Play OII Calls

Oil and Engineering All in One!

By Bryan Bottarelli
Wednesday, October 10, 2007 3:13 PM EDT
Wed, 10 Oct 2007 19:13:00 GMT

Dear Bottarelli Research Member,

Although the Dow is off 100 points today, most is this weakness is attributed to the weakness in Boeing (BA – NYSE). Boy and I glad we had those puts!

From a tactical position, this is why it’s always, always a smart idea to have exposure to both the upside and downside — so I hope you can see this logic working to perfection today.

Now, on the topic of new trades, one of the strongest sectors in today’s session has been the oil service plays. After an extended quiet period, this powerful group could be starting a new upside breakout, as noted by today’s action in the Oil Services HOLDRs (OIH – AMEX). Check it out:

OIH

Using today’s OIH tick as an upside trigger, I’d like to recommend a new call play on a company that I feel perfectly combines two powerful market segments — and that company is Oceaneering International (OII – NYSE).

Similar to our recent winners on MDR, FWLT, and JEC, Oceaneering International provides engineering products and services to the offshore oil and gas industry. But unlike the other names in this group, OII has carved out a niche that focuses on deepwater applications — making them one of the primary players in this exploding field. What you have is a great combination of oil service and engineering — and this could easily lead to extended upside momentum in the weeks that follow. Check out today’s chart and you’ll see what I mean:

OII

To capitalize on further upside, let’s establish a new November call position now. Here’s the play:

PLAY: Buy the OII November 80 Calls (OII KP) at or under $5.10, good for the day. Current bid/ask spread is $4.70 to $4.90. Place a protective stop limit at $2.20.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From October 2007