NEW DIRECTIONAL CALL PLAYS
Continental Resources â€“ CLR â€“ close: 86.98 change: +1.92
Stop Loss: 84.65
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
CLR surged to new multi-month highs in mid-March. Since then the stock has been hit with profit taking as investors sell on worries about the founder's upcoming divorce from his wife. Harold Hamm, the CEO and Chairman of CLR, has nearly all of his $11.3 billion wealth tied up in shares of CLR. His soon to be ex-wife, Sue Ann, could get up to half of his fortune, about $5.3 billion, and a lot of that would be CLR stock. Mr. Hamm would no longer have a controlling stake in the company and nervous investors have been locking in profits.
We suspect the divorce issue will be a non-event. Shares of CLR are starting to bounce from their trend of higher lows, which just happens to be near support near $85.00 and its simple 50-dma. I would consider this a slightly more aggressive trade so readers may want to limit their position size. We're suggesting new bullish call positions now, at the opening bell tomorrow morning. We'll use a stop loss below Friday's low.
- Suggested Positions -
Buy the Apr $90 call (CLR1320D90) current ask $1.30
Entry on March 26 at $---.--
Average Daily Volume = 1.2 million
Listed on March 25, 2012