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None NIHD None
  RIG  

New Calls

None today.
 

New Puts

Editor's note: If you have not yet read the market wrap for this weekend please read it first. Our market bias is growing bearish and while there could be some intraday strength on Monday and Tuesday this week we believe the end result following the FOMC meeting on Tuesday will be a move lower in the markets. Stocks are likely to just hover sideways the next two days as investors wait for the Fed's decision on interest rates Tuesday afternoon. Because of the FOMC meeting we've decided to limit the number of new plays this weekend and we don't expect to add any new plays on Monday. However, some traders may want to prepare early for opening new bearish positions. Therefore we're listing several stocks that we'll be watching as potential bearish candidates. Some of these you'll want to watch for a breakdown while others you'll want to watch for a bounce and failed-rally sort of entry point. Here's a partial list of candidates that we'll be watching the next two days: AAPL, AGN, AZO, BNI, CRS, DE, GRMN, HAR, IPS, ISRG, RTP, SHLD, UNP.

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NII Holdings - NIHD - close: 50.83 chg: 0.29 stop: 52.51

Company Description:
NII Holdings, Inc., a publicly held company based in Reston, Va., is a leading provider of mobile communications for business customers in Latin America. NII Holdings, Inc. has operations in Argentina, Brazil, Mexico and Peru, offering a fully integrated wireless communications tool with digital cellular service, text/numeric paging, wireless Internet access and Nextel Direct Connect, a digital two-way radio feature. (source: company press release or website)

Why We Like It:
NIHD's rebound from the June low failed at resistance near $58.00 in early July. Ever since the stock has been consolidating sideways above support at the $50 level and its 200-dma. Now the stock looks poised to breakdown again. Shares are under the 200-dma and testing the $50 mark. Daily and weekly technicals are bearish but we do note that the P&F chart is still bullish. We are suggesting that readers use a trigger at $49.90 to buy puts and catch a breakdown under support. NIHD does have additional support near $47.50 on both the daily chart and the P&F chart but the next significant level of support appears to be $45.00 (see chart below). Our target is the $45.50-45.00 range.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 55.00 QHQ-UK open interest= 429 current ask $5.40
BUY PUT SEP 50.00 QHQ-UJ open interest=1137 current ask $2.30
BUY PUT SEP 45.00 QHQ-UI open interest= 625 current ask $0.75

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 07/27/06 (confirmed)
Average Daily Volume = 2.2 million

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Transocean Inc. - RIG - cls: 70.08 chg: -1.72 stop: 75.25

Company Description:
Transocean Inc. is the world's largest offshore drilling contractor with a fleet of 87 mobile offshore drilling units. The company's mobile offshore drilling fleet, consisting of a large number of high-specification deepwater and harsh environment drilling units, is considered one of the most modern and versatile in the world due to its emphasis on technically demanding segments of the offshore drilling business. The company's fleet consists of 33 High-Specification Floaters (semisubmersibles and drillships), 20 Other Floaters, 25 Jackups and other assets utilized in the support of offshore drilling activities worldwide. (source: company press release or website)

Why We Like It:
The oil services sector has been weak recently thanks in part to some heavy selling in shares of RIG. Investors were not happy with the company's recent earnings report. The stock has produced a failed rally at the $80 level and its 100-dma and sank past potential support at $75 and the 200-dma to fall towards support near $70. At this point the trend is bearish but RIG is so short-term oversold we're expecting a bounce early next week. Aggressive traders can use a failed rally under $75 as a new entry point to buy puts. We're going to suggest that readers actually wait for the breakdown under support at $70. Our trigger to buy puts is at $69.49, which is under Friday's low. We are suggesting two targets: a conservative target at $65.25 and a more aggressive target at $61.00. The P&F chart points to a $59 target.

Suggested Options:
We are suggesting the September puts. November puts would also work.

BUY PUT SEP 75.00 RIG-UO open interest=1749 current ask $6.50
BUY PUT SEP 70.00 RIG-UN open interest=5462 current ask $3.50
BUY PUT SEP 65.00 RIG-UM open interest=2621 current ask $1.55

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: 0.00
Earnings Date 08/03/06 (confirmed)
Average Daily Volume = 6.4 million
 

New Strangles

None today.
 

New Play Archives