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CEO None None
DE    
FO    

New Calls

CNOOC - CEO - close: 183.47 change: +8.22 stop: 172.49

Company Description:
CNOOC Ltd. is a large, integrated oil and gas company based in China.

Why We Like It:
Oil stocks are breaking out and if you can't beat them then join them. We like CEO because the stock has broken through major resistance back in mid April. Now after three weeks of consolidation the stock is running higher again. The P&F chart displays today's move as a bullish triangle breakout pattern, which is normally one of the most successful patterns to trade in a bull market. The P&F chart suggests a $192 target. I suspect that CEO can trade a lot higher than $192. We are suggesting call positions now but would prefer to buy calls on a dip back toward $180 or $178. Our target is the $199.00-200.00 range. FYI: We have to label this a more aggressive play because the option spreads are so wide!

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 175 CEO-FO Open interest=175 current ask $15.80
BUY CALL JUN 180 CEO-FV open interest=578 current ask $13.10
BUY CALL JUN 185 CEO-FW open interest=410 current ask $10.40
BUY CALL JUN 190 CEO-FX open interest=1285 current ask $8.10
BUY CALL JUN 195 CEO-FY open interest=783 current ask $6.40

Picked on May 06 at $183.47
Change since picked: + 0.00
Earnings Date 04/28/08 (confirmed)
Average Daily Volume = 548 thousand

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Deere & Co. - DE - close: 86.08 change: +1.71 stop: 82.75

Company Description:
Deere & Company, founded in 1837 (collectively called John Deere), has grown from a one-man blacksmith shop into a corporation that today does business around the world and employs approximately 52,000 people. John Deere consists of four major business segments (agricultural equipment, commercial & consumer equipment, construction & forestry and credit). (source: company press release or website)

Why We Like It:
Looking for a short-term play? This might be it. DE has been trying to find a bottom for the last few days. Traders have started buying the dips. Today's session produced a bullish engulfing candlestick pattern and edged past short-term resistance near $86.00. This looks like a new entry point to buy calls. We're suggesting a stop loss under yesterday's low. We have two targets. Our first target is the $89.95-90.00 zone. Our second, more aggressive target is the $94.00-95.00 range. Our biggest challenge is time. DE is due to report earnings on May 14th before the market open. That only gives us five trading days.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 82.50 DE-FS open interest=1653 current ask $7.30
BUY CALL JUN 85.00 DE-FQ open interest=2808 current ask $5.80
BUY CALL JUN 87.50 DE-FT open interest=2962 current ask $4.60
BUY CALL JUN 90.00 DE-FR open interest=7449 current ask $3.50

Picked on May 06 at $ 86.08
Change since picked: + 0.00
Earnings Date 05/14/08 (confirmed)
Average Daily Volume = 5.3 million

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Fortune Brands - FO - close: 69.48 change: +0.44 stop: 67.95

Company Description:
Fortune Brands, Inc. is a leading consumer brands company with annual sales exceeding $8 billion. Its operating companies have premier brands and leading market positions in distilled spirits, home and hardware, and golf products. (source: company press release or website)

Why We Like It:
I highlighted FO as a potential bullish trade in the MarketMonitor today. The stock has been consolidating sideways in the $68-70 range for the last two weeks. It looks like FO is close to bullish breakout over resistance at $70.00. We're suggesting a trigger to buy calls at $70.05. If triggered our target is the $74.00-75.00 range. The 200-dma is technical resistance near $75.00. The P&F chart is bullish with a $95 target.

Suggested Options:
We are suggesting the June calls.

BUY CALL JUN 70.00 XHA-AN open interest=175 current ask $5.70
BUY CALL JUN 75.00 XHA-AO open interest=246 current ask $3.60

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/24/08 (confirmed)
Average Daily Volume = 971 thousand
 

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