To use the oval tool, just click anywhere on your Flash movie and hold down the mouse button, and drag the mouse to see the outline of your oval take shape. Let go of the mouse button when you're done, and your oval will appear colored in the Fill color that you chose with a line around it in the Stroke color you chose.
Let's make the base for Bobo's ears first. To do that, we need a perfect circle. In order to make a perfect circle, hold down the Shift key, and keep holding it while you draw your oval the same way that you would normally. Draw yours up and a little bit to the left.