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AMZN None None
BHI    
USO    
     
     

Play Editor's Note: The market delivered some surprising strength on election day. It is conceivable that stocks might see an post-election pop. If you're a nimble enough trader I'd consider shorting such a pop. My plan is to buy a dip. It may not be tomorrow but it should occur in the next few days.

FYI: Check out these stocks. WYNN delivered an interesting bounce this afternoon. This might be a bullish entry point but use a stop under today's low. FCX was a big winner today. I would not chase it. A dip back toward $30.00 would be a big entry point to buy calls. STRA has been screaming higher but today's session looks like a big bearish reversal. This looks like an aggressive entry point to buy puts.


NEW DIRECTIONAL CALL PLAYS

Amazon.com - AMZN - close: 58.45 change: +2.68 stop: 54.75

Why We Like It:
AMZN has found new support near the $55.00 level. I will admit that today's bounce from this new support looks like a new entry point to buy calls. However, my big picture bias is for a market correction after such a multi-day rally. AMZN will not be immune to a market dip so we would rather wait for the entry point. Our plan is to buy calls on a dip into the $56.00-55.00 zone. There is some additional resistance near $60.00 but our target is 64.00. FYI: The P&F chart is bullish with an $80 target.

Suggested Options:
We are suggesting the November or December calls. The November calls expire in less than three weeks. The December strikes give us a lot more time.

BUY CALL NOV 55.00 ZQN-KK open interest=6699 current ask $5.85
BUY CALL NOV 60.00 ZQN-KL open interest=10373 current ask $2.95
BUY CALL NOV 65.00 ZQN-KM open interest=5920 current ask $1.15

BUY CALL DEC 60.00 ZQN-LL open interest=2340 current ask $5.25
BUY CALL DEC 65.00 ZQN-LM open interest=23295 current ask $3.20

Annotated Chart:
AMZN

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =      11.3 million  


Baker Hughes - BHI - close: 37.14 change: +3.92 stop: 32.30

Why We Like It:
Oil service stock BHI delivered some big moves today thanks to a gain in crude oil prices. The stock, like many oil services, appears to have produced a bottom. Volume on today's rally was not very strong and we suspect there will be room for a pull back. Our plan is to buy a dip in the $34.50-34.00 zone with a stop loss at $32.30. If triggered our first target is $39.75. We are tentatively setting a secondary target at $43.50 but suggest readers take most if not all of their money off the table at $39.75. The Point & Figure chart has a new buy signal with a $46 target.

Suggested Options:
We are suggesting the November or December calls. The November calls expire in less than three weeks. The December strikes give us a lot more time.

BUY CALL NOV 35.00 BHI-KG open interest=2929 current ask $4.00
BUY CALL NOV 40.00 BHI-KH open interest=2563 current ask $1.30

BUY CALL DEC 35.00 BHI-LG open interest= 494 current ask $5.30
BUY CALL DEC 40.00 BHI-LH open interest= 541 current ask $2.65

Annotated Chart:
BHI

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           01/29/09 (unconfirmed)
Average Daily Volume =       8.5 million  


United States Oil (ETF) - USO - close: 57.38 change: +4.89 stop: 51.95

Why We Like It:
Jim has already discussed what moved oil in his wrap tonight. I see the rally today as a breakout from a two-week consolidation, base-building bottom. The MACD has turned positive on the daily chart. Volume was strong on today's move. Yet we still don't want to chase a 9% gain in the USO. We're suggesting readers buy calls on a dip into the $55.65-54.00 zone. If triggered our first target is $59.90. Our second target is $64.50 although I actually see some resistance around $62.50. The Point & Figure chart has produced a triple-top breakout buy signal with a $69 target.

Suggested Options:
We are suggesting the November or December calls. The November calls expire in less than three weeks. The December strikes give us a lot more time. Strikes are available in $1.00 increments.

BUY CALL NOV 55.00 USO-KK open interest=2027 current ask $5.70
BUY CALL NOV 60.00 USO-KL open interest=4249 current ask $3.20

BUY CALL DEC 55.00 USO-LK open interest= 644 current ask $7.60
BUY CALL DEC 60.00 USO-LL open interest=1342 current ask $5.20

Annotated Chart:
USO

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =      12.3 million  


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