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New Calls

AGCO Corp. - AG - close: 59.45 change: +1.40 stop: 57.75

Company Description:
Founded in 1990, AGCO Corporation (www.agcocorp.com) is a global manufacturer of agricultural equipment and related replacement parts. AGCO offers a full product line including tractors, combines, hay tools, sprayers, forage, tillage equipment and implements, which are distributed through more than 3,000 independent dealers and distributors in more than 140 countries worldwide. (source: company press release or website)

Why We Like It:
It has been a very volatile couple of weeks for AG. The stock has plunged from $70 to $55 and bounced back to $60 again. The sell-off followed its earnings report. The earnings were better than expected but management offered guidance that was below analysts' estimates. The stock is bouncing from support near $55 and its trendline of higher lows. We suspect the stock could bounce back toward $65 and maybe $70 if the agriculture stocks rally again. We're suggesting a trigger to buy calls at $60.40, which is just above Wednesday's high. If triggered at $60.40 our short-term target is the $64.90-65.00 range. FYI: The P&F chart is bullish with a $71 target.

Suggested Options:
Our trigger to buy calls is at $60.40. We're suggesting the June calls.

BUY CALL JUN 60.00 AG-FL open interest=708 current ask $3.90
BUY CALL JUN 65.00 AG-FM open interest=196 current ask $1.95

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 04/28/08 (confirmed)
Average Daily Volume = 1.8 million

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Express Scipts - ESRX - close: 70.96 chg: +1.47 stop: 68.19

Company Description:
Express Scripts, Inc. is one of the largest pharmacy benefit management (PBM) companies in North America, providing PBM services to 55 million patients through facilities in 13 states and Canada. (source: company press release or website)

Why We Like It:
I mentioned ESRX as a bullish candidate in the MarketMonitor today. The stock is bouncing from the bottom of its bullish channel and breaking out from a two-week consolidation phase. We're suggesting readers buy calls now and we'd use a stop under the recent lows. We do expect some resistance at $74.25 but our target is the $77.00-80.00 range. More conservative traders will want to consider taking some profits off the table near $75.00. The Point & Figure chart is bullish with a $81 target.

Suggested Options:
We're suggesting the June calls.

BUY CALL JUN 70.00 XTQ-FN open interest= 421 current ask $4.10
BUY CALL JUN 75.00 XTQ-FO open interest=2333 current ask $1.80

Picked on May 08 at $ 70.96
Change since picked: + 0.00
Earnings Date 04/29/08 (confirmed)
Average Daily Volume = 2.8 million
 

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