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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
AAPL EQIX None
ABT ESS  
BSC ITRI  
LEH LVS  
MRO    
RIMM    
WSO    

New Calls

Apple Inc. - AAPL - cls: 100.81 chg: +0.40 stop: 99.85

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 computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and will enter the mobile phone market this year with its revolutionary iPhone. (source: company press release or website)

Why We Like It:
Shares of AAPL vaulted higher after its latest earnings reprot in late April. There has been almost no profit taking and the stock is developing a short-term bullish trend of higher lows. A breakout over resistance near $102 would be bullish. We are suggesting a trigger to buy calls at $102.55, which is above the April 26th high. We'll set our stop loss at $99.85. More aggressive traders may want to jump in early on a move over $102 and use a wider stop under $98.00. Our target is the $108.00-110.00 range. FYI: The Point & Figure chart forecasts a $123 target.

Suggested Options:
We are suggesting June calls. Our suggested trigger to open positions is at $102.55. Please note that with all of our plays it is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY CALL JUN 100 QAA-FT open interest=15737 current ask $4.20
BUY CALL JUN 105 QAA-FA open interest=16294 current ask $2.00

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 23.9 million

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Abbott Labs - ABT - cls: 58.30 chg: +0.89 stop: 55.69

Company Description:
Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs 65,000 people and markets its products in more than 130 countries. (source: company press release or website)

Why We Like It:
Drug stocks rallied on Friday. The DRG drug index rose 0.8% and broke out from a two-week consolidation pattern. Contributing to the sector's strength was a 1.5% rally in ABT. The company announced positive test results on a potential psoriasis drug. Technically ABT looks strong with the recent bounce from $56 near the bottom of its rising channel. We are suggesting call positions now although a dip back toward $57.50 would also be an attractive entry point. Our target is the $62.00-62.50 range. FYI: The P&F chart points to a $65 target.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 55.00 ABT-FK open interest= 719 current ask $4.10
BUY CALL JUN 57.50 ABT-FY open interest=1484 current ask $2.10
BUY CALL JUN 60.00 ABT-FL open interest= 418 current ask $0.80

Picked on May 06 at $ 58.30
Change since picked: + 0.00
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume = 7.1 million

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Bear Stearns - BSC - cls: 157.77 chg: 1.52 stop: 154.75

Company Description:
Founded in 1923, The Bear Stearns Companies Inc. is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The Company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. Headquartered in New York City, the company has approximately 14,500 employees worldwide. (source: company press release or website)

Why We Like It:
There has been no slow down in merger and acquisition activity, which is helping push the broker-dealers toward their 2007 highs. The sector could be poised to breakout to new all-time highs soon. If the XBD index does breakout then we expect BSC To follow. Currently the stock is consolidating sideways under resistance near $160. More aggressive traders might want to buy last week's bounce right now. We would rather wait for the breakout so we're suggesting a trigger to buy calls at $160.25. If triggered then our target is the $169.75-172.50 range. The P&F chart is hitting some resistance but shows a triple-top breakout buy signal with a $184 target. Chart readers will note that BSC appears to have an inverse (bullish) head-and-shoulders pattern that points to a $170 target.

Suggested Options:
We are suggesting the June calls. Our trigger to open positions is at $160.25.

BUY CALL JUN 155 BSC-FK open interest=1617 current ask $7.80
BUY CALL JUN 160 BSC-FL open interest= 410 current ask $5.00
BUY CALL JUN 165 BSC-FM open interest= 269 current ask $2.90

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/27/07 (unconfirmed)
Average Daily Volume = 2.7 million

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Lehman Brothers - LEH - cls: 77.30 chg: +1.65 stop: 74.85

Company Description:
Lehman Brothers (ticker symbol: LEH), an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. (source: company press release or website)

Why We Like It:
We're going to double up in the brokers sector today. LEH also looks attractive with a strong bounce from technical support near its 50 and 200-dma. Many of the technical indicators are turning bullish again. The P&F chart is bullish with a $100 target but it's worth noting that the P&F chart does have potential resistance near $79. We see potential resistance near $80 on the daily chart. Our target is the $84.00-85.00 range.

Suggested Options:
June options will work but we're suggesting the July calls, which have more open interest.

