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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
BZH CAT None
  JEC  
  JOYG  
  LVS  
  NUE  
  STLD  
  WYNN  

New Calls

Beazer Homes - BZH - close: 39.60 change: +0.85 stop: 37.90

Company Description:
Beazer Homes USA Beazer Homes USA, headquartered in Atlanta, Georgia, combines the capabilities of a national company with the knowledge and insight of the best local professionals. Beazer currently builds in over 40 markets in the Southeast, Mid-Atlantic, Midwest, West and Central United States. (source: company press release or website)

Why We Like It:
It looks like the homebuilders may have finally put in a significant bottom over the last couple of months. The group has been bouncing lately due to improving consumer confidence, a huge pull back in crude oil prices, and tame inflation data. If the FOMC passes on raising rates this week it will be another positive sign for the homebuilders. Some market pundits are actually talking about rate cuts early next year. That would keep mortgage rates relatively low and improve sales for the homebuilders. There has already been a parade of earnings warnings for the sector so it looks like all the bad news is already out. The group could easily see more buying since they look like bargains with many of the homebuilders down 50% or more from their highs. We like BZH as a potential call candidate with the stock's bullish double-bottom pattern. Another positive is the rising volume on the recent bounce. We're going to suggest that readers wait for a bullish breakout over technical resistance at the descending 50-dma. Our trigger will be at $40.75. More conservative traders may want to wait for a move over $41.00 first. If triggered our target is the $46.00-47.00 range. We do not want to hold over the November earnings report.

Suggested Options:
We are suggesting the October and/or November calls. You, the individual trader, should choose which month and strike price best suits your trading style and risk. Don't forget that October options expire in five weeks.

BUY CALL OCT 35.00 BZH-JG open interest= 320 current ask $5.40
BUY CALL OCT 40.00 BZH-JH open interest=1562 current ask $2.05
BUY CALL OCT 45.00 BZH-JI open interest= 883 current ask $0.50

BUY CALL NOV 35.00 BZH-KG open interest= 573 current ask $6.10
BUY CALL NOV 40.00 BZH-KH open interest= 928 current ask $2.85
BUY CALL NOV 45.00 BZH-KI open interest=1873 current ask $1.05

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.2 million
 

New Puts

Caterpillar - CAT - close: 65.43 chg: -0.08 stop: 67.36

Company Description:
For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2005 sales and revenues of $36.339 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. (source: company press release or website)

Why We Like It:
The Dow Jones Industrial Average may be nearing a new high but shares of Dow-component CAT are certainly not participating in the rally. CAT has a bearish trend of lower highs and looks poised to breakdown under significant support near $65.00. The Point & Figure chart is already bearish and points to a $48 target. We are suggesting that traders wait for a new relative low before opening positions. Our entry point will be a trigger at $64.59, which is under last week's low. If triggered our short-term target is the $60.25-60.00 range.

Suggested Options:
We are suggesting the October options. Please note the October strikes expire in five weeks. We do not want to hold over CAT's earnings report in October.

BUY PUT OCT 67.50 CAT-VU open interest=5260 current ask $3.50
BUY PUT OCT 65.00 CAT-VM open interest=5600 current ask $2.10
BUY PUT OCT 62.50 CAT-VZ open interest=3808 current ask $1.15
BUY PUT OCT 60.00 CAT-VL open interest=3450 current ask $0.55

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/20/06 (unconfirmed)
Average Daily Volume = 5.2 million

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Jacobs Engineering - JEC - cls: 79.98 chg: -2.25 stop: 82.26

Company Description:
Jacobs, with over 42,000 employees and revenues approaching $7.0 billion, provides technical, professional, and construction services globally. (source: company press release or website)

Why We Like It:
The July-August rally in JEC is over. The stock has failed near resistance in the $87.50-88.00 range with what looks like a double-top pattern. This past week saw JEC plunge under support near $82.00 and its 50-dma. Now the stock is poised to breakdown under support near $80.00, its 100-dma and 200-dma. Volume on Friday's decline was pretty strong. Aggressive traders may want to enter put positions here or on a failed rally under $82. We want to see more confirmation lower so we're suggesting a trigger to buy puts at $79.45. If triggered our target is the $72.50-70.00 range. This coincides with the bearish P&F chart that points to a $72 target. We do not want to hold over the early November earnings report.

