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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
BP LVS None
CETV    
CVX    
DE    
MAN    
PCR    
PENN    
SNDK    
SPWR    
VLO    

Play Editor's Note: The markets staged a very sharp rebound this past week. The Dow Industrials rallied more than 350 points from its lows and the S&P 500 index rebounded with a 2.6% gain. Yet in spite of these big moves the Industrials and the S&P 500 remain under resistance at their early June highs. A breakout here would be very bullish. However, this looks like a set up for a failed rally at resistance and a potential (bearish) double-top pattern. After such a strong week most of the candidates we found were bullish. Please note that while we are adding several new bullish plays to the newsletter we STRONGLY suggest that readers wait for the Industrials to breakout over 13,700 and/or the S&P 500 index to breakout past 1,541 before opening new bullish positions. We are at a pivotal spot in the market's rally and this could be a turning point.


New Calls

BP Plc. - BP - close: 69.29 change: +0.43 stop: 67.85

Company Description:
BP is one of the world's largest energy companies, with interests in more than 100 countries and over 100,000 employees across six continents. BP's business segments are Exploration and Production; Refining and Marketing; and Gas, Power and Renewables, which includes its Alternative Energy business. Through these business segments, BP provides fuel for transportation, energy for heat and light, retail services, and petrochemical products. (source: company press release or website)

Why We Like It:
Oil stocks have been very strong. The OIX oil index is hitting new all-time highs. Oil is likely to remain high thanks to the summer driving season, refinery outages, geo-political tensions, and the upcoming hurricane season. BP looks like a potential candidate to capture future strength in the group. The stock has been bouncing around the $66-70 level for weeks and is poised to breakout over resistance near $70.00. We are suggesting a trigger to buy calls at $70.25. If triggered our target is the $74.85-75.00 range. We do see some resistance near $73.50. Friday's rally hit an intraday high of $70.05 and that move over $70.00 has produced a new triple-top breakout buy signal on the Point & Figure chart with a $90.00 target. More aggressive traders may want to aim higher than our $75 target but keep in mind that we plan to exit ahead of the late July earnings report.

Suggested Options:
We are suggesting the July calls. Our suggested trigger to open positions is at $70.25.

BUY CALL JUL 65.00 BP-GM open interest= 7938 current ask $5.00
BUY CALL JUL 70.00 BP-GN open interest=15829 current ask $1.45
BUY CALL JUL 75.00 BP-GO open interest= 4325 current ask $0.20

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/24/07 (unconfirmed)
Average Daily Volume = 3.5 million

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Central Euro. Media - CETV - cls: 92.75 chg: +1.95 stop: 87.90

Company Description:
CME is a TV broadcasting company operating leading networks in six Central and Eastern European countries with an aggregate population of approximately 90 million people. (source: company press release or website)

Why We Like It:
Most of CETV's weekly and daily technical indicators are turning positive with Friday's bullish breakout. The stock had been consolidating sideways between $86 and $90 and Friday's breakout looks like a new entry point to buy calls. There is resistance at the May highs in the $96-97 zone but we are aiming for a rally into the $99.00-100.00 range. The P&F chart is bullish with a $103 target.

Suggested Options:
We are suggesting the July calls although we'd prefer August calls when they become available.

BUY CALL JUL 90.00 EVU-GR open interest=274 current ask $5.20
BUY CALL JUL 95.00 EVU-GS open interest= 90 current ask $2.55
BUY CALL JUL 100.0 EVU-GT open interest= 55 current ask $0.95

Picked on June 17 at $ 92.75
Change since picked: + 0.00
Earnings Date 08/02/07 (unconfirmed)
Average Daily Volume = 124 thousand

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Chevron Corp. - CVX - close: 83.17 chg: +0.84 stop: 79.90

Company Description:
Chevron is one of the world's leading energy companies. With approximately 56,000 employees, Chevron subsidiaries conduct business in more than 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing, and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. (source: company press release or website)

Why We Like It:
As one of the biggest oil companies on the planet CVX should be a great proxy to play any future strength in oil and the energy sector. The stock has been bouncing around the $79-83.50 trading range for several weeks. If shares see any more strength it will be at new highs. We are suggesting a trigger to buy calls at $83.75. More conservative traders will want to consider waiting for a breakout over $84.00. We will also be watching for a pull back and another bounce near $80 as an alternative entry point. If we're triggered at $83.75 our target is the $89.00-90.00 range. The P&F chart is very bullish with a $120 target.

