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New Calls

NTL Inc. - NTLI - close: 26.95 chg: +1.05 stop: 25.99

Company Description:
ntl Incorporated is the UK's largest cable operator and a leading provider of broadband, digital television, telephony, content and communications services to homes, businesses and public sector organizations. From the consolidation of the cable industry to
the roll-out of broadband, ntl and Telewest have led the communications industry for over a decade, providing services to 5 million residential customers and reaching 85% of UK businesses. (source: company press release or website)

Why We Like It:
We hesitate to add another call candidate to the newsletter when the major averages are looking so overbought and due for a rest. However, the pattern in NTLI looks pretty bullish and today's very strong volume behind the rally suggests that the stock might be poised for a big breakout. We are suggesting a trigger to buy calls at $27.41, which is above the September 11th, 2006 high. This should be a breakout over resistance and clear the way for a run towards the $30.00 region. If triggered at $27.41 our target is the $29.90-30.00 range. We do not want to hold over the early November (8th?) earnings report.

Suggested Options:
We are suggesting the November or December calls. Our trigger to open positions is at $27.41.

BUY CALL NOV 25.00 NUD-KE open interest=1948 current ask $2.40
BUY CALL NOV 27.50 NUD-KY open interest=5264 current ask $0.90
BUY CALL NOV 30.00 NUD-KF open interest=1212 current ask $0.25

BUY CALL DEC 25.00 NUD-LE open interest=11490 current ask $2.70
BUY CALL DEC 27.50 NUD-LY open interest=10893 current ask $1.30
BUY CALL DEC 30.00 NUD-LF open interest= 6218 current ask $0.55

Picked on October xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/08/06 (unconfirmed)
Average Daily Volume = 2.4 million
 

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