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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
CRDN None None
LLL    
TEX    
WFMI    

New Calls

Ceradyne - CRDN - cls: 74.61 change: +1.79 stop: 71.74

Company Description:
Ceradyne develops, manufactures, and markets advanced technical ceramic products and components for defense, industrial, automotive/diesel, and commercial applications. (source: company press release or website)

Why We Like It:
The aerospace/defense sector has been showing relative strength and the group was one of the market's best performers on Tuesday. Traders bought the dip in CRDN near $72 and its 50 and 100-dma. The bounce looks like a new bullish entry point to buy calls. However, CRDN does have some resistance near $75.00. We're suggesting calls now. We strongly suggest that more conservative traders wait for CRDN to clear the $75 level perhaps with a trigger at $75.26. Our short-term target is the $79.50-80.00 range. The P&F chart is bullish with a $92 target.

Suggested Options:
We are suggesting the October or November calls. It is up to you, the individual reader, to decide which month and which strike price best suits your trading style and risk. Keep in mind that October strikes expire in less than four weeks.

BUY CALL OCT 70.00 AUE-JN open interest=543 current ask $5.90
BUY CALL OCT 75.00 AUE-JO open interest=939 current ask $2.75
BUY CALL OCT 80.00 AUE-JP open interest=1099 current ask $1.00

BUY CALL NOV 75.00 AUE-KO open interest=280 current ask $4.80
BUY CALL NOV 80.00 AUE-KP open interest= 51 current ask $2.65

Picked on September 25 at $ 74.61
Change since picked: + 0.00
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 653 thousand

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L-3 Comm. - LLL - cls: 100.96 chg: +1.64 stop: 95.99

Company Description:
Headquartered in New York City, L-3 Communications employs over 63,000 people worldwide and is a prime system contractor in aircraft modernization and maintenance, C3ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance) systems and government services. L-3 is also a leading provider of high technology products, systems and subsystems. The company reported 2006 sales of $12.5 billion. (source: company press release or website)

Why We Like It:
LLL is another defense-related stock in rally mode. Shares have been consolidating sideways for weeks but today's breakout over the $100 mark looks pretty bullish. There is some resistance with the July and August highs near $105 but we suspect that LLL can hit new highs. Our target is the $107.50-110.00 range. If LLL can trade over $102 it will produce a new triple-top breakout buy signal on the P&F chart. We're suggesting a stop loss at $95.99 but it looks like readers might be able to get away with a stop closer toward $98.

Suggested Options:
We are suggesting the October or November calls. It is up to you, the individual reader, to decide which month and which strike price best suits your trading style and risk. Keep in mind that October strikes expire in less than four weeks.

BUY CALL OCT 100 LLL-JT open interest= 906 current ask $3.30
BUY CALL OCT 105 LLL-JA open interest=1089 current ask $1.10

BUY CALL NOV 100 LLL-KT open interest= 25 current ask $4.90
BUY CALL NOV 105 LLL-KA open interest= 69 current ask $2.45
BUY CALL NOV 110 LLL-KB open interest=101 current ask $1.05

Picked on September 25 at $100.96
Change since picked: + 0.00
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 904 thousand

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Terex - TEX - cls: 86.50 change: +2.05 stop: 79.99

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. (source: company press release or website)

Why We Like It:
TEX is breaking out higher. Shares have built a base along the $75-80 zone for the last few weeks and now we're seeing the beginning of a new leg higher. Shares have cleared resistance at the 50-dma, 100-dma and the $85 level. Plus, the P&F chart is very bullish with a $100 target. We're suggesting bullish call positions now with TEX above $85. There will likely be some resistance near $90 but our target is the $94-95 range.

Suggested Options:
We are suggesting the October or November calls. It is up to you, the individual reader, to decide which month and which strike price best suits your trading style and risk. Keep in mind that October strikes expire in less than four weeks.

BUY CALL OCT 85.00 TEX-JQ open interest=2528 current ask $4.50
BUY CALL OCT 90.00 TEX-JR open interest=2164 current ask $2.15

BUY CALL NOV 85.00 TEX-KQ open interest= 18 current ask $6.80
BUY CALL NOV 90.00 TEX-KR open interest= 33 current ask $4.40

Picked on September 25 at $ 86.50
Change since picked: + 0.00
Earnings Date 10/25/07 (unconfirmed)
Average Daily Volume = 1.8 million

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Whole Foods - WFMI - cls: 45.72 change: +0.66 stop: 42.49

Company Description:
Founded in 1980 in Austin, Texas, Whole Foods Market is the world's leading natural and organic foods supermarket and America's first national certified organic grocer. In fiscal year 2006, the company had sales of $5.6 billion and currently has more than 270 stores in the United States, Canada, and the United Kingdom. (source: company press release or website)

Why We Like It:
The recent concerns over a slow down in retail are not impacting shares of high-end grocer WFMI. The stock has been consolidating sideways for weeks but the stock looks like it's on the verge of a major breakout higher. Technicals are improving and the P&F chart points to a $67 target. We are suggesting a trigger to buy calls at $46.26. If triggered our first target is the $49.75-50.00 range. Our second target is the $52.50-55.00 zone. We do not want to hold over the early November earnings report. We're suggesting a stop loss at $42.49 but it looks like readers might be able to get away with a stop much closer around $44.00.

Suggested Options:
We are suggesting the October or November calls. It is up to you, the individual reader, to decide which month and which strike price best suits your trading style and risk. Keep in mind that October strikes expire in less than four weeks.

BUY CALL OCT 45.00 FMQ-JI open interest=4808 current ask $1.79
BUY CALL OCT 50.00 FMQ-JJ open interest=3395 current ask $0.18

BUY CALL NOV 45.00 FMQ-KI open interest= 8727 current ask $3.10
BUY CALL NOV 50.00 FMQ-KJ open interest=10772 current ask $1.08

Picked on September xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 11/01/07 (unconfirmed)
Average Daily Volume = 3.2 million
 

New Puts

None today.
 

New Strangles

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