Suggested Options:
We are suggesting the July or September calls although we plan to exit ahead of the late July earnings report.

BUY CALL JUL 80.00 CVX-GP open interest=7200 current ask $4.40
BUY CALL JUL 85.00 CVX-GQ open interest=5181 current ask $1.35

BUY CALL SEP 80.00 CVX-IP open interest=9231 current ask $5.90
BUY CALL SEP 85.00 CVX-IQ open interest=6458 current ask $2.95

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/27/07 (unconfirmed)
Average Daily Volume = 9.1 million

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Deere Co - DE - close: 121.75 change: +1.03 stop: 117.45

Company Description:
John Deere (Deere & Company - NYSE: DE) is the world's leading provider of advanced products and services for agriculture and forestry and a major provider of advanced products and services for construction, lawn and turf care, landscaping and irrigation. John Deere also provides financial services worldwide and manufactures and markets engines used in heavy equipment. Since it was founded in 1837, the company has extended its heritage of integrity, quality, commitment and innovation around the globe. (source: company press release or website)

Why We Like It:
Shares of DE have rallied back to the top of its recent trading range. Any further market strength should spark a breakout to new highs for DE. We're suggesting a trigger to buy calls at $123.55. If that doesn't occur we'll be watching for an alternative entry point in the $115-116 zone but we'll evaluate it as it occurs. If we are triggered at $123.55 we will have two targets. Our first target is the $129.50-130.00 range. Our second target is the $134-135 range. The P&F chart is bullish with a $152 target.

Suggested Options:
We are suggesting the July or September calls. We would prefer August strikes when they become available. Our trigger to buy calls is at $123.55.

BUY CALL JUL 120 DE-GD open interest=1493 current ask $5.20
BUY CALL JUL 125 DE-GE open interest=2137 current ask $2.75
BUY CALL JUL 130 DE-GF open interest= 669 current ask $1.30

BUY CALL SEP 120 DE-ID open interest=1453 current ask $9.20
BUY CALL SEP 125 DE-IE open interest=2631 current ask $6.60
BUY CALL SEP 130 DE-IF open interest=1820 current ask $4.20

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/15/07 (unconfirmed)
Average Daily Volume = 2.6 million

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Manpower - MAN - cls: 92.84 change: +0.84 stop: 89.90

Company Description:
Manpower Inc. is a world leader in the employment services industry; creating and delivering services that enable its clients to win in the changing world of work. The $18 billion company offers employers a range of services for the entire employment and business cycle including permanent, temporary and contract recruitment; employee assessment and selection; training; outplacement; outsourcing and consulting. (source: company press release or website)

Why We Like It:
Without a doubt shares of MAN, like most of the market, are overbought and due for a correction. However, until the trend actually changes the path of least resistance seems to be up. So far the stock has been resistant to any significant sell-off. If the major market indices breakout to new highs we believe MAN will follow. Currently shares of MAN are consolidating under resistance at $94.00. Therefore we're suggesting a trigger to buy calls at $94.15. If triggered our target is the $99.50-100.00 range. We'll start with a stop loss at $89.90 but more conservative traders may want to use a tighter stop in the $91.25-91.50 range. MAN's P&F chart points to a $110 target.

Suggested Options:
We are suggesting the July calls. We do not want to hold over the July earnings report. Our trigger to buy calls is at $94.15.

