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New Option Plays

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BTU None None
TEX    

New Calls

Peabody Energy - BTU - cls: 50.70 change: +1.95 stop: 47.99

Company Description:
Peabody Energy is the world's largest private-sector coal company, with 2006 sales of 248 million tons of coal and $5.3 billion in revenues. Its coal products fuel approximately 10 percent of all U.S. electricity generation and more than 2 percent of worldwide electricity. (source: company press release or website)

Why We Like It:
Coal stocks were strong on Wednesday. Leading the way was BTU, which rose 4% and broke out over resistance at the $50.00 mark. Shares had been consolidating under the $50 level for three weeks straight. We're suggesting calls on BTU above $50. The stop will go just under Tuesday's low. Our target is the $54.50-55.00 range. The P&F chart is very bullish with a $69 target. Our biggest concern with calls on BTU is M&A news. The risk is that BTU might announce it is acquiring one of its smaller rivals and normally shares of the acquirer go down on the announcement.

Suggested Options:
We are suggesting the June calls. 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 45.00 BTU-FI open interest=19710 current ask $6.40
BUY CALL JUN 50.00 BTU-FJ open interest=15126 current ask $2.75
BUY CALL JUN 55.00 BTU-FK open interest= 4179 current ask $0.80

Picked on May 09 at $ 50.70
Change since picked: + 0.00
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 5.3 million

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Terex - TEX - cls: 81.16 change: +1.68 stop: 77.95

Company Description:
Terex Corporation is a diversified global manufacturer with 2006 net sales of approximately $7.6 billion. Terex operates in five business segments: Terex Aerial Work Platforms, Terex Construction, Terex Cranes, Terex Materials Processing & Mining, and Terex Roadbuilding, Utility Products and Other. Terex manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, quarrying, surface mining, shipping, transportation, refining and utility industries. (source: company press release or website)

Why We Like It:
The bullish trend in TEX continues. After almost three weeks of consolidating under the $81-82 level shares appear to be breaking out. We are suggesting new call positions now. More conservative traders may want to wait for a rally past $82.00 before initiating positions. Our target is the $87.00-90.00 range. The P&F chart is already bullish with a $105 target and is on the verge of producing a new triple-top breakout buy signal.

Suggested Options:
We are suggesting the June calls although Julys would also work.

BUY CALL JUN 80.00 TEX-FP open interest= 342 current ask $4.40
BUY CALL JUN 85.00 TEX-FQ open interest= 929 current ask $2.10

Picked on May 09 at $ 81.16
Change since picked: + 0.00
Earnings Date 07/25/07 (unconfirmed)
Average Daily Volume = 1.2 million
 

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