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Call Options Plays
Put Options Plays
Strangle Options Plays
AAPL ERTS None
CELG    

New Calls

Apple Inc. - AAPL - cls: 89.59 chg: +0.02 stop: 87.49

Company Description:
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications. Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online store. (source: company press release or website)

Why We Like It:
AAPL tends to march to the beat of its own drum and that's why shares may still make an attractive call candidate even though the major market indices look vulnerable to more selling. The stock has been creeping higher the last few weeks and is now challenging resistance in the $90.00-91.00 range. If AAPL can trade over $91.00 it would reverse its Point & Figure chart into a new buy signal. Therefore we are suggesting a trigger to buy calls at $91.01. We do want traders to note that the bottom of its January gap down, near $92, might be resistance so AAPL may bounce around the $90-92 range for a little while. If triggered at $91.01 our target is the $97.50-100.00 range.

Suggested Options:
We are suggesting the April calls but would prefer to buy Mays if they were available. Our suggested entry point is $91.01.

BUY CALL APR 90.00 QAA-DR open interest=81446 current ask $3.00
BUY CALL APR 95.00 QAA-DS open interest=71901 current ask $1.20

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/25/07 (confirmed)
Average Daily Volume = 35 million

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Celgene - CELG - close: 52.02 chg: +0.87 stop: 49.45

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

Why We Like It:
We are labeling this an aggressive play. CELG's P&F chart is bearish and the BTK biotech index doesn't look super healthy. Meanwhile the DRG drug index is looking weak. Yet CELG has been consolidating sideways the past couple of weeks and appears to have built a base above the $50 level and its 200-dma. The last time CELG tested its 200-dma, it proved to be a great entry point for new bullish positions. We also noticed that volume is picking up on the rebound and shares rose 1.7% on Friday, displaying some relative strength. We are suggesting a trigger to buy calls in CELG at $52.65. More conservative traders may want to wait for a rise past $53.00 and use a tighter stop loss. There is potential resistance with the 50-dma and 100-dma around $54-55 but we suspect CELG could make a run at its old highs. Our target is the $57.50-60.00 range. We do not want to hold over the late April earnings report.

Suggested Options:
We are suggesting the April calls. Our suggested entry point is $52.65.

BUY CALL APR 50.00 LQH-DJ open interest=11390 current ask $3.80
BUY CALL APR 55.00 LQH-DK open interest=20855 current ask $1.40

Picked on March xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/26/07 (unconfirmed)
Average Daily Volume = 3.5 million
 

New Puts

Electronic Arts - ERTS - cls: 48.92 chg: -1.07 stop: 51.55

Company Description:
Electronic Arts Inc. (EA), headquartered in Redwood City, California, is the world's leading interactive entertainment software company. Founded in 1982, the company develops, publishes, and distributes interactive software worldwide for videogame systems, personal computers, cellular handsets and the Internet. (source: company press release or website)

Why We Like It:
ERTS garnered some analysts' attention this past week. One analysts was bullish on the video game sector in general while another stated that ERTS was likely to have a worse than expected quarter. Usually we tend to be bullish on the game makers this time of year as investors look ahead to the annual E3 convention traditionally held in May. This year the E3 expo is scaling back and has been scheduled for July pushing back any pre-expo excitement. Given the bearish trend of lower highs (failed rallies) in ERTS we suspect the next move will be down. Last Thursday's failed rally under the 200-dma and the 2% drop on Friday looks like a new entry point to buy puts. If you prefer you might want to wait for a new March low under $48.40 before initiating positions. Our target is the $45.00-44.00 range near the July 2007 gap. The P&F chart looks pretty bearish with a failed rally under resistance and a $40 target.

Suggested Options:
We are suggesting the April puts although June puts would also work well.

BUY PUT APR 50.00 EZQ-PJ open interest=1602 current ask $2.25
BUY PUT APR 45.00 EZQ-PI open interest=1033 current ask $0.45

Picked on March 18 at $ 48.92
Change since picked: + 0.00
Earnings Date 05/03/07 (unconfirmed)
Average Daily Volume = 4.0 million
 

New Strangles

None today.
 

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