BUY CALL JUL 90.00 MAN-GR open interest=229 current ask $5.60
BUY CALL JUL 95.00 MAN-GS open interest= 67 current ask $2.80
BUY CALL JUL 100.0 MAN-GT open interest=301 current ask $1.25

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/20/07 (unconfirmed)
Average Daily Volume = 829 thousand

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PACCAR - PCAR - cls: 90.66 change: +0.88 stop: 85.95

Company Description:
PACCAR is a global technology leader in the design, manufacture and customer support of high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. It also provides financial services and information technology and distributes truck parts related to its principal business. (source: company press release or website)

Why We Like It:
Shares of PCAR are breaking out from a six-week trading range. Friday's rally was fueled by above average volume and the close over $90.00 looks like a new entry point to buy calls. The MACD has produced a new buy signal. We're suggesting calls now with PCAR over $90.00. More conservative traders may want more confirmation with a move over $92.00. Our target is the $99.00-100.00 range. The P&F chart points to a $106 target. We do not want to hold over the late July earnings report.

Suggested Options:
We are suggesting the July or August calls. Our preference is for the August strikes.

BUY CALL JUL 90.00 PAQ-GR open interest=969 current ask $3.70
BUY CALL JUL 95.00 PAQ-GS open interest=235 current ask $1.45

BUY CALL AUG 90.00 PAQ-HR open interest=1066 current ask $5.10
BUY CALL AUG 95.00 PAQ-HS open interest= 444 current ask $2.80
BUY CALL AUG 100.0 PAQ-HT open interest= 346 current ask $1.30

Picked on June 17 at $ 90.66
Change since picked: + 0.00
Earnings Date 07/24/07 (unconfirmed)
Average Daily Volume = 1.7 million

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Penn National Gaming - PENN - cls: 62.12 chg: +10.98 stop: n/a

Company Description:
Penn National Gaming owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The Company presently operates eighteen facilities in fourteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature nearly 23,000 slot machines, over 400 table games, approximately 1,731 hotel rooms and approximately 808,000 square feet of gaming floor space. In the latest twelve month period ended March 31, 2007, Penn National generated net revenues of approximately $2.3 billion. (source: company press release or website)

Why We Like It:
If you have already read tonight's market wrap then you already know that PENN has announced it will be acquired by Fortress and Centerbridge Partners for $8.9 billion, which is about $67 a share. The stock reacted with a 21% gain on Friday. So why would be buy calls on it now? Good question. Some of the analysts commenting on the deal believe there could be additional suitors and a bidding war could drive the price towards $80.00. Jim, our market commentator, disclosed that he bought some October $65 calls to speculate on any further price action. We're going to add PENN as a bullish candidate but readers should consider this a high-risk, speculative play. If another bidder fails to show up then these calls will evaporate pretty quickly.

Suggested Options:
We are suggesting the October calls. Unfortunately, at this time, the only out-of-the money October call is the $65 strike. Hopefully we see some new strikes soon as market makers react to the spike higher.

BUY CALL OCT 65.00 UQN-JM open interest=76 current ask $1.40

We did notice that the January 2008 $70 calls were available.

BUY CALL JAN 70.00 UQN-AN open interest=37 current ask $0.65

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 1.0 million

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SanDisk - SNDK - cls: 46.40 change: +1.42 stop: 43.45

Company Description:
SanDisk is the original inventor of flash storage cards and is the world's largest supplier of flash data storage card products using its patented, high-density flash memory and controller technology. SanDisk is headquartered in Milpitas, CA and has operations worldwide, with more than half its sales outside the U.S. (source: company press release or website)

Why We Like It:
Shares of SNDK look attractive after Friday's bullish breakout over resistance near $46.00 and its 200-dma. The stock has been consolidating sideways for months. Friday's move pushed shares past significant resistance and on above average volume. The P&F chart now points to a $64 target. We are suggesting calls with SNDK above $46.00. We'll use two targets. Our conservative target is the $49.50-50.00 range. Our aggressive target is the $52.50-55.00 range, which might be too optimistic given our time frame. We don't want to hold over the mid July earnings report.

Suggested Options:
We are suggesting the July calls.

