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JOE None
SLM

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St Joe Co - JOE - close: 82.56 change: +2.21 stop: 79.45

Company Description:
The St. Joe Company, a publicly held company based in Jacksonville, is one of Florida's largest real estate operating companies. It is engaged in town, resort, commercial and industrial development, land sales and commercial real estate services. JOE also has significant interests in timber. (source: company press release)

Why We Like It:
If you've been looking for a way to play the real estate boom in Florida then JOE may be the answer. A Barron's article was published over the weekend highlighting JOE's prime position to benefit from the housing rush in Florida. The company has a huge amount of land it can develop that has already appreciated considerably, which gives it a huge boost to its margins when it does develop it into housing. Of course the stock has already appreciated considerably along with the rest of the housing market. The stock had been consolidating sideways the last couple of weeks as bulls and bears fought over the $80.00 level. The Barron's highlight helped push JOE to a new all-time high while the rest of its peers turned lower in profit taking on Monday. Pure and simple this is a momentum play. We would much prefer to buy a dip somewhere near the 50-dma or 100-dma but that may not occur for quite some time. We are willing to buy calls at current levels but more patient traders might want to wait for a dip. The DJUSHB home construction index looks poised for some more profit taking before it continues higher. A decline in the DJUSHB could weight on JOE and pull it back toward the $80.00 level again, which we could use as a new entry point. We're going to try and limit our exposure by using a relatively tight stop loss at $79.45. We do not plan on holding over JOE's July earnings report. Our target is the $87-90 range. 

Suggested Options:
August strikes recently became available but there is no volume or open interest yet so we'll suggest the September strikes even though we plan to close the play in mid July.

BUY CALL SEP 75.00 JOE-IO OI= 928 current ask $9.70
BUY CALL SEP 80.00 JOE-IP OI=1009 current ask $6.10
BUY CALL SEP 85.00 JOE-IQ OI= 409 current ask $3.40

Picked on June 20 at $ 82.56
Change since picked: + 0.00
Earnings Date 07/20/05 (unconfirmed)
Average Daily Volume = 507 thousand 

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SLM Corp - SLM - close: 50.92 change: +1.14 stop: 48.95

Company Description:
SLM Corporation is the nation's No. 1 paying-for-college company, managing nearly $112 billion in student loans for 8 million borrowers. Sallie Mae was originally created in 1972 as a government-sponsored entity (GSE). In 2004, the company terminated its GSE charter, ending its ties to the federal government. Sallie Mae remains the country's largest originator of federally insured student loans. Through its specialized subsidiaries and divisions, the company also provides debt management services as well as business and technical products to a range of business clients, including colleges, universities and loan guarantors. (source: company press release)

Why We Like It:
We're adding SLM to the list as a bullish candidate following today's technical breakout. The stock had been consolidating sideways under resistance at the $50.00 level for weeks. The stock got a pop higher on Friday with strong volume, but we suspect that was due to option expiration. The rally continued today and when SLM finally pushed past the $50.00 mark it really took off with another flood of volume. This looks like a bullish entry point for a run toward its January highs near $55.00. Readers can choose to go long here or hope for a dip back toward the $50.00 level, which should now act as support. We will target a move into the $54.50-55.00 range before its mid July earnings report. 

Suggested Options:
We are going to suggest the new August strikes even though they have very little open interest yet. 

BUY CALL AUG 45.00 SLM-HI OI= 0 current ask $6.50
BUY CALL AUG 50.00 SLM-HJ OI= 0 current ask $2.45
BUY CALL AUG 55.00 SLM-HK OI= 0 current ask $0.45

Picked on June 20 at $ 50.92
Change since picked: + 0.00
Earnings Date 07/14/05 (unconfirmed)
Average Daily Volume = 1.8 million 

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