BUY CALL JUL 75.00 LES-GO open interest=5468 current ask $5.70
BUY CALL JUL 80.00 LES-GP open interest=4477 current ask $2.90
BUY CALL JUL 85.00 LES-GQ open interest=6354 current ask $1.20

Picked on May 06 at $ 77.30
Change since picked: + 0.00
Earnings Date 07/18/07 (unconfirmed)
Average Daily Volume = 5.9 million

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Marathon Oil - MRO - cls: 104.41 chg: +0.83 stop: 99.75

Company Description:
Marathon Oil Corporation is engaged in the worldwide exploration and production of crude oil and natural gas, as well as the domestic refining, marketing and transportation of petroleum products. Headquartered in Houston, Texas, Marathon is among the leading energy industry players, applying innovative technologies to discover valuable energy resources and deliver the highest quality products to the marketplace. (source: company press release or website)

Why We Like It:
Oil stocks have held up relatively well considering the decline in crude oil futures this past week. The breakdown in oil looks bearish on a technical basis but we're quickly approaching the summer driving season and any weakness is oil is probably temporary. MRO is a tempting bullish candidate thanks to its relative strength. The stock looks like it wants to breakout higher after a six-week sideways consolidation pattern. We're suggesting a trigger to buy calls at $105.55, which is just above Friday's intraday peak. If triggered at $105.55 we'll have two targets. Our conservative target is the $109.85-110.00 range. Our aggressive target will be the $114.00-115.00 range. FYI: The P&F chart points to $110 and MRO has a 2-for-1 split coming up on June 19th.

Suggested Options:
We are suggesting the June and/or July calls. Our suggested trigger to buy calls is at $105.55.

BUY CALL JUN 100 MRO-FT open interest=1739 current ask $6.50
BUY CALL JUN 105 MRO-FA open interest=1415 current ask $3.60
BUY CALL JUN 110 MRO-FB open interest=1720 current ask $1.70

BUY CALL JUL 105 MRO-GA open interest=2648 current ask $5.10
BUY CALL JUL 110 MRO-GB open interest=2309 current ask $2.95
BUY CALL JUL 115 MRO-GC open interest= 449 current ask $1.60

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/31/07 (unconfirmed)
Average Daily Volume = 3.8 million

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Research In Motion - RIMM - cls: 138.02 chg: +2.52 stop: 134.50

Company Description:
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. (source: company press release or website)

Why We Like It:
Expectations were running pretty high for RIMM ahead of its April 11th earnings report. Investors sold the news and the stock gapped down. Since then shares have been consolidating sideways. It now appears that the consolidation is over with Friday's bullish breakout from its trading range and above its simple 50-dma. However, RIMM still has resistance at $140.00. We're suggesting a trigger to buy calls at $140.25. If triggered our target is the $149.00-150.00 range. Readers should note that RIMM will probably encounter some resistance near the top of its gap down around the $145 region. FYI: The P&F chart is bearish and points to a $110 target. More aggressive traders might want to consider buying a bounce from $135.

Suggested Options:
We are suggesting the June calls. Our trigger to open positions is at $140.25.

BUY CALL JUN 135 RFY-FG open interest=5908 current ask $7.90
BUY CALL JUN 140 RFY-FH open interest=9568 current ask $5.10
BUY CALL JUN 145 RFY-FI open interest=6648 current ask $3.20

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/27/07 (unconfirmed)
Average Daily Volume = million

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WATSCO - WSO - cls: 55.73 change: +1.42 stop: 53.95

Company Description:
Watsco is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies in the HVAC industry, currently operating 380 locations serving over 40,000 customers in 32 states. (source: company press release or website)

Why We Like It:
WSO has been showing relative strength in the face of bad news. The company reported earnings on April 19th and missed estimates. If that wasn't bad enough they warned for the year. Yet the stock shot higher post-earnings and has been trending higher since. Friday's 2.6% rally is a bullish breakout over resistance at the $55.00 level. The move looks like a new entry point for call positions. The P&F chart looks very positive with a bullish triangle breakout pattern and a $68 target. We're suggesting calls with WSO above $55. Our target is the $59.50-60.00 range.

Suggested Options:
We are suggesting the June calls. We don't see any data for the June $60 calls yet.

BUY CALL JUN 55.00 WSO-FK open interest= 209 current ask $2.60
BUY CALL JUN 60.00 WSO-FL open interest= 0 current ask $

Picked on May 06 at $ 55.73
Change since picked: + 0.00
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 382 thousand
 

New Puts

Equinix - EQIX - cls: 82.83 chg: -1.58 stop: 86.05

Company Description:
Equinix is the leading global provider of network-neutral data centers and Internet exchange services for enterprises, content companies, systems integrators and network services providers. Through the company's Internet Business Exchange(TM) (IBX) centers in 10 markets in the U.S. and Asia, customers can directly interconnect with every major global network and ISP for their critical peering, transit and traffic exchange requirements. (source: company press release or website)

Why We Like It:
EQIX recently reported earnings and the stock initially rallied on the positive earnings guidance. Yet the intraday breakouts over resistance at $90.00 proved to be a bull trap. The stock produced a big breakdown and bearish reversal on April 30th. EQIX did see an oversold bounce from the $80 level but that rebound is already failing. Last Friday's session produced another bearish engulfing candlestick. We are suggesting puts now with a stop loss above $86.00 (and its 50-dma). More conservative traders may want to wait for a breakdown under $80.00 before initiating positions. Our target is the $75.25-75.00 range. Aggressive traders may want to aim closer to $70 but be aware that the 200-dma might offer new technical support. FYI: The P&F chart points to a $70 target.

