Option Investor
New Plays

New Option Plays

HAVING TROUBLE PRINTING?
Printer friendly version
Call Options Plays
Put Options Plays
Strangle Options Plays
ANDEAZONone
 CYT 
 RDN 

New Calls

The Andersons - ANDE - close: 39.48 chg: +0.54 stop: 37.49

Company Description:
The Andersons, Inc. is a diversified company with interests in the grain & ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar leasing, industrial products formulation, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now has operations in seven U.S. states plus rail equipment leasing interests in Canada and Mexico. (source: company press release or website)

Why We Like It:
Shares of ANDE caught our eye on Wednesday with the bullish breakout over its simple 50-dma and the big spike in volume. The move also appears to be a breakout above its four-month trendline of resistance (see chart). The stock continued to drift higher this past week while most of the market was drifting flat to down. Bigger picture chart readers will notice that ANDE is bouncing from technical support at its 200-dma. Meanwhile the P&F chart, while bearish, is also bouncing from support and the recent sell signal may have been a bear trap. ANDE now looks poised to breakout over resistance at the $40.00 level. We are suggesting a trigger to buy calls at $40.25. If triggered our target is the $44.50-45.00 range.

Suggested Options:
We are suggesting the October calls.

BUY CALL OCT 35.00 AQA-JG open interest= 11 current ask $6.30
BUY CALL OCT 40.00 AQA-JH open interest=203 current ask $3.10

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/27/06 (unconfirmed)
Average Daily Volume = 900 thousand
 

New Puts

AutoZone - AZO - close: 87.21 change: +0.81 stop: 89.05

Company Description:
As of May 6, 2006, AutoZone sells auto and light truck parts, chemicals and accessories through 3,699 AutoZone stores in the United States and 92 AutoZone stores in Mexico and also sells the ALLDATA brand automotive diagnostic and repair software. (source: company press release or website)

Why We Like It:
It's back! We tried playing AZO as a put candidate a couple of weeks ago but there was no follow through to the downside. Now the stock has produced a bearish double-top pattern near resistance around the $90 level and shares are seeing new selling pressure. Friday the stock did bounce from its August low near $86.00 but we think it's temporary. Most of the technical indicators are bearish and the P&F chart points to a $72 target. We are suggesting a trigger to buy puts at $85.85. Our target is the $81.00-80.00 range. FYI: More aggressive traders might want to consider new put positions right here or anywhere under $89.

Suggested Options:
We are suggesting the October puts but we do not want to hold over AZO's late September earnings report.

BUY PUT OCT 90.00 AZO-VR open interest=139 current ask $4.80
BUY PUT OCT 85.00 AZO-VQ open interest= 74 current ask $2.35

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 09/21/06 (unconfirmed)
Average Daily Volume = 663 thousand

---

Cytec Ind. - CYT - close: 50.24 change: -0.54 stop: 52.05

Company Description:
Cytec Industries Inc. is a global specialty chemicals and materials company focused on developing, manufacturing and selling value-added products with pro forma sales in 2005 of approximately $3.2 billion. (source: company press release or website)

Why We Like It:
The sideways consolidation in CYT over the last three months appears to be nearing an end. The stock has a short-term bearish trend of lower highs and earlier this month shares broke down under technical support at the 200-dma. Now the stock is clinging to round-number support at the $50.00 level. The Point & Figure chart is already bearish with a $42.00 target. Should CYT trade under $50 it should produce a new triple-bottom breakdown sell signal. We are suggesting a trigger to buy puts at $49.75. If triggered our target is the $45.50-45.00 range. We do not want to hold over the mid October earnings report.

Suggested Options:
We are suggesting the October puts.

BUY PUT OCT 55.00 CYT-VK open interest= 37 current ask $5.10
BUY PUT OCT 50.00 CYT-VJ open interest=130 current ask $1.75
BUY PUT OCT 45.00 CYT-VI open interest= 0 current ask $0.50

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 241 thousand

---

Radian Group - RDN - close: 59.63 chg: -1.65 stop: 61.51

Company Description:
Radian Group Inc. is a global credit risk management company headquartered in Philadelphia with significant operations in both New York and London. Radian develops innovative financial solutions by applying its core mortgage credit risk expertise and structured finance capabilities to the credit enhancement needs of the capital markets worldwide, primarily through credit insurance products. (source: company press release or website)

Why We Like It:
On your mark. Get set. Go! Shares of RDN have essentially traded sideways, albeit in a wide range, over the last several months. This consolidation and what appears to be a bearish double-top pattern follows a significant rally from its October 2005 lows. We didn't see any specific news to account for the move but Friday saw RDN lose 2.69% on above average volume. Friday's decline was also a breakdown below round-number support at $60.00 and technical support at its three-month trendline of higher lows. Friday's decline looks like the entry point to buy puts. However, RDN does have potential technical support at its rising 200-dma currently at 59.40. Therefore we're suggesting a trigger to buy puts at $58.99. If triggered our target is the $55.15-55.00 range. We do not want to hold over the mid October earnings report.

Suggested Options:
We are suggesting the October puts although Novembers would also work well.

BUY PUT OCT 65.00 RDN-VM open interest= 0 current ask $5.90
BUY PUT OCT 60.00 RDN-VL open interest= 0 current ask $2.55
BUY PUT OCT 55.00 RDN-VK open interest= 0 current ask $1.05

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/18/06 (unconfirmed)
Average Daily Volume = 722 thousand
 

New Strangles

None today.
 

New Play Archives