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Tech, Internet, and an Editor's Note

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Play Editor's Note:
Investors are somewhat nervous about the government's non-farm payrolls (jobs) report due out Friday morning before the opening bell. After the ADP report earlier this week expectations for the jobs report are extremely low. The market is looking for a horrible number. I think this sets up for a surprise to the upside in stocks if we get something less than horrible. The problem is that this is not science. We can't tell what the exact number the market needs to breathe easier and see the rally continue. On the other hand investors could be waiting for the jobs report as just another excuse to sell no matter what the report is. Thus opening new positions tomorrow is a higher-risk, more aggressive proposition. I suggest more conservative traders wait a good thirty to sixty minutes to see the initial reaction to the report before considering positions. If you really want to play it safe just wait until Monday. If the jobs number really is a disaster then we can expect another round of selling.

I am adding some bullish candidates but I would consider them all more aggressive plays at this time. FYI: If any of our new stocks gap down under our stop loss the play should be considered dropped immediately (aborted). We will re-evaluate over the weekend.

Additional candidates - Two more stocks I would consider as aggressive bullish candidates are FSLR and GOOG. FSLR has broken out from a bull flag pattern, which is easier to see on an intraday chart. You could use a stop loss under $145.00 or more conservative traders could use a stop right under $150. There is potential resistance at the 100-dma but I would aim for the $174.00-175.00 zone. With GOOG I would use a tight stop under today's low (probably $324.00). The stock should have resistance at the 100-dma (near $361) so I'd aim for the $355-360 region.


NEW DIRECTIONAL CALL PLAYS

Apple Inc. - AAPL - close: 92.70 change: +1.69 stop: 89.85

Why We Like It:
AAPL is an aggressive, higher-risk bullish play because the stock has been unable to break the bearish trend of lower highs and shares remain under their 50-dma. Plus, there is always the risk of rumors and headlines about Steve Jobs' health. However, on the positive side the stock has bounced from broken resistance and what should be support at $90.00. Given the bullish posture in the tech sector lately AAPL looks poised to rally.

I am suggesting call positions now with a stop loss under $90.00. We do not want to hold over the late January earnings report so this will be a short-term play. Our target first target is $97.00. Our second target is $102.00.

Suggested Options:
We are suggesting the February calls.

BUY CALL FEB 90.00 QAA-BR open interest=4654 current ask $9.35
BUY CALL FEB 95.00 QAA-BS open interest=7204 current ask $6.80
BUY CALL FEB 100.0 QAA-BT open interest=5846 current ask $4.80

Annotated Chart:
AAPL

Picked on January 08 at $ 92.70
Change since picked:     + 0.00
Earnings Date          01/22/09 (unconfirmed)
Average Daily Volume =       30 million  


Amazon.com - AMZN - close: 57.16 change: +0.96 stop: 54.40

Why We Like It:
AMZN has broken out from a multi-week trading range under $55.00. The stock just retested the $55.00-54.50 zone as support today. This is an aggressive bet that the rally continues and that AMZN can push past technical resistance at its 100-dma and the $60.00 mark. Use a tight stop under today's low.

Our first target is $59.95. Our second target is $64.00. We do not want to hold over the late January earnings report so this will be a short-term play.

Suggested Options:
We are suggesting the February calls.

BUY CALL FEB 55.00 ZQN-BK open interest=1241 current ask $7.10
BUY CALL FEB 60.00 ZQN-BL open interest=1396 current ask $4.60

Annotated Chart:
AMZN

Picked on January 08 at $ 57.16
Change since picked:     + 0.00
Earnings Date          01/28/09 (unconfirmed)
Average Daily Volume =      7.7 million  


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