Option Investor
New Plays

New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
CEG None None

Play Editor's Note: The major indices still look bearish but the Russell 2000 index and the XBD broker-dealer index both bounced from their August lows. I would expect the rebound to continue in both indices tomorrow and these could influence the rest of the market!

FYI: Keep an eye on shares of HOG. The stock broke down to a new low today. Watch for a bounce and a failed rally under $48.00 as a potential entry point for puts. It's on our watch list for tomorrow.


New Calls

Constellation Energy - CEG - cls: 100.56 chg: +2.85 stop: 94.45

Company Description:
Constellation Energy (www.constellation.com), a FORTUNE 125 company with 2006 revenues of $19.3 billion, is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. (source: company press release or website)

Why We Like It:
CEG is a bullish candidate with some impressive relative strength. The stock has a steady pattern of higher lows and just broke out from a two-week consolidation to rally past resistance near $100 on strong volume. We are suggesting bullish call positions now or on a dip back toward $98.00, which should be short-term support. Our target is the $107.50-110.00 range.

Suggested Options:
We are suggesting the January calls.

BUY CALL JAN 100 CEG-AT open interest=6924 current ask $5.10
BUY CALL JAN 105 CEG-AA open interest= 827 current ask $2.60

Picked on November 20 at $100.56
Change since picked: + 0.00
Earnings Date 01/31/08 (unconfirmed)
Average Daily Volume = 1.3 million
 

New Puts

None today.
 

New Strangles

None today.
 

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