Option Investor
New Plays

New Option Plays

HAVING TROUBLE PRINTING?
Printer friendly version
Call Options Plays
Put Options Plays
Strangle Options Plays
DE None None
DST    
GR    
OEX    
PCZ    
QQQQ    
RIMM    

New Calls

Deere Co. - DE - close: 152.73 change: +2.18 stop: 144.45

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. (source: company press release or website)

Why We Like It:
DE has recovered from its mid-October slide. The stock looks like it's done consolidating and ready for another leg higher. This is going to be a two-and-a-half week play if DE reports earnings on November 21st. Shares of DE have a bullish trend of higher lows and the technical indicators are improving. The P&F chart is bullish with a $218 target. We're suggesting call positions following Friday's intraday rebound. Our stop loss is at $144.45, just under the rising 50-dma. More conservative traders could put their stop closer to Friday's low (148.50). There is some resistance near $155 and $157 but we have two targets. Our first target is the $159.50-160.00 range. Our second target is the $164.00-165.00 zone.

Suggested Options:
We are suggesting the December calls but plan to exit ahead of the mid November earnings report.

BUY CALL DEC 150 DE-LJ open interest=2346 current ask $11.80
BUY CALL DEC 155 DE-LK open interest=2483 current ask $ 9.20
BUY CALL DEC 160 DE-LV open interest=2728 current ask $ 7.00

*Note - normally a December $60 or $160 call would end with -LL but the CBOE is listing the Dec. $160 call at DE-LV. Double check with your broker.

Picked on November 04 at $152.73
Change since picked: + 0.00
Earnings Date 11/21/07 (unconfirmed)
Average Daily Volume = 2.4 million

---

DST Systems - DST - close: 86.58 change: +0.77 stop: 83.45

Company Description:
DST Health Solutions delivers applications and outsourcing services to improve efficiency, reduce operational costs, increase speed to market and improve customer service for health plans, consumer-directed health plans, Medicare plans and physician practices. (source: company press release or website)

Why We Like It:
DST has had a very rocky month in October. The stock ran into a wall at resistance near $87.00. Then it plunged on its earnings report only to find support near $80 and its 100-dma. Then in the last week the stock has rocketed higher again right back to resistance. Technical indicators have improved dramatically on the recent strength. Meanwhile the P&F chart is bullish with a $118 target. We are suggesting a trigger to catch the next breakout at $87.25. If triggered our target is the $94.00-95.00 range.

Suggested Options:
We are suggesting the December or January calls. Our trigger to open positions is at $87.25. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY CALL DEC 85.00 DST-LQ open interest= 10 current ask $4.60
BUY CALL DEC 90.00 DST-LR open interest= 1 current ask $2.15

BUY CALL JAN 85.00 DST-AQ open interest=2664 current ask $5.60
BUY CALL JAN 90.00 DST-AR open interest= 314 current ask $3.10

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/22/07 (confirmed)
Average Daily Volume = 606 thousand

---

Goodrich Corp. - GR - close: 70.29 change: +1.78 stop: 66.90

Company Description:
Goodrich Corporation, a Fortune 500 company, is a global supplier of systems and services to aerospace, defense and homeland security markets. With one of the most strategically diversified portfolios of products in the industry, Goodrich serves a global customer base with significant worldwide manufacturing and service facilities. (source: company press release or website)

Why We Like It:
This is another play in the defense sector, which has been hitting new highs. While GR has a bullish long-term trend the stock has been trading sideways for almost a month. We are now seeing signs that suggest the stock is ready to breakout into a new leg higher. We're suggesting a trigger to buy calls at $71.05, which would be a new high. We'll place our stop under last Thursday's low. If triggered at $71.05 our targets are the following. Our conservative target is the $74.90-75.00 range. Our more aggressive target is the $78.00-80.00 range. The P&F chart is bullish and points to a $99 target.

Suggested Options:
We are suggesting the December or February calls. Our trigger to open positions is at $71.05. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY CALL DEC 70.00 GR-LN open interest=160 current ask $3.20
BUY CALL DEC 75.00 GR-LO open interest=306 current ask $1.20

BUY CALL FEB 70.00 GR-BN open interest=5295 current ask $4.90
BUY CALL FEB 75.00 GR-BO open interest= 247 current ask $2.75

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 1.0 million

---

S&P 100 Index - OEX - close: 704.95 chg: -0.51 stop: 694.99

Company Description:
This is the Standard & Poor's 100 index.

Why We Like It:
Both the S&P 500 and the S&P 100 look like they have produced a bullish double-bottom over the last couple of weeks. Friday's big rebound from support is our entry point to buy calls. However, we want to warn readers that the OEX and the options can be volatile! We're suggesting positions now. More conservative traders may want to see a rally past $710 first. We have two targets. Our first target is the $724-725 range. Our second, more aggressive target is the $734-735 zone. FYI: The options are expensive. We would consider this higher-risk!

