Option Investor
New Plays

New Option Plays

HAVING TROUBLE PRINTING?
Printer friendly version
Call Options Plays
Put Options Plays
Strangle Options Plays
None CELG
  WFMI  

Play Editor's Note: The market action has definitely turned bearish. More conservative traders may want to consider an early exit for any current bullish positions.


New Calls

None today.
 

New Puts

Celgene Corp. - CELG - close: 54.98 change: -0.36 stop: 57.01

Company Description:
Celgene Corporation, headquartered in Summit, New Jersey is an integrated global pharmaceutical company engaged primarily in the discovery, development and commercialization of innovative therapies for the treatment of cancer and inflammatory diseases through gene and protein regulation. (source: company press release or website)

Why We Like It:
It looks like the BTK biotech index is in the process of forming a bearish double top. If the pattern does appear then we should look for the sector to see some renewed selling shortly. With tech stocks already experiencing profit taking it's not a stretch of the imagination to expect biotech to follow suit. CELG is already under performing its peers and the rest of the market. The recent oversold bounce has failed near its 10-dma and 50-dma and now the stock looks poised to drop. We are suggesting put positions with CELG under $56.00 (the 10-dma). Our target is the $50.50-50.00 range, near its rising 100-dma. We do not want to hold over the February 1st earnings report so we have nine trading days.

Suggested Options:
We are suggesting the February puts but remember that we plan to exit before the early February earnings report.

BUY PUT FEB 60.00 LQH-NL open interest= 597 current ask $5.50
BUY PUT FEB 55.00 LQH-NK open interest=4177 current ask $2.15
BUY PUT FEB 50.00 LQH-NJ open interest=2849 current ask $0.70

Picked on January 18 at $ 54.98
Change since picked: + 0.00
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 4.4 million

---

Whole Foods - WFMI - close: 45.55 chg: -0.21 stop: 46.55

Company Description:
Founded in 1980 in Austin, Texas, Whole Foods Market is the world's leading natural and organic foods supermarket and America's first national certified organic grocer. In fiscal year 2006, the company had sales of $5.6 billion and currently has more than 180 stores in the United States, Canada, and the United Kingdom. (source: company press release or website)

Why We Like It:
The market looks poised for more profit taking and if the major averages continue lower it might put enough pressure on WFMI to break support near the $45.00 level. Shares of WFMI have been weak since the big gap down in November. We'd like to catch the next leg lower if shares break the $45.00 mark. Our suggested trigger to buy puts is at $44.85. If triggered our target is the $40.25-40.00 range. We do not want to hold over the early February earnings report.

Suggested Options:
We are suggesting the February puts but remember that we plan to exit before the early February earnings report.

BUY PUT FEB 50.00 FMQ-NJ open interest= 4448 current ask $5.20
BUY PUT FEB 45.00 FMQ-NI open interest= 7775 current ask $2.00
BUY PUT FEB 40.00 FMQ-NH open interest=11523 current ask $0.50

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/08/07 (unconfirmed)
Average Daily Volume = 3.3 million
 

New Strangles

None today.
 

New Play Archives