Option Investor
New Plays

New Option Plays

Printer friendly version
Call Options Plays
Put Options Plays
Strangle Options Plays
TGI X None

New Calls

Triumph Group - TGI - cls: 75.21 change: +0.55 stop: 72.45

Company Description:
Triumph Group, Inc., headquartered in Wayne, Pennsylvania, designs, engineers, manufactures, repairs and overhauls aircraft components and accessories. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers. (source: company press release or website)

Why We Like It:
It appears that the consolidation in shares of TGI is almost finished. The stock is bouncing along its trendline of higher lows and TGI just recently broke through its bearish trendline of lower highs (see chart). The MACD on the daily chart is nearing a new buy signal. If the stock can trade over the $76.00 level it will produce a new P&F chart buy signal. We are suggesting a trigger to buy calls at $75.85. More conservative traders can wait for the move over $76. We have two targets. Our first target is the $79.75-80.00 range. Our second, more aggressive target is the $82.50-84.00 range. Please note that in the wrap Tuesday night Jim pointed out that there is a seasonal pattern of weakness in the second half of September. Readers may want to keep that in mind and just pass on any new bullish candidates. FYI: The latest data puts short interest at more than 13% of the 16-million share float. That's a high degree of short interest and raises the risk of a short squeeze, which would be great news for our long play!

Suggested Options:
We are suggesting the October calls. Our suggested trigger to open positions is at $75.85.

BUY CALL OCT 75.00 TGI-JO open interest=120 current ask $4.10
BUY CALL OCT 80.00 TGI-JP open interest= 60 current ask $1.90

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 275 thousand

New Puts

U.S.Steel - X - close: 89.26 change: -2.63 stop: 96.51

Company Description:
United States Steel Corporation headquartered in Pittsburgh, Pa., manufactures a wide variety of steel sheet, tubular and tin products; coke, and taconite pellets; and has a worldwide annual raw steel capability of 26.8 million net tons. (source: company press release or website)

Why We Like It:
An earnings warning from Nucor (NUE) weighed heavily on the steel sector today. Shares of X, which were just upgraded last week, have rolled over. Today's decline (-2.8%) is a breakdown under what should have been support at the $90.00 mark. The technical indicators are turning bearish. We are suggesting puts with X under $90.00. Some of you may want to see more momentum before opening bearish positions so watch for a new low under $87.00. Our target is the $81.00-80.00 range. We do have a wide stop loss because the market has been so volatile lately. The P&F chart is currently bullish but it wouldn't take much to reverse into a new sell signal.

Suggested Options:
We are suggesting the October puts. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY PUT OCT 90.00 X-VR open interest=5961 current ask $5.70
BUY PUT OCT 85.00 X-VQ open interest=9135 current ask $3.40

Picked on September 12 at $ 89.26
Change since picked: - 0.00
Earnings Date 10/31/07 (unconfirmed)
Average Daily Volume = 3.8 million

New Strangles

None today.

New Play Archives