Daily Stock Market Equity and Options Trading Commentary

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Sunday, May 10, 2009

Possible Stock and Option Plays for the Week of May 11, 2009

Here is a list of stocks I’ll be keeping my eye on for the week of May 11, 2009. These stocks are all considered to be Breakout Bulls. These are the current highest bull/bear rated stocks my screener has returned. To get a detailed definition of the bull/bear components check my Bull/Bear Ratio Defined post under Hottest Blog Posts.

Delcath Systems Inc DCTH (14:0)
Transcept Pharmaceuticals Inc TSPT (14:0)
AECOM Technology Corp ACM (13:0)
BofI Holding Inc BOFI (13:0)
Embarq Corp EQ (13:0)
MannKind Corp MNKD (13:0)
Spectrum Pharmaceuticals Inc SPPI (14:1)

I would use extreme caution if planning to purchase any of these stocks and would do some extensive research before buying any of them. These will certainly be on my watch list the next few trading days. I'll wait for a 7-10% pull back to purchase any of them and set a tight stop loss if I happen to purchase any of them. If I purchase any of them, I will be selling into strength.

Current Bull/Bear Ratings for many of the stocks I blog about frequently:
Bank of America BAC (11:1)
Goldman Sachs GS (10:1)
Sociedad Quimica y Minera de Chile SQM (9:1)
Caterpillar CAT (9:2)
Citigroup C (9:2)
Visa V (9:2)
Google GOOG (8:3)
Research in Motion RIMM (8:3)
Palm PALM (7:4)
Sirius Satellite Radio SIRI (6:6)

Note that when Ratios are in gold that it means the stock is Range Bound, and when they are green it means they are trending up. To learn more about the Bull/Bear Ratio click here.

Option Maestro's Covered Call Option Power Plays for week of May 11, 2009
***Note*** The net debit is the price the underlying stock must be at in order to break even from buying the stock and writing the covered call. Most brokerages allow you to put a limit order in by this method. Example: If Apple is at $129.00 and the contract bid price for the June 130 is 6.50 you can sell it immediately by buying 100 shares at $129 and selling the call for $6.50 creating a net debit of $122.50. I tend to set the net debit price a bit lower to get the best possible deal. As for the Apple power play below I would set the limit at $122.10 the difference of the two must be $122.10 in order to buy the shares and sell the call.

1. Buy AAPL
Sell AAPL Jun 09 $130.00
Net Debit $122.10

2. Buy CELG
Sell CELG Jun 09 $40.00
Net Debit $36.30

3. Buy GS
Sell GS Jun 09 $145.00
Net Debit $133.50

4. Buy BAC
Sell Jun 09 $15.00
Net Debit $12.30

5. Buy RIG
Sell Aug 09 $70.00
Net Debit $63.90

6. Buy PALM
Sell Jun 09 $11.00
Net Debit $9.70

7. Buy CAT
Sell Jul 09 $38.00
Net Debit $35.40

8. Buy JPM
Sell Jun 09 $39.00
Net Debit $35.90

9. Buy FRO
Sell Jun 09 $22.50
Net Debit $18.30

10. Buy F
Sell Jun 09 $6.00
Net Debit $4.70

Use extreme caution when utilizing these buy/write strategies as the net debit should be adjusted daily with the price of the stock.

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