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What's On Your Wish List\?

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I'm a big music and movie buff, but don't necessarily consider myself an electronics aficionado. I'm just not the gadgets type. But others are. And they are spending at Best Buy (NYSE:BBY). Or their friends and family are spending for them. The stock hit a new 52-week high today and its recent ascending trend is a thing of bullish beauty.

A lot of technicians I know don't like to buy stocks with an ascending trend line greater than 45 degrees. I think BBY's trend is about as close to that slope as it gets. The trend line reinforces the allure of "buying on the dip." I think the trend line is kind of neat and exciting, but I've been told that I have "issues," so take my excitement for what it's worth.

Best Buy is of course a specialty retailer of consumer electronics. The company reports earnings on December 18 and the stock is one of the strongest in the Retail Sector Index (RLX). I would dare guess that the company is going to report a good quarter judging by the recent rise in its shares. Maybe you're contributing to the rise?

If electronics aren't on your list, maybe a few home repairs were requested. Lowe's (NYSE:LOW), a retailer of home improvement products and Home Depot's (NYSE:HD) biggest competitor, hit a new 52-week high today. Last week, Home Depot reaffirmed fourth quarter guidance, said sales would be flat next year, and outlined a three-year plan to double sales while slowing the expansion of new stores. The news was a double-whammy for Lowe's, who has been gaining ground on its arch rival.

How high will Lowe's trade? Like Best Buy, shares of Lowe's are among the strongest in the retail group. The stock punched through resistance at $40 in early November and hasn't looked back since. My retracement bracket has a short-term price target of roughly $50, and an intermediate-term target of $55.

I don't have any home repairs to make this holiday season, but I recently dropped a few dollars at Autozone (NYSE:AZO). The windshield wipers on my Land Rover needed to be replaced and you wouldn't believe the amount of windshield washing fluid I go through during the winter. Needless to say, I picked up a few bottles of the blue stuff.

Shares of Autozone have been remarkably strong this year. The stock is up by 150 percent year-to-date. It seems like a likely target of end-of-the-year window dressing. Take a look at the ascending wedge on the hourly chart:

Other than the windshield wiper blades and fluid, I hope not to be spending any more money at Autozone. Nothing upsets me more than putting money into a depreciating asset. Hey, aren't options depreciating assets? To digress, I might be in the market for a new, comfy office chair. The big, black leather kind. I hear Office Depot (NYSE:ODP) offers a nice line of office furniture.

The top office supply retailer recently reported that sales at its North American stores improved slightly. The boost in sales was expected to do the same to the bottom-line. The company said EPS to be ahead of the estimates by about 2 cents. The stock is another superstar of 2001, with its 125 percent gain year-to-date.

Shares of Office Depot recently paused at the $16 retracement level -- the retracement of its big sell-off through much of 1999. Next stop, $18.50.

Speaking of stops, hopefully the jolly guy drops by this year. I haven't been the best behaved. I'm trying to make it up in the last few weeks. If I'm lucky, a new fly rod will make its way under my tree.

Eric Utley
Option Investor

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