Three New Call Plays

Equal Out the Ledger with MON, OATS, and ATPG

By Bryan Bottarelli
Thursday, May 04, 2006 10:56 AM EST
Thu, 4 May 2006 15:56:00 GMT

PLAY: Buy the MON July 85 Calls (MON GQ) at or under $7.20, good for the day. Place a protective stop loss at $3.50.

PLAY: Buy the OATS July 17.5 Calls (QOQ GW) at or under $2.90, good for the day. Place a protective stop loss at $1.20.

PLAY: Buy the ATPG June 45 Calls (HKU FI) at or under $4.80, good for the day. Place a protective stop loss at $2.70.

Dear Bottarelli Research Member,

I’ve watched it enough — it’s time to buy calls on Monsanto (MON – NYSE). But unlike our recent plays, I’d like to make this one more of a longer-term hold (for us, “longer term” means 1-2 months as opposed to 1-2 days).

MON

PLAY: Buy the MON July 85 Calls (MON GQ) at or under $7.20, good for the day. Place a protective stop loss at $3.50.

Also catching my eye today is the extreme bullishness in the organic food sector. Today, glowing earnings reports from Whole Foods Market Inc. (WFMI – NASDAQ), and lesser-known Wild Oats Markets (OATS – NASDAQ) are pushing each stock higher by 10%. Both are great plays, but the company really on the move is OATS. They just reported a net income of 10 cents a share versus a year-ago loss of 4 cents. This is quite a turnaround.

OATS

PLAY: Buy the OATS July 17.5 Calls (QOQ GW) at or under $2.90, good for the day. Place a protective stop loss at $1.20.

And finally, let’s get positions in ATP Oil & Gas (ATPG – NASDAQ).Like our latest play in SLB, this is one I’ve been watching for a while — and I think it’s on the verge of a breakout.

ATPG

ATP Oil & Gas develops properties in the Gulf of Mexico, the United Kingdom, and the North Sea. They have a leasehold on 76 offshore blocks, 53 platforms, and 147 wells in the Gulf of Mexico plus10 blocks in the North Sea. If the stock could break the $48.00 level, a quick move to the mid-$50’s could be in the cards. So let’s play it up.

PLAY: Buy the ATPG June 45 Calls (HKU FI) at or under $4.80, good for the day. Place a protective stop loss at $2.70.

In terms of our two downside plays, both BDK and PFCB continue to slowly tick higher, but the up-moves are under-performing the overall market strength. I’d like to maintain each position to be protected against any market downside.

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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