NEW DIRECTIONAL CALL PLAYS
Thompson Creek Metals - TC - close 11.28 change +0.53 stop 10.45
Target(s): 11.75, 12.40
Key Support/Resistance Areas: 12.60, 11.80, 11.00, 10.55
Time Frame: 1 to 3 weeks
Thompson Creek Metals Company Inc. (Thompson Creek) is a molybdenum mining company with vertically integrated mining, milling, processing and marketing operations in Canada and the United States. The Company's operations include the Thompson Creek producing open-pit molybdenum mine and concentrator (the Thompson Creek Mine) in Idaho, the Langeloth metallurgical facility (the Langeloth Facility) in Pennsylvania and a 75% joint venture interest in the Endako producing open-pit molybdenum mine, concentrator and roaster (the Endako Mine) in British Columbia. In addition, the Corporation has two underground molybdenum exploration projects comprised of an option to acquire up to 75% of the Mount Emmons molybdenum property (Mount Emmons Project), located in Colorado, and the Davidson molybdenum property (Davidson Project), located in British Columbia.
Why We Like it:
It seems there is no stopping the basic materials sector as the lackluster employment report is sure to be followed by additional stimulus. Molybdenum is high strength metal and is used to make aircraft parts, electrical contacts, industrial motors and filaments to name a few. Technically, TC broke through resistance near $11.00 and touched its 200-day SMA on Friday. I would like to see the stock retrace some of those gains and suggest we enter long positions with a trigger of $11.10 which is -18 cents lower than Friday's close. Our targets are about +6% and +11.5% higher than our trigger.
Suggested Position: Buy November $11.00 CALL, current ask $1.00, estimated ask at entry $0.90
Entry on October XX
Earnings 10/4/2010 (unconfirmed)
Average Daily Volume: 1.7 million
Listed on October 9, 2010
NEW DIRECTIONAL PUT PLAYS
Whole Foods Market - WFMI - close 34.57 change -0.65 stop 37.10
Whole Foods Market, Inc. (Whole Foods Market) owns and operates a chain of natural and organic foods supermarkets. As of September 2009, it operated 284 stores: 273 stores in 38 states and the District of Columbia; six stores in Canada, and five stores in the United Kingdom.
Target(s): 32.80, 31.80, 31.05
Key Support/Resistance Areas: 36.00, 35.00, 34.00, 32.80, 31.00
Time Frame: 1 to 2 weeks
Why We Like It:
A weak consumer does not bode well for a high end supermarket like WFMI. There is some serious selling happening in stock over the past few days that feels like an institution. WFMI has support at $34.00 which is where the stock is hanging onto, but it is making lower highs in the process, i.e. a descending triangle. The stock is now below all of its moving averages which should keep bounces in check. I would like to see the bounce continue up towards its 200-day SMA which sets up a good shorting opportunity. However, a break below $34.00 should also be considered. Let's use a bounce to $35.65 or a breakdown to $33.85 as triggers to enter short positions. WFMI has a gap to fill all the way down near $31.00.
Trigger: $35.65 or $33.85
Suggested Position: Buy November $33.00 PUT, current ask $1.24
Entry on October xx
Earnings: 11/3/2010 (unconfirmed)
Average Daily Volume: 2.5 million
Listed on October 9, 2010