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"Whose got your back?'' With the whims of the market, as well as the quick-to-forget nature and on-to-the-next-big-thing excitability that is Mad Money, traders need to have their own back. It's just not enough to wait until 8:00 PM ET and get the "Buy, Buy, Buy!" and occasional "Sell, Sell, Sell!" to stay in the game. Options and having a trading plan in place for the best of times, the worst of times and all the in-betweens allow us to take responsibility for our own actions.

Of course, if we want to enjoy the entertainment of After Hours television, on occasion a good idea or two on top of the laughter might be in the cards as well. On that note, I thought it would interesting to see what Dr. Cramer was pitching to investors last week on the heels of that very ugly market performance that kicked off October.

It turns out Jimmy was still seeing green, not here in the States, but in the former Red China that's turned into many investors favorite growth engine. Drooling over that country's employment data which saw its highest levels of jobs creation in 25 months-Dr. Cramer pounded the table for gaming giant Wynn (WYNN), industrial metals concerns BHP Billiton (BHP) and Freeport Mcmoran (FCX), steel and iron play CVD Rio (VALE) and consumer staples giant Procter & Gamble (PG), all of which have connections to that market.

So, which is still a "Buy, Buy, Buy!!??" Personally speaking, I can't "rec or make wrecks" to other investors portfolios. However, for those willing to do the homework, the observation is Aussie miner and stateside ADR BHP Billiton (BHP) is shaping up the best with regards to its technical tea leaves and option pricing.

Figure 1: BHP Billiton (BHP) Daily

Looking above to the daily chart, we're looking at the last two months of BHP's unsurprising uptrend. There are though, a couple of other nice characteristics about this picture relative to the other plays on China, which stand out. BHP is currently setting up as a confirmed W4 buy that's about 5% removed from the signal bar, but has plenty of percentage room to run to its mid January TAPP estimate around $81.50.

Secondly, the price action of the past two plus months puts BHP in a base-on-base pattern. The action as of Wednesday night also found breaking above potential resistance with the bullish price consolidation used by many growth strategists. Further, clearance above recent highs which failed at a 62% retracement from its May 2008 ATHs sets shares up nicely to move towards the 78% level that happens to match the mid TAPP estimate.

Figure 2: BHP Billiton (BHP)

The one caveat from the price chart of BHP would be the stock, on the shorter-term perspective, does look stretched and poised for a bit of consolidation within the pattern. In consideration of that and similar concerns for the broader market, I'd personally look towards "selling a little something" against the likes of a mostly fair priced January contract. For illustration purposes and perhaps additional homework, a long Jan / Nov 75 call calendar versus Jan 70 / 80 call spread is shown above.

Chris Tyler
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
Visit Chris Tyler's Forum

The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.

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