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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
PCLN MMM AMGN
TAP    

New Calls

Priceline.com - PCLN - close: 130.39 chg: +1.68 stop: 126.99

Company Description:
Priceline.com Incorporated provides online travel services in 21 languages in over 60 countries in Europe, North America, Asia, the Middle East and Africa. (source: company press release or website)

Why We Like It:
PCLN exploded to new highs a couple of weeks ago on its earnings news. Now the stock has pulled back to fill the gap. Traders are buying PCLN near its trendline of higher lows (see chart). The stock can be very volatile so we consider this an aggressive, higher-risk play, but the bounce looks like a potential entry point. Just to be sure we want to see more follow through so we're suggesting a trigger to buy calls at $132.75. If triggered our target is the $139.50-140.00 zone. FYI: We do want to point out that the consolidation over the past two weeks has turned the P&F chart bearish.

Suggested Options:
Remember, this is an aggressive play. PCLN can be a volatile stock. Our suggested entry point to buy calls is at $132.75.

BUY CALL JUN 130 PUZ-FW open interest= 888 current ask $6.60
BUY CALL JUN 135 PNE-FG open interest= 944 current ask $4.30
BUY CALL JUN 140 PNE-FH open interest=1845 current ask $2.65

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/08/08 (confirmed)
Average Daily Volume = 1.5 million

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Molson-Coors Brewing - TAP - cls: 58.05 chg: +1.55 stop: 55.49

Company Description:
Molson Coors Brewing Company is one of the world's largest brewers. It brews, markets and sells a portfolio of leading premium quality brands such as Coors Light, Molson Canadian, Molson Dry, Carling, Coors, and Keystone Light. It operates in Canada, through Molson Canada; in the US, through Coors Brewing Company; in the UK and Europe, through Coors Brewers Limited. (source: company press release or website)

Why We Like It:
Shares of TAP displayed relative strength today. The stock rallied to resistance near $58.00 again. Now after two weeks of trying to breakout we think TAP might be able to do it. A failure here would be a very wide and very bearish double-top pattern (see chart). A breakout should spark another wave of short covering. We're suggesting a trigger to buy calls at $58.51. If triggered our target is the $64.00-65.00 range. The P&F chart is bullish with a $69 target.

Suggested Options:
We are suggesting the June or July 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 JUN 60.00 TAP-FL open interest=1526 current ask $0.75

BUY CALL JUL 60.00 TAP-GL open interest= 438 current ask $1.50
BUY CALL JUL 65.00 TAP-GM open interest= 325 current ask $0.30

Annotated Chart:

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/07/08 (unconfirmed)
Average Daily Volume = 1.1 million
 

New Puts

3M Co. - MMM - close: 76.64 chg: +0.52 stop: 77.01

Company Description:
A recognized leader in research and development, 3M produces thousands of innovative products for dozens of diverse markets. 3M's core strength is applying its more than 40 distinct technology platforms - often in combination - to a wide array of customer needs. With $24 billion in sales, 3M employs 75,000 people worldwide and has operations in more than 60 countries. (source: company press release or website)

Why We Like It:
MMM has been consolidating sideways for four months. The stock's bullish breakout from its bearish channel back in March never saw any follow through. Now shares of MMM are nearing support around $75.00. A breakdown can be used as a new entry point to buy puts. Our suggested trigger to buy puts is at $74.95. If triggered our first target is the $70.25-70.00 zone. Our secondary target is the $66.00-65.00 range. The P&F chart is bearish with a $69 target.

Suggested Options:
We are suggesting the June or July puts. Our suggested entry point to open positions is at $74.95.

BUY PUT JUN 75.00 MMM-RO open interest=4387 current ask $1.00
BUY PUT JUN 70.00 MMM-RN open interest=1148 current ask $0.25

BUY PUT JUL 75.00 MMM-SO open interest=5179 current ask $1.85
BUY PUT JUL 70.00 MMM-SN open interest=3914 current ask $0.65

Picked on May xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 4.0 million
 

New Strangles

Amgen Inc. - AMGN - close: 42.77 chg: +0.67 stop: n/a

Company Description:
Amgen discovers, develops, manufactures and delivers innovative human therapeutics. A biotechnology pioneer since 1980, Amgen was one of the first companies to realize the new sciences promise by bringing safe and effective medicines from lab, to manufacturing plant, to patient. (source: company press release or website)

Why We Like It:
Biotech giant AMGN has seen its stock narrow into an increasingly smaller trading range. This can't happen forever so a breakout is imminent. We're suggesting a strangle to take advantage of any change in trend. Aggressive traders could try the June options. Everyone else can use the July options. We would open strangle positions in the $42.00-43.00 zone.

Suggested Options:
A strangle involves buying both an out of the money call and an out of the money put. This is a neutral strategy. We don't care what direction the stock goes as long as it moves enough to push one side of the trade into a profitable position. Traders will want to try and balance the amount of their investment on both side of the trade to keep it neutral.

June strangle: Our estimated cost is $0.56. We want to sell if either option hits $1.10 or more. June options expire in four weeks.

BUY CALL JUN 45.00 AMQ-FI open interest=6370 current ask $0.29
-and-
BUY PUT JUN 40.00 AMQ-RH open interest=6192 current ask $0.27

July strangle: Our estimated cost is $1.65. We want to sell if either option hits $3.50.

BUY CALL JUL 45.00 AMQ-GI open interest=13430 current ask $0.92
-and-
BUY PUT JUL 40.00 AMQ-SH open interest=12507 current ask $0.73

Picked on May 22 at $ 42.77
Change since picked: + 0.00
Earnings Date 07/24/08 (unconfirmed)
Average Daily Volume = 6.7 million
 

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