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New Calls

None today.
 

New Puts

Manpower Inc. - MAN - close: 59.42 chg: -2.41 stop: 62.25

Company Description:
Manpower Inc. is a world leader in the employment services industry; creating and delivering services that enable its clients to win in the changing world of work. The $16 billion company offers employers a range of services for the entire employment and business cycle including permanent, temporary and contract recruitment; employee assessment and selection; training; outplacement; outsourcing and consulting. Manpower's worldwide network of 4,400 offices in 72 countries and territories enables the company to meet the needs of its 400,000 clients per year, including small and medium size enterprises in all industry sectors, as well as the world's largest multinational corporations. (source: company press release or website)

Why We Like It:
In the last two days MAN has produced a failed rally under its 50-dma and a breakdown under support at the $60.00 level. Both events occurred on big volume. The early strength on Wednesday was probably fueled by MAN's recent earnings report, which came in better than expected. Unfortunately, the buying spree was short lived. Now he stock is breaking down and the next level of support looks like the $55.00 region with its rising 200-dma (54.77). We are suggesting that readers buy puts with MAN under $60.00. Our target is the $55.50-55.00 range. The Point & Figure chart currently points to a $52 target.

Suggested Options:
We are suggesting the August and September puts. You choose which month and strike best suits your trading style. (currently there are no August 55 puts available)

BUY PUT AUG 60.00 MAN-TL open interest=115 current ask $2.80

BUY PUT SEP 60.00 MAN-UL open interest=173 current ask $3.30
BUY PUT SEP 55.00 MAN-UK open interest= 96 current ask $1.35

Picked on July 20 at $ 59.42
Change since picked: + 0.00
Earnings Date 07/19/06 (confirmed)
Average Daily Volume = 1.0 million

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Union Pacific - UNP - close: 84.01 chg: -3.39 stop: 87.01

Company Description:
Union Pacific Corporation owns one of America's leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country and serves the fastest-growing U.S. population centers. (source: company press release or website)

Why We Like It:
The gap higher in shares of UNP this morning was probably due to the company's earnings report. UNP reported earnings that came in 11 cents above analysts' estimates. Yet the rally reversed right at the $90.00 level and under its 50-dma. The selling continued throughout the session and UNP eventually broke down under technical support at its 200-dma with volume coming in way above the average. Today's move also produced a failed rally, a breakdown of support, and a new sell signal on the P&F chart, which now points to a $74 target. Normally you want to see some confirmation or follow through after a stock produces a big bearish engulfing candlestick pattern like UNP did today. That's why we're suggesting a trigger to buy puts at $83.75, which is underneath the June low. If triggered we're suggesting two targets. Our conservative target will be the $80.10 level. Our more aggressive target will be the $77.65 mark.

Suggested Options:
We are suggesting the August puts. Septembers are not available yet but if you're interested Novembers are available.

BUY PUT AUG 85.00 UNP-TQ open interest=1953 current ask $3.10
BUY PUT AUG 80.00 UNP-TP open interest= 586 current ask $1.15

Picked on July xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/20/06 (confirmed)
Average Daily Volume = 1.7 million
 

New Strangles

None today.
 

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