XMSR and SIRI have captured the hearts and minds of the investing listener with 100 channels of clear programming. The Ipod and its clones have captured the younger generation and conventional radio is dying. I read an article last week that said CCU, despite its size and diversity, was only growing at a +3% rate and that was in danger. The U.S. has clearly embraced the satellite radio craze and with almost all new cars offering satellite radio as an option it is only a matter of time before Clear Channel begins to shrink rather than grow.
The stock has traded in a range since last September from $30-$35. It appears that range is about to break. While I would like to see one more bounce to something in the $32.50 range I think a breakdown is imminent. I added it to the watch list this week.
I can't afford to add a bunch of new targets given the volatility of the market and the calendar period ahead. We have a good mix of calls/puts and until we take profits on some I am going to refrain from any new targets.
I personally think CME is about to crater big time given the various exchange combinations and new offerings being discussed. I would target something in the $120-150 range but the LEAPS are far too expensive. If you have a big budget you might try some in the money puts rather than leaps.
ADSK is taking off again. We exited that play as a non performer back at $30 and it is pressing $36. I still like the company and I believe the rally will continue but summer is not kind to tech stocks. Try to enter on a pullback.
TIVO is ripe for a takeover. It can't seem to get over $6.50 but is holding over $5. Market share is growing but so is competition. I have heard numbers mentioned in the $10 to $12 range given their brand. You could probably buy some November $5 calls for a buck. Consider it a lottery play.
EBAY is starting to show some life after putting in a bottom at $31. Unfortunately it is considered a tech stock and I think we stand a good chance of another dip. I am going to add it with a breakdown target only and not expect to be triggered until summer.
If you see any obvious LEAP plays that could work through the summer please
email them to Jim at Option Investor and I will post them for everyone to see.
Current Watch List
CCU - $29.93 Clear Channel Communications
Breakdown Target $28.00 **
Radio is changing with the advent of satellite and conventional AM/FM is fighting an uphill battle.
No insurance call - Stop at $35.00
EBAY - $35.05 EBAY Inc
Breakdown Target $32.00 **
EBAY has finally started finding a bid and $31 appears to be a bottom. If we get another dip over the summer I would be happy with an entry at $32. It appears investors have forgotten that Meg Wittman considered leaving to go to Disney.
Insurance put - OCT $30 PUT XBA-VF currently $1.40