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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
CI None None
FLR    
FO    
KBH    
ROK    
VIP    

New Calls

CIGNA - CI - close: 118.99 change: +0.99 stop: 116.95

Company Description:
CIGNA Corporation and its subsidiaries constitute one of the largest publicly owned health and related benefits organizations in the United States. Its subsidiaries are major providers of employee benefits offered through the workplace, including health care products and services and group life, accident and disability insurance products. (source: company press release or website)

Why We Like It:
The market looks strong and we think stocks will continue to push higher. If that's the case then CI will likely breakout over resistance at the $120.00 level. We're suggesting a trigger to buy calls at $120.26. If triggered our target is the $126.00-128.00 range. Currently the P&F chart points to a $133 target. We do not want to hold over the November 1st earnings report.

Suggested Options:
We are suggesting the November calls. Our trigger is at $120.26. We don't want to hold over the earnings report.

BUY CALL NOV 115.00 CI-KC open interest=453 current ask $8.10
BUY CALL NOV 120.00 CI-KD open interest=669 current ask $5.20
BUY CALL NOV 125.00 CI-KE open interest=779 current ask $3.00

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/01/06 (confirmed)
Average Daily Volume = 1.3 million

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Fluor - FLR - close: 80.00 change: +1.13 stop: 77.95

Company Description:
Fluor Corporation provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. (source: company press release or website)

Why We Like It:
September was a rough month for FLR. The stock broke down under multiple levels of support into what looked like a big sell signal. Yet shares found new support near $74 and FLR has produced a mini-double bottom pattern over the last few weeks. Now shares are bouncing back and challenging old support, now new resistance, at the $80.00 level. Normally we'd probably look for a failed rally here but with the markets headed higher we're going to look for a bullish breakout. Our trigger to buy calls will be $80.26. If triggered our target is the $84.00-85.00 range. We're concerned that the 100-dma and 200-dma near $85 might be resistance. We also have to warn readers that the 50-dma near $82 could be resistance and that the P&F chart shows resistance near $83 (and a $91 target). We do not want to hold over the early November earnings report.

Suggested Options:
We're suggesting the November calls. Our trigger is at $80.26. We do not want to hold over earnings.

BUY CALL NOV 75.00 FLR-KO open interest=128 current ask $6.80
BUY CALL NOV 80.00 FLR-KP open interest=354 current ask $3.50
BUY CALL NOV 85.00 FLR-KQ open interest=631 current ask $1.40

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/06/06 (unconfirmed)
Average Daily Volume = 940 thousand

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Fortune Brands - FO - close: 76.03 chg: +1.23 stop: 73.99

Company Description:
Fortune Brands, Inc. is a leading consumer brands company with annual sales exceeding $8 billion. Its operating companies have premier brands and leading market positions in home and hardware products, spirits and wine, and golf equipment. (source: company press release or website)

Why We Like It:
This is a short-term play. We have less than two weeks before FO is expected to report earnings. The stock has a bullish pattern of rising lows and shares have been trying to breakout over resistance near $76 and its 200-dma for the past month. Today's strength put FO right at resistance and just above the 200-dma so it all depends if traders produce any follow through buying pressure. We're suggesting a trigger to buy calls at $76.26. If triggered our target is the $79.90-80.00 range. We do not want to hold over the late October earnings report.

Suggested Options:
We are suggesting the November options but we plan to exit ahead of the October earnings. Our trigger is at $76.26.

BUY CALL NOV 75.00 FO-KO open interest=153 current ask $2.65
BUY CALL NOV 80.00 FO-KP open interest=635 current ask $0.60

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/26/06 (unconfirmed)
Average Daily Volume = 745 thousand

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KB Home - KBH - close: 47.43 change: +1.68 stop: 44.99

Company Description:
Building homes for nearly half a century, KB Home is one of America's premier homebuilders. (source: company press release or website)

Why We Like It:
We are increasing our exposure to the homebuilders. The group was one of the market's best performers on Thursday. The chart pattern in most of the big builders is suggesting that the industry has formed a bottom over the last couple of months. The consolidation is starting to see a more bullish tilt to it. Currently KBH is poised to breakout over resistance in the $47.50-48.00 range. More aggressive traders may want to buy calls above $47.50. We're suggesting that readers wait for a move over $48.05. If triggered our target is the $52.50 level. We do expect the $50 mark to offer resistance at the initial test and KBH could bounce around the $48-50 region until it builds up enough steam to breakout higher but the stock's next move does look like it will be higher. The P&F chart points to a $64 target and a move over $48 would be a new triple-top breakout buy signal.

Suggested Options:
We are suggesting the November calls.

BUY CALL NOV 45.00 KBH-KI open interest=3071 current ask $3.90
BUY CALL NOV 50.00 KBH-KJ open interest=2769 current ask $1.25

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 12/20/06 (unconfirmed)
Average Daily Volume = 2.7 million

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Rockwell Automation - ROK - cls: 60.86 chg: +0.76 stop: 59.45

Company Description:
Rockwell Automation, Inc., is a leading global provider of industrial automation power, control and information solutions that help customers meet their manufacturing productivity objectives. (source: company press release or website)

Why We Like It:
ROK appears to have produced a bottom over the last six weeks and now shares have risen into what could be the beginning of a new bullish trend. The stock broke out higher today from its four-day consolidation and we see it as a relatively low-risk entry point to buy calls. We label it low risk because our stop is just south of this week's trading range. There is potential resistance at the 100-dma and exponential 200-dma but if the major averages are hitting new highs for the year then ROK might be able to push past this technical resistance. Our target is the $64.90-66.00 range. We do not want to hold over the early November earnings report.

Suggested Options:
We are suggesting the November options but we plan to exit ahead of earnings.

BUY CALL NOV 55.00 ROK-KK open interest= 25 current ask $6.80
BUY CALL NOV 60.00 ROK-KL open interest=251 current ask $3.20
BUY CALL NOV 65.00 ROK-KM open interest= 54 current ask $1.00

Picked on October 12 at $ 60.86
Change since picked: + 0.00
Earnings Date 11/02/06 (unconfirmed)
Average Daily Volume = 1.5 million

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Vimpel Comm. - VIP - close: 62.17 chg: +1.87 stop: 59.95

Company Description:
VimpelCom is a leading international provider of mobile telecommunications services in Russia and Kazakhstan, with recently acquired operators in Ukraine, Uzbekistan, Tajikistan and Georgia. The VimpelCom Group's license portfolio covers approximately 237 million people. Geographically it covers 78 regions in Russia (with 136.5 million people, representing 94% of Russia's population) as well as the entire territories of Kazakhstan, Ukraine, Uzbekistan, Tajikistan and Georgia. (source: company press release or website)

Why We Like It:
Shares of VIP have spent the last four weeks consolidating its impressive gains from August and September. Now the technical indicators are starting to turn bullish again. Today's rally follows yesterday's test of the $60 level. We see it as a new entry point to buy calls. We're suggesting plays right here but more conservative traders may want to wait for a new high (above $63.51). Our target is the $67.50-70.00 range. We do not want to hold over the mid-November earnings.

Suggested Options:
We are suggesting the November calls.

BUY CALL NOV 60.00 VIQ-KL open interest=635 current ask $4.50
BUY CALL NOV 65.00 VIQ-KM open interest=719 current ask $1.90

Picked on October 12 at $ 62.17
Change since picked: + 0.00
Earnings Date 11/17/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

New Puts

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New Strangles

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