EOT Trade Alert – March 19, 2008

March 19, 2008

Trade Alert:

   Buy COP May 2008 $75 Calls at $4.00 or better (COPEO)

Brief Company Background:

ConocoPhillips is the third largest integrated energy company in the US.  They actively explore for and produce oil and gas.  The company is also the 5th largest oil refiner in the nation.

Short-Term Catalyst:

Trends in oil and gas industry are undeniable.  Commodity prices, especially those in the energy complex keep setting new high prices.  Oil and natural gas are no exception.  With this sustainable trend in place, now is an opportune time to profit. Momentum is in our favor with the oil and gas stocks.  We’ve had a short term pullback in the price of COP.  I think it’s the perfect place to establish an entry point.

Trade Details:

Option Ticker Symbol:	COPEO
Underlying Stock Symbol:	COP
Current Bid-Ask Price:	$3.60-$3.80
Option “Buy Up To” Price:	$4.00
Break-Even On Stock At Expiration:	$79.00
Maximum Risk Per Contract:	$400

 

Exit Strategy:

NCOP is trading at 73.61.  I see resistance around 79 and 85.  Support levels are 70 and 67.5.

Chart:

Category: EOT Trade Alert