Next page... 4       On May 5, OPEC’s Iranian gover-
nor told Platts: “The market is more
than oversupplied. The ball is not in
OPEC’s court anymore.”       Citigroup projected May crude
supplies increasing anywhere
between 500,000 barrels and 2.5
million barrels—a broad range that
might allow the market to
consolidate above the US$50-a-
barrel mark.       Back in March, OPEC’s 500,000
barrel-per-day increase helped drop
prices from record highs. But because
the effect wasn’t immediate, I believe
there’s more than supply and demand
tugging at the reins.       George Jahn of the Associated
Press thinks traders are focusing on
“fears that producers will have trou-
ble keeping the market adequately
supplied longer term.” And I agree
with him.       Quoted on to the Dow Jones
Newswire, Qatar’s oil minister,
Abdullah Hamad al-Attiyah, says:
“OPEC is at its highest production in
history. I am concerned that if we reach the full capacity now, we will
tighten in the fourth quarter. The
spare capacity will be smaller and
smaller, reaching a plateau when
there is no more oil.”       That doesn’t bode well, consider-
ing we’re in the midst of the summer
season, when many Americans tradi-
tionally take vacations and road trips.
Though we’re well supplied, contin- ued oil speculation, residual fear and
strong demand mean we’re likely to
see oil and oil stocks rise through the
season and into winter should supply
fears hang around.       Take a look at the chart to see how
light sweet crude oil bounced in early
May.       The 50% retracement line of the
smaller Fibonacci provided support in From today’s current stock price of
US$74.62, that means I’d expect DNA
to trade for US$93.27 by year’s end.
And this is how you should play it: I
like the DNA January ’06 75 calls (YZJ
AO) trading around US$10.00.       These calls are ever so slightly out
of the money (US$75 strike price
minus DNA’s current US$74.62 stock
price makes them just US$0.38 out of
the money).       But don’t worry. If you read my
“5 Trading Rules” (published in my
free daily newsletter called WaveStrength Market Report), you’ll
recall that slightly out-of-the-money
options are actually the most power-
ful ones you can buy—simply
because the moment they move
from out-of-the-money to in-the-
money, they’ll be assigned a second
price premium in the form of intrin-
sic value. As it stands today, these
calls are priced at nothing but extrin-
sic value (time value). But if the
uptrend in DNA continues, that’ll
soon change.       Running a quick price calculation,
if DNA stock moves from US$74.62 up to US$93.27 by year’s end,
these calls will go from US$8.80
up to US$17.00, good for a 93%
gain.       Longer-term Taipan options
play: Buy the DNA January ’06 75
calls (YZJ AO) at or under US$10.
As a measure of protection, place
a stop loss at US$4.50.       Bryan Bottarelli serves as Chief
Play Tactician at the WaveStrength
technical analysis investment service
and the WaveStrength Market Report
e-letter. ¦ As oil swells to $60, you can turn the
impending domestic exploration boom
into your personal profit bonanza S T R A T E G I C   W E A L T H By Sara Nunnally