Suggested Options:
We are suggesting the December or January 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 DEC 705 OEZ-LA open interest= 122 current ask $23.60
BUY CALL DEC 710 OEZ-LB open interest=1068 current ask $20.50
BUY CALL DEC 715 OEZ-LC open interest= 303 current ask $17.60
BUY CALL DEC 720 OEZ-LD open interest=2334 current ask $14.80
BUY CALL DEC 725 OEZ-LE open interest= 155 current ask $12.40

BUY CALL JAN 710 OEZ-AB open interest= 259 current ask $26.70
BUY CALL JAN 720 OEZ-AD open interest=1962 current ask $20.90
BUY CALL JAN 730 OEZ-AF open interest= 21 current ask $15.80

Picked on November 04 at $704.95
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = million

---

Petro Canada - PCZ - close: 58.17 change: +2.01 stop: 54.90

Company Description:
Petro-Canada is one of Canada's largest oil and gas companies, operating in both the upstream and downstream sectors of the industry in Canada and internationally. (source: company press release or website)

Why We Like It:
The bulls are back in control of PCZ. The stock found a new bottom in mid October near $53 and its 50 and 100-dma. Now the technical indicators have turned positive again. The P&F chart is bullish and points to a $79 target. We suspect that as crude oil continues to climb the oil sector, including PCZ, will climb with it. Nimble traders might consider buying dips in the $56.50-56.00 area. We are suggesting that readers wait for a new high. That means we need to wait for a breakout over resistance at $59.00. Our trigger to buy calls on PCZ will be $59.25. If triggered our target is the $64.50-65.00 range.

Suggested Options:
We are suggesting the December calls. We would suggest Januarys but they aren't available yet. Our trigger to open positions is at $59.25. The Dec $55 or $65 strikes would also work.

BUY CALL DEC 60.00 PCZ-LL open interest=820 current ask $1.90

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 10/25/07 (confirmed)
Average Daily Volume = 742 thousand

---

PowerShares NDX ETF - QQQQ - cls: 54.42 chg: +0.42 stop: 52.49

Company Description:
The QQQQ or Qs is an Exchange Traded Fund (ETF) on the NASDAQ 100 (NDX) index.

Why We Like It:
Large cap technology stocks have been leading the market higher and we see no reason for them to stop. If the markets are going to rally into the fourth quarter and see a traditional Christmas surge higher than the Qs should be a good bet. We are suggesting call positions now. Our stop loss is at $52.49 but more conservative traders might be able to get away with a tighter stop. Our target is the $58.00-60.00 range.

Suggested Options:
We are suggesting the December or January strikes. Strike prices are available in $1.00 increments. If you don't like the strikes we suggest there are plenty more to choose from.

BUY CALL DEC 54 UQQ-LB open interest=8672 current ask $2.53
BUY CALL DEC 55 UQQ-LC open interest=9452 current ask $1.90
BUY CALL DEC 56 UQQ-LD open interest=8035 current ask $1.38
BUY CALL DEC 57 UQQ-LE open interest=9704 current ask $0.98

BUY CALL JAN 55 QQQ-AC open interest=111163 current ask $2.27
BUY CALL JAN 57 QUE-AE open interest= 27433 current ask $1.31

Picked on November 04 at $ 54.42
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 125 million

---

Research In Motion - RIMM - cls: 126.95 chg: +4.87 stop: 117.49

Company Description:
Research In Motion is a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information including email, phone, SMS messaging, Internet and intranet-based applications. (source: company press release or website)

Why We Like It:
RIMM is one of the high-flying momentum stocks that is leading the market higher. Shares barely felt any profit taking during Thursday's market meltdown. That sort of relative strength is pretty tempting. The stock is volatile and the options are expensive but this looks like a good spot to jump on the bandwagon. More nimble traders could try and wait for a dip in the $123-120 zone. Or if you want to see RIMM clear its high then wait for a rally past $128.40. Our target is the $138.00-140.00 range. More aggressive traders could aim higher. The P&F chart is forecasting a $163 target.

Suggested Options:
We are suggesting the December or January 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 DEC 130 RUL-LV open interest=5725 current ask $11.05
BUY CALL DEC 135 RUL-LW open interest=4194 current ask $ 9.10
BUY CALL DEC 140 RUL-LH open interest=3564 current ask $ 7.50

BUY CALL JAN 130 RUL-AV open interest=4386 current ask $13.90
BUY CALL JAN 135 RUL-AW open interest=4605 current ask $11.90
BUY CALL JAN 140 RUL-AH open interest=2909 current ask $10.20

Picked on November 04 at $126.95
Change since picked: + 0.00
Earnings Date 12/20/07 (unconfirmed)
Average Daily Volume = 20.9 million
 

New Puts

None today.
 

New Strangles

None today.
 

New Play Archives