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New Calls

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New Puts

Alcon Inc. - ACL - close: 95.61 chg: -3.71 stop: 100.05

Company Description:
Alcon, Inc. is the world's leading eye care company with sales of $4.4 billion in 2005. Alcon, which has been dedicated to the ophthalmic industry for more than 50 years, develops, manufactures and markets pharmaceuticals, surgical equipment and devices, contacts lens care solutions and other vision care products that treat diseases, disorders and other conditions of the eye. (source: company press release or website)

Why We Like It:
Historically investors tend to run toward drug-related stocks as "safe haven" plays in times of turmoil. Not this time - at least not with ACL. The stock lost 3.7% on above average volume today to make a new two-month low. The move produced a new Point & Figure chart sell signal that currently points to a $91 target but we expect that to fall even lower. We are suggesting that traders open put plays with ACL under $98.00. More conservative traders might want to wait for a decline under $95.00 or the late April low near $94.44 before initiating positions. We're suggesting two targets. Our conservative target is the $90.50 mark. Our aggressive target is the $87.00-85.00 range. We do not want to hold over the July 24th earnings report so we don't have a lot of time.

Suggested Options:
We are suggesting the August puts.

BUY PUT AUG 100.00 ACL-TT open interest=1849 current ask $6.90
BUY PUT AUG 95.00 ACL-TS open interest=1933 current ask $4.30
BUY PUT AUG 90.00 ACL-TR open interest= 949 current ask $2.45

Picked on July 13 at $ 95.61
Change since picked: + 0.00
Earnings Date 07/24/06 (confirmed)
Average Daily Volume = 805 thousand
 

New Strangles

None today.
 

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