Suggested Options:
For the moment we don't see any November options available so that leaves us with October strikes, which expire in five weeks.

BUY PUT OCT 85.00 JEC-VQ open interest=563 current ask $6.00
BUY PUT OCT 80.00 JEC-VP open interest=526 current ask $2.95
BUY PUT OCT 75.00 JEC-VO open interest=596 current ask $1.15

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 416 thousand

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Joy Global - JOYG - close: 36.28 change: -0.06 stop: 37.51

Company Description:
Joy Global Inc. is a worldwide leader in manufacturing, servicing and distributing equipment for surface mining through P&H Mining Equipment and underground mining through Joy Mining Machinery. (source: company press release or website)

Why We Like It:
In spite of some positive analyst comments and news that the company was raising their stock buy back program, shares of JOYG are still sliding toward support near $35.00. The stock surged higher a couple of weeks ago but end the end gave it all back in spite of the major indices hitting new four-year highs. We suspect that the next move will be lower. However, JOYG has to breakdown under support at the $35.00 level first. Therefore we're suggesting a trigger to buy puts at $34.95. If triggered our target is the $30.50-30.00 range.

Suggested Options:
We would prefer to play November options but don't see any available at this time. January strikes are available but that might be overkill. That leaves us with Octobers.

BUY PUT OCT 40.00 JQY-VH open interest=4135 current ask $4.70
BUY PUT OCT 35.00 JQY-VG open interest=2616 current ask $1.70
BUY PUT OCT 30.00 JQY-VF open interest=1257 current ask $0.50

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/30/06 (unconfirmed)
Average Daily Volume = 2.6 million

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Las Vegas Sands - LVS - close: 67.71 change: -0.73 stop: 70.05

Company Description:
The Las Vegas, Nevada-based company owns The Venetian Resort Hotel Casino and the Sands Expo and Convention Center in Las Vegas and the Sands Macao in the People's Republic of China (PRC) Special Administrative Region of Macao. The company is currently constructing two additional integrated resorts both scheduled to open in 2007: The Palazzo Resort Hotel Casino in Las Vegas and The Venetian Macao Resort Hotel Casino in Macao. (source: company press release or website)

Why We Like It:
You know how the saying goes..."If at first you don't succeed try, try again." We're going to try again with LVS. The stock's rally on Tuesday never saw any follow through higher and the Tuesday-Wednesday move is a very clear bearish reversal. The late week slide lower has produced a new MACD sell signal on the daily chart. Plus, volume has been coming in at above average levels during the Wednesday-Friday declines. We are fighting against a bullish P&F chart but suspect LVS can still decline toward support near its 200-dma. We're going to set a trigger to buy puts at $65.99. If triggered our target is the $60.50-60.00 range. We do not want to hold over the early November earnings report.

Suggested Options:
We are suggesting the October puts. Please note that the October options expire in five weeks.

BUY PUT OCT 70.00 LVS-VN open interest= 708 current ask $4.50
BUY PUT OCT 65.00 LVS-VM open interest= 864 current ask $2.05
BUY PUT OCT 60.00 LVS-VL open interest=1108 current ask $0.75

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/01/06 (unconfirmed)
Average Daily Volume = 2.2 million

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Nucor - NUE - close: 46.76 change: +0.10 stop: 50.01

Company Description:
Nucor and affiliates are manufacturers of steel products, with operating facilities in seventeen states. Products produced are: carbon and alloy steel -- in bars, beams, sheet and plate; steel joists and joist girders; steel deck; cold finished steel; steel fasteners; metal building systems; and light gauge steel framing. Nucor is the nation's largest recycler. (source: company press release or website)

Why We Like It:
A lot of the metal/iron/steel stocks were sold off on the commodity selling recently. The weakness in NUE has produced a bearish breakdown from a pennant type formation of higher lows and lower highs. The breakdown has not seen a lot of follow through yet as it hugs the 200-dma but we see the lack of follow through as an opportunity. Aggressive traders can open put positions with the stock under $50.00 or $48.00. We're going to suggest a trigger to buy puts at $45.95, which is under short-term support at $46.00. If triggered our target is the $40.50-40.00 range. The P&F chart has a relatively new triple-bottom breakdown sell signal with a $41 target. We do not want to hold over the mid October earnings report.