Suggested Options:
We are suggesting the June puts.

BUY PUT JUN 85.00 FQS-RQ open interest=1486 current ask $4.50
BUY PUT JUN 80.00 FQS-RP open interest= 512 current ask $2.30
BUY PUT JUN 75.00 FQS-RO open interest= 365 current ask $1.00

Picked on May 06 at $ 82.83
Change since picked: + 0.00
Earnings Date 04/26/07 (confirmed)
Average Daily Volume = 515 thousand

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Essex Property - ESS - cls: 127.30 chg: -2.95 stop: 130.05

Company Description:
Essex Property Trust, Inc., located in Palo Alto, California and traded on the New York Stock Exchange (ESS), is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast communities. Essex currently has ownership interests in 132 multifamily properties (27,087 units), and has 908 units in various stages of development. (source: company press release or website)

Why We Like It:
Investors usually don't like it when companies dilute an investor's position by offering additional stock for sale. ESS just announced another 1.5 million shares for sale in a secondary offering at $128/share. ESS only has 24.2 million shares outstanding. On top of this news the REITs have been showing relative weakness. ESS is developing a bearish trend of lower highs and the Thursday-Friday action last week is a failed rally under the 50-dma. We want to catch any further breakdown under support at the $125.00 level. The March 2007 low was $124.78. We are suggesting a trigger to buy puts at $124.65. There is potential support near $120 but if triggered our target is the $115.50-115.00 range. FYI: The P&F chart points to a $100 target.

Suggested Options:
We are suggesting the June and/or July strikes. Our trigger to open plays is at $124.65.

BUY PUT JUN 125 ESS-RE open interest= 32 current ask $2.50

BUY PUT JUL 125 ESS-SE open interest= 57 current ask $3.90
BUY PUT JUL 120 ESS-SD open interest= 28 current ask $2.35

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 281 million

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Itron - ITRI - cls: 66.45 change: -0.44 stop: 70.01

Company Description:
Itron is a leading technology provider and critical source of knowledge to the global energy and water industries. Nearly 3,000 utilities worldwide rely on Itron's award-winning technology to provide the knowledge they require to optimize the delivery and use of energy and water. (source: company press release or website)

Why We Like It:
The bull run in ITRI may be ending soon. The stock has produced a bearish reversal in the last few days. The high-volume drop on April 30th was the first clue and the bounce back struggled to make it past $70 again. Now shares are falling on big volume and look poised to break down under technical support at the 50-dma. We are suggesting a trigger to buy puts at $65.85, under the 50-dma and under short-term support near $66.00. If triggered at $65.85 our target is the $60.50-60.00 range. More conservative traders may want to aim for the rising 100-dma (currently near 60.73) since the 100-dma could be support.

Suggested Options:
We are suggesting the June puts. Our trigger to open positions is at $65.85. At this time we don't see any June $60 puts available.

BUY PUT JUN 70.00 IUP-RN open interest= 21 current ask $4.70
BUY PUT JUN 65.00 IUP-RM open interest= 20 current ask $1.95

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 547 thousand

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Las Vegas - LVS - cls: 81.81 change: -2.32 stop: 85.01

Company Description:
Las Vegas Sands Corp. is one of the leading international developers of multi-use integrated resorts. The Las Vegas, Nevada-based company owns and operates The Venetian Resort-Hotel-Casino and the Sands Expo and Convention Center in Las Vegas and the Sands Macao in the People's Republic of China (PRC) Special Administrative Region of Macao. The company is currently constructing four additional integrated resorts: The Venetian Macao Resort-Hotel in Macao; The Palazzo Resort-Hotel-Casino in Las Vegas; Sands Bethworks(TM) in Bethlehem, Pennsylvania; and The Marina Bay Sands(TM) in Singapore. (source: company press release or website)

Why We Like It:
Investors were not satisfied with LVS' latest earnings report last week. Shares gapped lower and the follow through decline on Friday looks bearish with its close under technical support at the 200-dma. Volume has been very big on the sell-off, which is another bearish clue. We want to catch any further breakdown under support at the $80.00 level. Thus we're suggesting a trigger to buy puts at $79.85. If triggered our target is the $71.50-70.00 range. Currently the P&F chart sports a triple-bottom breakdown sell signal with a $75 target.

Suggested Options:
We are suggesting the June puts. Our triggered to open positions is at $79.85.

BUY PUT JUN 80.00 LVS-RP open interest=10656 current ask $2.80
BUY PUT JUN 75.00 LVS-RO open interest= 2986 current ask $1.30

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/07 (confirmed)
Average Daily Volume = 2.1 million
 

New Strangles

None today.
 

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