BUY CALL JUL 42.50 SWQ-GV open interest=18222 current ask $4.60
BUY CALL JUL 45.00 SWF-GI open interest=21492 current ask $2.65
BUY CALL JUL 47.50 SWF-GW open interest=13210 current ask $1.25
BUY CALL JUL 50.00 SWF-GJ open interest=14364 current ask $0.55

Picked on June 17 at $ 46.40
Change since picked: + 0.00
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 7.6 million

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SunPower - SPWR - cls: 57.94 change: +0.54 stop: 52.49

Company Description:
SunPower Corporation designs and manufactures high-efficiency silicon solar cells and solar panels based on an all-back contact cell design. SunPower's solar cells and panels generate up to 50 percent more power per unit area than conventional solar technologies and have a uniquely attractive, all-black appearance. (source: company press release or website)

Why We Like It:
Rising oil prices doesn't just fuel rallies in oil stocks but it also fuels interest in alternative energy companies. Shares of SPWR are breaking out again after a six-week consolidation. We are suggesting call positions with SPWR above $56.00. Our target is the $64.00-65.00 range. The P&F chart points to a $70 target. We do not want to hold over the mid July earnings report.

Suggested Options:
We're suggesting the July calls.

BUY CALL JUL 55.00 QSU-GK open interest=2886 current ask $4.60
BUY CALL JUL 60.00 QSU-GL open interest=1400 current ask $2.00

Picked on June 17 at $ 57.94
Change since picked: + 0.00
Earnings Date 07/19/07 (unconfirmed)
Average Daily Volume = 1.5 million

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Valero Energy - VLO - cls: 76.50 chg: +0.47 stop: 73.45

Company Description:
Valero Energy Corporation is a Fortune 500 company based in San Antonio with approximately 22,000 employees and assets valued at $38 billion. The largest refiner in North America, Valero has an extensive refining system with a throughput capacity of approximately 3.3 million barrels per day. The company's geographically diverse refining network stretches from Canada to the U.S. Gulf Coast and West Coast to the Caribbean. (source: company press release or website)

Why We Like It:
Oil refining company VLO has seen its stock price rebound from support and back to the top of its recent trading range. Any further strength should produce a breakout to new highs. We are suggesting a trigger to buy calls at $77.55. If triggered our target is the $84.50-85.00 range. The P&F chart currently points to an $88 target. We'll also keep watch for an alternative entry on another dip but our official entry point at this time is $77.55.

Suggested Options:
We are suggesting the July or September calls. Keep in mind we want to exit ahead of the late July earnings. Our suggested trigger to buy calls is at $77.55.

BUY CALL JUL 75.00 ZPY-GO open interest=23855 current ask $3.50
BUY CALL JUL 80.00 ZPY-GP open interest=21685 current ask $1.15

BUY CALL SEP 75.00 ZPY-IO open interest=34695 current ask $6.00
BUY CALL SEP 80.00 ZPY-IP open interest=19038 current ask $3.70
BUY CALL SEP 85.00 ZPY-IQ open interest= 6826 current ask $2.10

Picked on June xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 13.2 million
 

New Puts

Las Vegas Sands - LVS - cls: 76.78 chg: +0.20 stop: 80.26

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:
Shares of LVS have been under performing the market. The stock's oversold bounce from late May failed near $82 and its 50-dma. Now shares have a bearish trend of lower highs and the technical indicators are deteriorating. We are suggesting puts today after Friday's failed rally. More conservative traders may want to wait for a new relative low under $75.00. Our target is the $70.50-70.00 range. More aggressive traders may want to aim lower. FYI: More conservative traders may want to avoid opening new put positions if the major market indices breakout to new highs.

Suggested Options:
We are suggesting the July puts although Septembers would also work well.

BUY PUT JUL 80.00 LVS-SP open interest= 6401 current ask $4.90
BUY PUT JUL 75.00 LVS-SO open interest=10146 current ask $2.25
BUY PUT JUL 70.00 LVS-SN open interest= 2132 current ask $0.90

Picked on June 17 at $ 76.78
Change since picked: + 0.00
Earnings Date 08/01/07 (unconfirmed)
Average Daily Volume = 3.0 million
 

New Strangles

None today.

 

New Play Archives