that concerns us is HOC's upcoming stock split. Shares are due to split 2-for-1 on June 2nd. Now in the past stocks tend to rise into their split and then see a post-split depression. Plus, stocks tend to be less volatile post-split and that's not great for our options. We're going to go forward with HOC as a candidate but keep these things in mind. Our target will be the $89.00-90.00 range or 44.50-45.00 post-split.

Suggested Options:
We are suggesting the June and July options. We prefer Julys.

BUY CALL JUN 80.00 HOC-FP open interest=551 current ask $4.00
BUY CALL JUN 85.00 HOC-FQ open interest=416 current ask $1.65

BUY CALL JUL 80.00 HOC-GP open interest= 21 current ask $6.20
BUY CALL JUL 85.00 HOC-GQ open interest=168 current ask $3.80

Picked on May 25 at $ 81.20
Change since picked: + 0.00
Earnings Date 08/07/06 (unconfirmed)
Average Daily Volume = 475 thousand

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iShares Global Energy - IXC - cls: 103.67 chg: +3.16 stop: 99.49

Company Description:
IXC is an ETF or exchange traded fund provided by S&P to track energy and oil.

Why We Like It:
Instead of suggesting a call position on one individual energy stock we're going to suggest calls on the global energy iShares (IXC). This will protect us from any individual stock news from killing the position and give us exposure to any rebound in the sector. While we're not excited about the extremely low volume or the low option volume it's worth considering as a candidate. Technically the IXC has consistently found support at its rising 200-dma in the past and shares are bouncing from the 200-dma again. Short-term technicals are turning positive. We are going to suggest calls with the IXC above $102.00. More conservative traders may want to wait for a move over $104.50 or $105.00 before initiating positions. Our target will be the $110.00-112.00 range.

Suggested Options:
We are suggesting the June or July calls. While Junes have more open interest for time reasons we'd prefer the Julys.

BUY CALL JUN 100.00 IXC-FT open interest=30 current ask $5.70
BUY CALL JUN 105.00 IXC-FA open interest=64 current ask $2.15

BUY CALL JUL 100.00 IXC-GT open interest= 0 current ask $7.20
BUY CALL JUL 105.00 IXC-GA open interest= 0 current ask $4.20
BUY CALL JUL 110.00 IXC-GB open interest= 0 current ask $2.20

Picked on May 25 at $103.67
Change since picked: + 0.00
Earnings Date 00/00/00 (unconfirmed)
Average Daily Volume = 47 thousand

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Priceline.com - PCLN - close: 30.67 chg: +1.35 stop: 29.25

Company Description:
Priceline.com is the leading travel service for value-conscious leisure travelers. No other travel service gives customers more ways to save on their airline tickets, hotel rooms, rental cars, vacation packages and cruises. In addition to getting all the best published prices, leisure travelers can narrow their searches using priceline.com's TripFilter(TM) advanced search technology, create packages to save even more money, and take advantage of priceline.com's famous Name Your Own Price service, which delivers the lowest prices available. (source: company press release or website)

Why We Like It:
The INX Internet index produced a big bullish breakout today. The INX pushed through resistance at 215, the 200-dma and the 220 level. Fueling the move were big gains in EBAY and YHOO. A 4.6% breakout in PCLN didn't hurt either. If the INX sector continues to rebound we want to ride the wave with PCLN. Shares of PCLN have been showing relative strength over the last month. Early in May shares soared on a strong earnings report and upside guidance. During the May sell-off the stock merely consolidating sideways. Now PCLN is breaking out again. The P&F chart points to a $50.00 target. We are suggesting calls with PCLN above $30.00. Our target will be the $34.50-35.00 range.

Suggested Options:
We are suggesting the July calls.

BUY CALL JUL 30.00 PUZ-GF open interest=1364 current ask $2.00
BUY CALL JUL 35.00 PUZ-GG open interest= 95 current ask $0.40

Picked on May 25 at $ 30.67
Change since picked: + 0.00
Earnings Date 08/02/06 (unconfirmed)
Average Daily Volume = 432 thousand
 

New Puts

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New Strangles

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