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New Calls

None today.
 

New Puts

Chipotle - CMG - close: 49.80 change: -2.58 stop: 52.61

Company Description:
Chipotle Mexican Grill offers a focused menu of burritos, tacos, burrito bols (a burrito without the tortilla) and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in a distinctive atmosphere. Through our vision of Food with Integrity, Chipotle is seeking better food not only from a variety of fresh ingredients, but ingredients that are sustainably grown and naturally raised with respect for the animals, the land, and the farmers who produce the food. Chipotle opened its first restaurant in 1993 and operates more than 530 restaurants. (source: company press release or website)

Why We Like It:
We are going to try again with CMG. The stock's bullish breakout attempt on September 21st has stalled and now reversed. CMG failed to push pat its five-month trendline of resistance (see chart). Today's relative weakness was fueled by strong volume and the close under a cloud of moving averages and round-number support at the $50.00 mark is bearish. The P&F chart has been bearish for a while and shows a bearish reversal under resistance. We are still a little worried that stocks may try and make one last attempt to hit new highs before the third quarter ends so more conservative traders may want to sit out until next week. We are going to suggest a trigger to buy puts at $49.45. If triggered our target is the $45.50-45.00 range. We do not want to hold over the late October earnings report. FYI: Traders may want to note that McDonalds (MCD) is trying to shed its stake in CMG and is offering a stock swap for its shareholders. MCD will allow investors to swap their MCD for shares of CMG at a 10% discount.

Suggested Options:
We are suggesting the November puts although Decembers, which have more open interest, would also work well.

BUY PUT NOV 50.00 CMG-WJ open interest= 67 current ask $3.80
BUY PUT NOV 45.00 CMG-WI open interest= 99 current ask $1.65

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/30/06 (unconfirmed)
Average Daily Volume = 459 thousand

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Monster - MNST - close: 35.28 change: -2.30 stop: 37.55

Company Description:
Founded in 1967, Monster Worldwide, Inc. is the parent company of Monster, the leading global online careers property. Headquartered in New York with approximately 4,200 employees in 36 countries, Monster Worldwide is a member of the S&P 500 Index and NASDAQ-100. (source: company press release or website)

Why We Like It:
Is this end-of-quarter flushing in MNST? The stock lost just over 6% on Wednesday on strong volume, which is normally a bearish sign. The stock has already struggled under a bearish pattern of lower highs for the last several weeks. The Point & Figure chart is bearish with a double-bottom breakdown sell signal and a $28 target. MNST has definitely been under performing the broader markets lately and we expect more weakness to come. Shares have significant support in the $35.00 region. The June 2006 low was $34.75. We are going to suggest a trigger to buy puts at $34.65. If triggered our target is the $30.50-30.00 range. If you study the weekly chart you'll notice a long-term trendline of support stretching out just above the $30 level. More conservative traders might want to exit earlier near $31.00. We do not want to hold over the late October earnings report.

Suggested Options:
We are suggesting the November puts but the Decembers, which have more open interest, would also work well.

BUY PUT NOV 40.00 BSQ-WH open interest= 58 current ask $5.50
BUY PUT NOV 35.00 BSQ-WG open interest= 99 current ask $2.25
BUY PUT NOV 30.00 BSQ-WF open interest= 13 current ask $0.65

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/25/06 (unconfirmed)
Average Daily Volume = 1.6 million
 

New Strangles

None today.
 

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