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New Option Plays

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Call Options Plays
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Strangle Options Plays
BUCY None None
GS    
MSTR    

New Calls

Bucyrus - BUCY - close: 51.87 chg: +3.39 stop: 47.69

Company Description:
Bucyrus International, Inc. designs, manufactures and markets draglines, electric mining shovels and rotary blasthole drills used for surface mining. In addition, Bucyrus provides OEM parts and services for those machines. Bucyrus' corporate offices are located in South Milwaukee, Wisconsin, USA. (source: company press release or website)

Why We Like It:
The market's two-day rally on tamer than expected inflation news has really fueled a strong move in BUCY. The stock has broken out above resistance at its 100-dma in addition to resistance near the top of its range near $51.00. Today's breakout was fueled on strong volume and the move also looks like a bullish breakout from an inverse head-and-shoulders pattern. Short-term technicals have turned positive again and its P&F chart has produced a new triple-top breakout buy signal with a $65 target. Readers can choose to buy calls here or wait for a potential dip back towards $51 or $50, which may not be a bad idea after such a big two-day move. BUCY appears to have some resistance near $58.00 and again near $60.00. We're going to target a run up into the $57.50-60.00 range. Our stop is under today's low.

Suggested Options:
We are suggesting the September or October calls. You choose which strike and month best suits your trading style.

BUY CALL SEP 50.00 HBU-IJ open interest=190 current ask $4.50
BUY CALL SEP 55.00 HBU-IK open interest=279 current ask $2.10

BUY CALL OCT 50.00 HBU-JJ open interest=540 current ask $6.30
BUY CALL OCT 55.00 HBU-JK open interest=987 current ask $3.90

Picked on August 16 at $ 51.87
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 697 thousand

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Goldman Sachs - GS - close: 154.99 chg: +2.34 stop: 149.40

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. (source: company press release or website)

Why We Like It:
The XBD Broker-dealer index helped lead the financial stocks higher on Wednesday. The XBD is also poised to breakout over technical resistance at its 100-dma. Meanwhile shares of GS have already broken out over its 100-dma and the stock looks ready to produce a new leg higher with today's gain and move over its one-week trend of lower highs. We are suggesting calls with GS above $152.50. More conservative traders may want to wait for a move over the August high near $156.30 before initiating plays. Our conservative target is $160.00. Our secondary target is the $164.50 level. Consider selling half your position at $160 and the rest at $164.50. We do not want to hold over the late September earnings report. FYI: The P&F chart points to a $190 target.

Suggested Options:
We are suggesting the September calls.

BUY CALL SEP 150.00 GPY-IJ open interest=1412 current ask $8.40
BUY CALL SEP 155.00 GPY-IK open interest=6633 current ask $5.20
BUY CALL SEP 160.00 GPY-IL open interest=4210 current ask $2.70

Picked on August 16 at $154.99
Change since picked: + 0.00
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 5.3 million

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MicroStrategy - MSTR - close: 90.08 chg: +2.32 stop: 85.99

Company Description:
Founded in 1989, MicroStrategy is a global leader in business intelligence (BI) technology. MicroStrategy provides integrated reporting, analysis, and monitoring software that helps leading organizations worldwide make better business decisions every day. Companies choose MicroStrategy for its advanced technical capabilities, sophisticated analytics, and superior data and user scalability. (source: company press release or website)

Why We Like It:
The GSO software index has seen a huge bullish breakout this week. While we think the group looks ready for a minor consolidation to digest these gains the new short-term trend definitely looks bullish. If that's the case then shares of MSTR could be poised to breakout from its bearish channel. Aggressive traders may want to buy calls now above $90 or above today's high near $90.50. We still see potential resistance at its 200-dma (near $91) and the August highs near $92.00. Therefore we're suggesting a trigger to buy calls on MSTR at $92.05. If triggered our target is the $98.75-99.00 range. Traders need to be aware that the 100-dma, currently near 94.70, may also be another level of overhead resistance. The P&F chart is currently bullish with a $106 target but MSTR has significant resistance on its P&F chart near $91.

Suggested Options:
We are suggesting the September calls.

BUY CALL SEP 90.00 EOU-IR open interest=460 current ask $4.50
BUY CALL SEP 95.00 EOU-IS open interest=620 current ask $2.25

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/27/06 (unconfirmed)
Average Daily Volume = 431 thousand
 

New Puts

None today.
 

New Strangles

None today.
 

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