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New Plays

New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
ATI None None
CI    
FCX    

Play Editor's note: There is no doubt that Tuesday's global sell-off was painful. The market-wide decline has produced a number of technical sell signals. Yet the pull back was so sharp nimble traders will still have an opportunity to buy the bounce. Today's rebound in the markets was very meager by any standard and we suspect that the major indices will see another test of support soon. Furthermore we expect bulls will buy the dip. The obvious risk is that there is no guarantee of a bounce and any pull back might just turn into a larger sell-off. If you are initiating any new bullish positions it might pay to wait for signs of a bounce instead of buying the first dip (see our new play comments below for details).


New Calls

Allegheny Tech. - ATI - cls: 102.32 chg: +3.65 stop: 93.95

Company Description:
Allegheny Technologies Incorporated is one of the largest and most diversified specialty metals producers in the world with revenues of $4.9 billion during 2006. ATI has approximately 9,500 full-time employees world-wide who use innovative technologies to offer growing global markets a wide range of specialty metals solutions. (source: company press release or website)

Why We Like It:
We were recently successful with a bullish call play on ATI just a few days ago and we're going to try again. However, this time we're going to set a trigger to try and catch the next pull back. Traders bought the dip near $96 and its rising 50-dma on Tuesday. We are suggesting that readers wait and watch for a pull back into the $97.50-96.00 range as the next entry point. We'll use a trigger at $97.49 to open new plays although we suggest waiting for signs of a bounce first before initiating positions. Our short-term target will be the $104.00-105.00 range. More aggressive traders can aim for the $109-110 zone.

Suggested Options:
We are suggesting the April calls. Our suggested entry range to buy calls is in the $97.50-96.00 range above its 50-dma.

BUY CALL APR 95 ATI-DS open interest=2542 current ask $10.90
BUY CALL APR 100 ATI-DT open interest=2487 current ask $7.70
BUY CALL APR 105 ATI-DA open interest=1925 current ask $5.10

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/25/07 (unconfirmed)
Average Daily Volume = 2.7 million

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Cigna - CI - close: 142.50 chg: +3.66 stop: 134.35

Company Description:
As a Business of Caring, CIGNA (NYSE: CI) provides employers with benefits, expertise and services that improve the health, well-being and productivity of their employees. (source: company press release or website)

Why We Like It:
CI is another strong, momentum stock that hit some profit taking yesterday. Traders were quick to buy the dip this morning and the stock rebounded strongly. We suspect that CI will dip again and we want to catch the next bounce. The stock has short-term support near $137.50 and again near $135.00 and its rising 50-dma near $134.35. We are suggesting that readers wait and watch for a pull back into the $137.50-135.00 range. Our suggested trigger to buy calls will be at $137.49. If triggered our target is the $145.00-146.00 range. We are suggesting a stop loss under the 50-dma.

Suggested Options:
We are suggesting the April calls. Our suggested entry range to buy calls is in the $137.50-135.00 range above its 50-dma.

BUY CALL APR 135 CD-DG open interest=1678 current ask $10.00
BUY CALL APR 140 CD-DH open interest= 637 current ask $ 6.40

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/09/07 (unconfirmed)
Average Daily Volume = 759 thousand

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Freeport McMoran - FCX - cls: 57.41 chg: +1.66 stop: 51.99

Company Description:
FCX explores for, develops, mines and processes ore containing copper, gold and silver in Indonesia, and smelts and refines copper concentrates in Spain and Indonesia. (source: company press release or website)

Why We Like It:
We are going to try again with FCX. Tuesday's sell-off stopped us out of what was shaping up to be a profitable play. Bulls were quick to buy the dip this morning near $55.00 and its 200-dma. If shares dip again we want to be ready. Our suggested entry range is the $55.25-54.00 area. We'll use an official trigger at $55.24. If triggered our target is the $62.50-65.00 range. More conservative traders might want to use a tighter stop loss. We do not want to hold over FCX's mid-April earnings report.

Suggested Options:
We are suggesting the April calls. Our suggested entry range to buy calls is in the $55.25-54.00 range.

BUY CALL APR 55 FCX-DK open interest= 406 current ask $5.10
BUY CALL APR 60 FCX-DL open interest=3565 current ask $2.65

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/17/07 (unconfirmed)
Average Daily Volume = 6.5 million
 

New Puts

None today.
 

New Strangles

None today.
 

New Play Archives