EOT Trade Alert – April 3, 2008

April 3, 2008

Trade Alert:

    Buy CBI May 2008 $45 Calls at $4.25 or better (CBIEI) 

Brief Company Background:

Chicago Bridge and Iron is an engineering company that works on large scale projects around the world.  Their emphasis is on projects for energy and natural resource companies.  They design things like petroleum terminals, refineries, gas processing units, and power plants.

Short-Term Catalyst:

The company has fallen from a high of over 60 at the beginning of the year.  I believe the sell-off has been way overdone.  I want to catch a short term bounce in the company shares.  We’ve seen the bounce already start to happen in the last two days with the stock moving higher by almost 5 points.  Watch this trend closely as the move higher could reverse very quickly.

CBI also had a moving average crossover.  This technical indicator indicated the stock has good momentum to the upside. 

Trade Details:

Option Ticker Symbol:	CBIEI
Underlying Stock Symbol:	CBI
Current Bid-Ask Price:	$3.60-$3.80
Option “Buy Up To” Price:	$4.25
Break-Even On Stock At Expiration:	$49.25
Maximum Risk Per Contract:	$425

Exit Strategy:

CBI is trading at 46.06.  Resistance is found at 50 and 52.50.  Support levels are at 42.50 and 40.

Chart:

Category: EOT Trade Alert