Option Investor
New Plays

New Option Plays

HAVING TROUBLE PRINTING?
Printer friendly version
Call Options Plays
Put Options Plays
Strangle Options Plays
WFR EXPD None
  YHOO  
  YUM  

New Calls

MEMC Electronic - WFR - close: 42.40 change: +0.00 stop: 39.49

Company Description:
MEMC is a global leader in the manufacture and sale of wafers and related intermediate products to the semiconductor and solar industries. MEMC has been a pioneer in the design and development of wafer technologies over the past four decades. With R&D and manufacturing facilities in the U.S., Europe and Asia, MEMC enables the next generation of high performance semiconductor devices and solar cells. (source: company press release or website)

Why We Like It:
WFR is a semiconductor company that specializes in the solar energy industry. With everyone concerned about energy these days this seems to be a growing market. The stock has definitely been out performing some of its peers in the semiconductor sector. This past week WFR broke through resistance near $40.00 and then later some bullish analyst comments helped push WFR past the September highs. We see the dip on Thursday and Friday as a new entry point to buy calls. However, more patient traders might want to wait for a potential dip towards short-term support near its 10-dma and the $40 region, which would also be a good spot to consider new call plays. Our big concern here would be a sell-off in the NASDAQ or the SOX, even though WFR has been out performing it will probably struggle if there is a tech stock breakdown. Our target is the $47.50-50.00 range. The P&F chart is bullish with a $48 target.

Suggested Options:
We are suggesting the January calls. You, the individual trader, should decide which month and strike price best suits your trading style and risk for all of our plays.

BUY CALL JAN 40.00 WFR-AH open interest=7415 current ask $4.00
BUY CALL JAN 45.00 WFR-AI open interest=9245 current ask $1.45

Picked on December 10 at $ 42.40
Change since picked: + 0.00
Earnings Date 01/25/07 (unconfirmed)
Average Daily Volume = 4.4 million
 

New Puts

Expeditors Intl.- EXPD - close: 43.68 change: -0.42 stop: 46.05

Company Description:
Expeditors is a global logistics company headquartered in Seattle, Washington. The company employs trained professionals in 167 full-service offices, 58 satellite locations and 5 international service centers located on six continents linked into a seamless worldwide network through an integrated information management system. Services include air and ocean freight forwarding, vendor consolidation, customs clearance, marine insurance, distribution and other value added international logistics services. (source: company press release or website)

Why We Like It:
Transport stocks have been struggling somewhat. Oil prices have been trying to stage a comeback and when oil rises it puts pressure on transport companies' profits. Shares of EXPD have been slowly withering lower since the late October peak. The mid-November oversold bounce from the 200-dma has failed and now shares are breaking down under multiple levels of support. The technical indicators on the daily and weekly chart are bearish or they are quickly turning bearish. This is in contrast to the P&F chart, which is still bullish. Plus, the stock might have potential support with a trendline near $42.50-43.00 (see chart). However, we suspect that EXPD will continue lower and fall toward support near $40 (or worse). We're suggesting put plays with EXPD under $44.00. Our short-term target is the $40.15-40.00 range. More aggressive traders may want to aim for the August lows. FYI: We'd keep an eye on the transportation index, which is poised to breakdown under its 50-dma.

Suggested Options:
We are suggesting the January puts.

BUY PUT JAN 45.00 URP-MI open interest=2443 current ask $2.60
BUY PUT JAN 42.50 URP-MV open interest= 919 current ask $1.40
BUY PUT JAN 40.00 URP-MH open interest=1391 current ask $0.65

Picked on December 10 at $ 43.68
Change since picked: + 0.00
Earnings Date 02/06/07 (unconfirmed)
Average Daily Volume = 1.4 million

---

Yahoo! Inc. - YHOO - close: 26.34 chg: -0.29 stop: 27.05

Company Description:
Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo!'s mission is to connect people to their passions, their communities, and the world's knowledge. Yahoo! is headquartered in Sunnyvale, California. (source: company press release or website)

Why We Like It:
YHOO has been getting a lot of press lately with its restructuring plans and management shake up. Yet all the press has failed to stop the bleeding in its share price. The stock produced a clear bearish reversal in late November and now the stock appears to be near the end of a bearish head-and-shoulders pattern. Technicals are bearish and the P&F chart points to a $16 target. We are suggesting that readers wait for a breakdown under support near $26.00 and its 50-dma. Therefore we're suggesting a trigger to buy puts at $25.85. If triggered our target is the $22.65 level near the October low. More aggressive traders may want to aim lower.

Suggested Options:
We are suggesting the January puts. Our suggested trigger to open positions is at $25.85.

BUY PUT JAN 27.50 YHQ-MY open interest=47369 current ask $1.80
BUY PUT JAN 25.00 YHQ-ME open interest=65182 current ask $0.55

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/16/07 (unconfirmed)
Average Daily Volume = 29.3 million

---

YUM Brands - YUM - close: 59.72 change: -1.36 stop: 60.51

Company Description:
Yum! Brands Inc., based in Louisville, Kentucky, is the world's largest restaurant company in terms of system restaurants with over 34,000 restaurants, which includes over 2,000 licensed restaurants, in more than 100 countries and territories. Four of the company's restaurant brands -- KFC, Pizza Hut, Taco Bell and Long John Silver's -- are the global leaders of the chicken, pizza, Mexican-style food and quick-service seafood categories respectively. (source: company press release or website)

Why We Like It:
A downgrade for YUM on Friday morning sent the stock reeling. Shares gapped down and closed with a 2.2% decline on big volume. Looking at the intraday chart you can see that the intraday rebound struggled to fill the gap and eventually turned lower again. Shares of YUM were already looking vulnerable with a potential bearish double-top pattern at the top of its significant run up from the July lows. The technical picture has turned bearish although the P&F chart is still bullish (for now). We are suggesting a trigger to buy puts at $58.49, which is under the 50-dma and under Friday's low. If triggered our target will be the 55.75-55.00 range.

Suggested Options:
We are suggesting the January put. Our suggested trigger to open plays is at $58.49.

BUY PUT JAN 60.00 YUM-ML open interest=1628 current ask $2.40
BUY PUT JAN 55.00 YUM-MK open interest=4436 current ask $0.70

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/07/07 (unconfirmed)
Average Daily Volume = 1.6 million
 

New Strangles

None today.
 

New Play Archives