Suggested Options:
We are suggesting the October puts. Remember, you should choose which month and strike price best suits your trading style and risk.

BUY PUT OCT 50.00 NUE-VJ open interest=7377 current ask $5.00
BUY PUT OCT 47.50 NUE-VW open interest=5713 current ask $3.30
BUY PUT OCT 45.00 NUE-VI open interest=5154 current ask $1.95
BUY PUT OCT 42.50 NUE-VV open interest=2547 current ask $1.10
BUY PUT OCT 40.00 NUE-VH open interest=2460 current ask $0.55

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 4.2 million

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Steel Dynamics - STLD - close: 50.93 chg: +0.30 stop: 52.05

Company Description:
Steel Dynamics, Inc. (SDI) is the nations fifth largest producer of carbon steel products, based on production capacity. Annual revenues exceed $2 billion, with annual shipments at a rate surpassing 4 million tons per year. SDI employees number about 3,300. (source: company press release or website)

Why We Like It:
STLD is another steel stock that we think will see a breakdown relatively soon. Shares have a bearish pattern of lower highs and the P&F chart is bearish with a $42 target. Currently the stock is flirting with support in the $49.50-50.00 region and its 200-dma. We're suggesting a trigger to buy puts at $49.40. If triggered our target is the $45.15-45.00 range. We do not want to hold over the mid October earnings report.

Suggested Options:
We are suggesting the October puts but November puts would also work well, just remember we want to exit ahead of STLD's earnings report. Our trigger is $49.40.

BUY PUT OCT 50.00 RQL-VJ open interest=981 current ask $2.65
BUY PUT OCT 45.00 RQL-VI open interest=826 current ask $1.00

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/19/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Wynn Resorts - WYNN - close: 73.10 chg: -2.47 stop: 76.61

Company Description:
Wynn Resorts, Limited is traded on the Nasdaq National Market under the ticker symbol WYNN and is part of the NASDAQ-100 Index. On September 6, 2006, Wynn Macau, a destination casino resort in the Macau Special Administrative Region of the People's Republic of China, opened, featuring 600 deluxe hotel rooms and suites, approximately 220 table games and 380 slot machines in approximately 100,000 square feet of casino gaming space, seven restaurants, approximately 26,000 square feet of retail space, a spa, a salon, entertainment lounges and meeting facilities. Additionally, the Company owns and operates Wynn Las Vegas, a luxury hotel and destination casino resort located on the Las Vegas Strip. (source: company press release or website)

Why We Like It:
The August rally in WYNN stalled out before the stock could reach its 2006 highs near $80.00. Shares struggled with new resistance at $78 and spent over four weeks consolidating sideways under the $78 level. This past week we began to see signs of weakness with volume surging on the declines. WYNN has been somewhat volatile the last few days but Friday's failed rally and bearish engulfing candlestick looks like a new entry point to buy puts. The P&F chart is already bearish with a $67 target. The short-term technical indicators and most of the weekly indicators have all turned bearish. We are suggesting puts right here with the stock under $75.00. More conservative traders may want to wait for a decline under the 50-dma (near 72.05) before opening new positions. Our target is the $68.50-68.00 range, which takes into account potential support at the rising 200-dma. Aggressive traders may want to aim lower.

Suggested Options:
We are suggesting the October puts. We would prefer November options but none are available. If you're inclined December strikes are available. Remember that October options expire in five weeks.

BUY PUT OCT 75.00 UWY-VO open interest= 4031 current ask $4.50
BUY PUT OCT 70.00 UWY-VN open interest=11268 current ask $2.25

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/31/06 (unconfirmed)
Average Daily Volume = 1.3 million
 

New Strangles

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