Option Investor
New Plays

Biomedical Testing & Semiconductors

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Play Editor's Note:
News that the U.S. government was making progress on a "good bank, bad bank" scenario was lifting financial stocks after hours. Nimble traders might want to try very short-term bullish trades on the XLF financial ETF.


Beckman Coulter - BEC - close: 47.39 change: +1.32 stop: 44.95

Why We Like It:
Shares of BEC are kind of stair stepping higher and look ready for the next step up. The stock has been consolidating between $45.00 and $47.50 the last few days. I am listing two different entry points to take advantage of the next move.

The first entry point is to buy calls at $47.55 or higher with a stop loss at $44.95. Our target is $52.40, just under the 100-dma. Our second entry point would be to buy a dip in the $46.00-45.50 zone with the same stop at $44.95.

Suggested Options:
I am suggesting the February calls because we plan to exit before February earnings.

BUY CALL FEB 45.00 BEC-BI open interest= 401 current ask $3.70
BUY CALL FEB 50.00 BEC-BJ open interest=4085 current ask $1.05

Annotated Chart:

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked:     + 0.00
Earnings Date          02/09/09 (unconfirmed)
Average Daily Volume =      729 thousand 

Linear Tech. - LLTC - close: 24.42 change: +0.91 stop: 22.90

Why We Like It:
Semiconductor stock LLTC is showing some relative strength with a breakout over resistance near $24.00 and technical resistance at its 100-dma. I'm suggesting bullish positions now. Our target is $27.40 near the descending trendline of lower highs. FYI: The P&F chart is bullish with a $35 target.

Suggested Options:
I am suggesting the February calls although March options would work just as well.

BUY CALL FEB 25.00 LLQ-BE open interest=3395 current ask $0.70
BUY CALL FEB 27.50 LLQ-BY open interest=1094 current ask $0.15

Annotated Chart:

Picked on January 27 at $ 24.42
Change since picked:     + 0.00
Earnings Date          04/15/09 (unconfirmed)
Average Daily Volume =      6.7 million  

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