Option Investor
New Plays

Biotech, Gold & Communications

HAVING TROUBLE PRINTING?
Printer friendly version

New Option Plays
Call Options Plays
Put Options Plays
Strangle Options Plays
None GILD None
  GLD  
  JOYG  
  MICC  
     
     
     

NEW DIRECTIONAL PUT PLAYS

Gilead Sciences - GILD - close: 44.14 change: -0.70 stop: 46.05

Why We Like It:
The technical picture in GILD is deteriorating. The stock's recent rally attempt failed at its exponential 200-dma. The P&F chart is still bullish but additional short-term technicals are beginning to point lower. The stock had an incredible run from 2003 through 2008 so there is plenty of room for profit taking.

We're suggesting readers buy puts when GILD hits $43.65, which is just under today's low. If triggered we have two targets. Our first target is $40.25. Our second target is $37.50.

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 45.00 GDQ-XI open interest= 553 current ask $3.60
BUY PUT DEC 40.00 GDQ-XH open interest=2169 current ask $1.65

Annotated Chart:
GILD

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =      13.1 million  


SPDR Gold ETF - GLD - close: 72.05 change: -1.53 stop: 75.01

Why We Like It:
The rise in the U.S. dollar has pushed the price of gold out and down from its recent sideways consolidation. We currently have a couple of strangle plays on the GLD in our spreads & strangle section. However, with the breakout we want to try and capture part of the decline with some directional put plays.

We're suggesting puts right here with a stop loss above $75.00. Our target is $65.25. More aggressive traders could aim lower.

Suggested Options:
We are suggesting the December puts. Strikes are available in $1.00 increments.

BUY PUT DEC 73.00 GVD-XU open interest=4850 current ask $4.50
BUY PUT DEC 70.00 GVD-XR open interest=2951 current ask $2.95
BUY PUT DEC 65.00 GVD-XM open interest=3640 current ask $1.35

Annotated Chart:
GLD

Picked on November 11 at $ 72.05
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =      19.3 million  


Joy Global Inc. - JOYG - close: 25.92 change: -0.98 stop: 27.31

Why We Like It:
My personal opinion is that the sell-off in JOYG is extremely overdone. This will eventually be a great bullish investment again. However, we have to trade what the market provides and right now that trend is lower. JOYG can be a volatile stock. We're using a relatively wide stop loss.

Our suggested entry point to buy puts is a breakdown under round-number support at $25.00. Our trigger is $24.75. If triggered our target is $20.25. We'd be tempted to switch directions and buy calls on a test of or bounce from the $20.00 region.

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 25.00 JQY-XZ open interest= 696 current ask $3.60
BUY PUT DEC 22.50 JQY-XX open interest= 451 current ask $2.45
BUY PUT DEC 20.00 JQY-XY open interest=1175 current ask $1.60

Annotated Chart:
JOYG

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           12/17/08 (unconfirmed)
Average Daily Volume =       4.1 million  


Millicom Intl. - MICC - close: 36.80 change: -3.60 stop: 42.55

Why We Like It:
The bounce in MICC has reversed. Today's breakdown under round-number support at $40.00 in addition to its 10-dma is very bearish. The stock can be volatile and we're labeling this a very aggressive play based on how wide our stop loss is. We are suggesting bearish positions now. However, a much better entry point would be to wait for a bounce to or failed rally near the $40.00 level. Our first target is $31.00. Our secondary target is $27.00.

Suggested Options:
We are suggesting the December puts.

BUY PUT DEC 35.00 FJM-XG open interest= 146 current ask $4.40
BUY PUT DEC 30.00 FJM-XF open interest= 111 current ask $2.60

Annotated Chart:
MICC

Picked on November 11 at $ 36.80
Change since picked:      + 0.00
Earnings Date           02/12/09 (unconfirmed)
Average Daily Volume =       1.5 million  


New Play Archives