Dykstra's Deep-in-the-Money Call: TI

Cleveland's brass is saying it expects Hafner to snap out of it. To them it's a matter of "when," not "if," he returns to form.

With many athletes, a prolonged slump can be an indication of deteriorating skills, an injury or ailment, loss of confidence or any number of factors that could ultimately decrease a player's value.

It's key to correctly determine whether the slump is a short-term event and the player will bounce back, or if the player is on the downside of his career.

These same principles apply to picking stocks. The answer to this very basic question will help you determine whether a company is worth investing in.

Regular readers of my column have sent me emails asking if picking stocks near their 52-week lows is the major part of my process. It's an important piece of the puzzle, but it is just one of many factors. There are a lot of bad companies trading at their lowest levels in the last 12 months and we don't want to get on a sinking ship.

So today, I am going with a company that is down, but still has a lot of life left in it: chip-maker Texas Instruments(TXN Quote).

Texas was in the news on Tuesday when it formed an alliance with Intel(INTC Quote), Infineon(IFX Quote) and Panasonic to push for standards on how home entertainment products will work with each other.

The stock is trading near its 52-week low of $27.51. It closed down 52 cents, or 1.7%, yesterday at $29.16. Its highest point in the last year was $39.63. I think this company will be on the rise again.

That's why I am placing an order to buy 10 DITM calls going all the way out until January 2009. I will place a limit order at $7.90, or better, for the $22.50 (VXTAX ) calls. That should leave plenty of time for the company to get back in the swing of things. If the order is filled, don't forget to place a GTC sell order $1.00 above the fill price.

Always Remember: Life is a journey, enjoy the ride!