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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
None CAT None
  SHLD  
  WFMI  

New Calls

None today.
 

New Puts

Caterpillar - CAT - close: 71.31 chg: -2.09 stop: 74.01

Company Description:
For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2005 sales and revenues of $36.339 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. (source: company press release or website)

Why We Like It:
The bounce in CAT has failed at the $75.00 level. Now the stock's momentum is reversing and its MACD on the daily chart is nearing a new sell signal. With the market selling off we suspect that CAT might dip back toward its simple 200-dma near $66.50. We're going to suggest put options with CAT under $72.00. Our target will be the $67.50-66.50 range. We do not want to hold over the company's earnings report on July 21st so this will be a short-term play.

Suggested Options:
Aggressive traders might consider trading the July options, which expire after Friday, July 21st. We're suggesting the August strikes.

BUY PUT AUG 72.50 CAT-TA open interest=4049 current ask $3.40
BUY PUT AUG 70.00 CAT-TN open interest=4799 current ask $2.20
BUY PUT AUG 67.50 CAT-TU open interest=6376 current ask $1.35

Picked on July 12 at $ 71.31
Change since picked: + 0.00
Earnings Date 07/21/06 (confirmed)
Average Daily Volume = 5.1 million

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Sears Holding - SHLD - close: 148.37 chg: -8.08 stop: 154.05

Company Description:
Sears Holdings Corporation is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,900 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance. (source: company press release or website)

Why We Like It:
There were new concerns today about a slow down in the American consumer. Investors responded by selling retail stocks. The RLX retail index fell 2.5%. Shares of SHLD lost over 5%. The drop today is a bearish engulfing candlestick pattern and a breakdown under support at $152, the 50-dma and the $150 level - all on above average volume. We are suggesting puts with SHLD under $150.00. Traders can choose to open positions now or wait for a possible bounce back toward $150 or the 50-dma (near 152.60). Our short-term target is the $142.00-140.00 range. That doesn't give us the best risk-reward ratio since we're using a stop loss above $154.

Suggested Options:
We are suggesting the August puts.

BUY PUT AUG 150.00 KTQ-TU open interest=2091 current ask $7.20
BUY PUT AUG 145.00 KTQ-TV open interest= 310 current ask $5.00

Picked on July 12 at $148.37
Change since picked: + 0.00
Earnings Date 08/17/06 (unconfirmed)
Average Daily Volume = 1.9 million

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Whole Foods - WFMI - close: 61.20 chg: -1.86 stop: 64.01

Company Description:
Founded in 1980 in Austin, Texas, Whole Foods Market is the world's leading natural and organic foods supermarket and America's first national certified organic grocer. In fiscal year 2005, the company had sales of $4.7 billion and currently has more than 180 stores in the United States, Canada, and the United Kingdom. (source: company press release or website)

Why We Like It:
WFMI is another retailer that took a beating today losing 2.9%. If the consumer really is pulling back then a high-end, luxury grocer like WFMI could be hurt by it. The action over the last few months looks like a bearish head-and-shoulders pattern. Meanwhile technicals are turning bearish with the MACD on the verge of a new sell signal. We are suggesting puts here with WFMI under $62.00 but more conservative traders might want to wait for a drop under $60.00 or the June low (59.42). Our target is the $56.00-55.00 range. The P&F chart points to a $43 target. We do not want to hold over the late July earnings report.

Suggested Options:
We are suggesting the August puts.

BUY PUT AUG 65.00 FMQ-TM open interest=2696 current ask $5.30
BUY PUT AUG 60.00 FMQ-TL open interest=5731 current ask $2.55
BUY PUT AUG 55.00 FMQ-TK open interest=3715 current ask $1.00

Picked on July 12 at $ 61.20
Change since picked: + 0.00
Earnings Date 07/31/06 (confirmed)
Average Daily Volume = 1.4 million
 

New Strangles

None today.
 

New Play Archives