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New Plays

Oil Service Strength

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NEW DIRECTIONAL CALL PLAYS

Core Labs - CLB - close: 69.15 change: +4.91 stop: 64.15

Why We Like It:
Oil service stocks were some of the best performers today. I think the rebound continues for a few more days. CLB has been out performing the last few weeks. Instead of hitting new lows in January the stock has been consolidating sideways. Today's rally is a breakout over its short-term trend of lower highs. This may be an aggressive entry point with the $70.00 level just overhead. I am suggesting call positions now but more conservative traders may want to use an entry point above $70.00.

My first target is $73.75 and we want to take most of the position off the table here. The $75 level and the 100-dma might be resistance. We would keep a small position open and aim for a secondary target at $79.00 since the $80.00 level is resistance.

Suggested Options:
We are suggesting the February calls. FYI: March options have more open interest.

BUY CALL FEB 65.00 CLB-BM open interest= 65 current ask $8.00
BUY CALL FEB 70.00 CLB-BN open interest= 90 current ask $5.10
BUY CALL FEB 75.00 CLB-BO open interest= 26 current ask $3.00

Annotated Chart:
CLB

Picked on January 21 at $ 69.15
Change since picked:     + 0.00
Earnings Date          02/11/09 (unconfirmed)
Average Daily Volume =      386 thousand 


Oil Service Holders - OIH - close: 74.59 change: +6.33 stop: 72.45

Why We Like It:
If you don't want the risk of playing an individual stock then consider the OIH oil service holders. I think the oil service sector will continue to rally at least for a few more days. The OIH is a good way to play the sector. I do see resistance at $75.00 so I'm suggesting readers use a trigger at $75.25 to enter call positions. If triggered our target is $79.95. More aggressive traders may want to aim for $82 or $84.

Suggested Options:
I am suggesting the February calls.

BUY CALL FEB 75.00 OID-BW open interest=5185 current ask $5.55
BUY CALL FEB 80.00 OID-BZ open interest=8047 current ask $3.25

Annotated Chart:
OIH

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked:     + 0.00
Earnings Date          00/00/00
Average Daily Volume =      9.9 million  


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