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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
DEO None None
RTP    
SHLD    

New Calls

Diageo - DEO - close: 81.04 change: +1.25 stop: 78.45

Company Description:
Diageo (Dee-AH-Gee-O) is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines, and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Jose Cuervo, Tanqueray, Captain Morgan, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines. Diageo is a global company, trading in more than 200 countries around the world. (source: company press release or website)

Why We Like It:
DEO's bullish trend looks ready to begin a new leg higher. Shares have consolidated under resistance at the $80.00 level for more than a month and today's widespread market rally has fueled a breakout over resistance. Volume came in above average on the move and shares closed at a new all-time high. Technical indicators are naturally improving on the stock's strength. We are suggesting call positions now although patient traders might want to wait for a potential dip back toward $80.00. Broken resistance at $80.00 should offer new support. Our short-term target is the $84.75-85.00 range although more aggressive traders may want to aim higher. FYI: The P&F chart points to an $89 target. Traders should also note that we cannot find a solid earnings date for DEO. It looks like the company presents earnings results twice a year in March and September. Therefore we'll try and exit near the beginning of March if the stock hasn't hit our target.

Suggested Options:
We are suggesting the March calls.

BUY CALL MAR 80.00 DEO-CP open interest=221 current ask $1.95
BUY CALL MAR 85.00 DEO-CQ open interest= 0 current ask $0.15

Picked on February 14 at $ 81.04
Change since picked: + 0.00
Earnings Date 03/10/07 (unconfirmed)
Average Daily Volume = 452 thousand

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Rio Tinto - RTP - cls: 221.15 chg: +4.16 stop: 212.45

Company Description:
Rio Tinto is one of the world's leading mining and exploration companies. We find, mine and process the earth's mineral resources - metals and minerals essential for making thousands of everyday products that meet society's needs and contribute to improved living standards. Our activities span the world with production from every continent. Our products include aluminium, copper, diamonds, energy products, gold, industrial minerals and iron ore. (source: company press release or website)

Why We Like It:
RTP was in the news on Tuesday after it was reported in a British newspaper that two Australian miners, RTP and BHP Billiton, were each considering a $40 billion bid for Alcoa (AA). Shares of RTP rallied on the news instead of turning lower, which tends to be more common for the company acquiring its rival. A rally on the M&A speculation usually means the market approves. Shares of RTP continued to rally today and broke out over significant resistance (see chart). Technical indicators on both the weekly and daily charts are turning positive. We are suggesting call positions now but would also use a dip anywhere above $215 as a new entry point to open bullish positions. RTP will probably have some resistance at its November 2006 highs near $230 but our target is the $237.50-240.00 range. FYI: RTP is a high-dollar stock and is bound to see some bigger swings (volatility). Consider this a more aggressive play.

Suggested Options:
We are suggesting either the March or April calls. March calls have less than five weeks left.

BUY CALL MAR 210 RTP-CB open interest= 224 current ask $14.10
BUY CALL MAR 220 RTP-CD open interest= 263 current ask $ 7.50
*we don't see any March $230 calls available

BUY CALL APR 220 RTP-DD open interest=1180 current ask $10.60
BUY CALL APR 230 RTP-DF open interest=1080 current ask $ 6.40

Picked on February 14 at $221.15
Change since picked: + 0.00
Earnings Date 02/01/07 (confirmed)
Average Daily Volume = 437 thousand

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Sears Holding - SHLD - cls: 183.64 chg: +1.69 stop: 176.45

Company Description:
Sears Holdings Corporation is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,800 full-line and specialty retail stores in the United States and Canada. (source: company press release or website)

Why We Like It:
Retail stocks have shrugged off a rise in crude oil and lackluster retail sales numbers for January. Shares of SHLD are helping lead the pack with a new all-time high on February 9th. Traders bought the dip near $180 on February 12th and again near $181 this morning. We are bullish on the stock with shares above $180.00 and its 10-dma. Readers can choose to buy calls now or wait for a potential dip back toward the $180-182 region. The Point & Figure chart points to a $228 target. We are aiming for the $195.00-200.00 range. We do not want to hold over the mid March earnings.

Suggested Options:
We are suggesting the March calls but bear in mind that March options expire in less than five weeks. If you prefer more time you'll have to consider the June strikes.

BUY CALL MAR 180.00 KDU-CP open interest=4376 current ask $8.50
BUY CALL MAR 185.00 KDU-CQ open interest=3533 current ask $5.70
BUY CALL MAR 190.00 KDU-CR open interest=5016 current ask $3.60

Picked on February 14 at $183.64
Change since picked: + 0.00
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 1.2 million
 

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