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New Option Plays

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Call Options Plays
Put Options Plays
None BMHC
  FD
  WYNN

New Calls

None today.
 

New Puts

Building Materials - BMHC - cls: 71.33 chg: -1.38 stop: 75.01

Company Description:
BMHC, a Fortune 1000 company, is one of the largest providers of residential construction services and building materials in the United States. We serve the homebuilding industry through two subsidiaries: BMC West distributes building materials and manufactures building components for professional builders and contractors in the western and southern states; BMC Construction provides construction services to high-volume production homebuilders in key growth markets across the country. (source: company press release or website)

Why We Like It:
Concerns over a housing bubble bursting sparked by concerns over rising interest rates coupled with general worries over the economy and rising fuel costs appear to be deflating the housing sector. Shares of BMHC, a services and material supplier to the industry, is seeing some profit taking along with the homebuilders. Looking at the chart we see that the oversold bounce from its July 5th decline has stalled at its 50-dma under the $75.00 level. Technical indicators are bearish and suggest more weakness ahead. We are going to suggest buying puts here but more conservative traders might want to wait for a decline under the $70 level again. Our moving target is the 100-dma currently at $63.70 (our target range is 64.00-63.50). We'll adjust the target each day.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 75.00 BGU-UO OI= 236 current ask $6.60
BUY PUT SEP 70.00 BGU-UN OI= 302 current ask $3.90
BUY PUT SEP 65.00 BGU-UM OI= 336 current ask $2.00

Picked on August 16 at $ 71.33
Change since picked: - 0.00
Earnings Date 07/26/05 (confirmed)
Average Daily Volume = 289 thousand

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Federated Dept. Stores - FD - cls: 72.56 chg: -2.29 stop: 75.75

Company Description:
Federated, with corporate offices in Cincinnati and New York, is one of the nation's leading department store retailers, with annual sales of more than $15.6 billion. Federated operates more than 450 stores in 34 states, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates macys.com and Bloomingdale's By Mail. (source: company press release or website)

Why We Like It:
The largest retailer on the planet dropped a bomb on the markets today by guiding lower for the third quarter. WMT is stating that rising fuel costs are hurting their customers and that sent the market into a tailspin as Wall Street worried about a slow down in consumer spending. We think this may be the catalyst to send shares of FD lower. The stock has been very strong over the last several months and due for another consolidation lower, at least before retailers try and rally again into the fourth quarter. We are going to suggest a trigger at $71.99 to open the play. It looks like a decline under the $72.00 level will produce a new sell signal on its P&F chart. If triggered we'll target a decline into the $67.00-65.00 range. Looking at the chart you can see that $67.00 acted as support back in late May early June and the 200-dma will probably hit $65.00 in a few days lending that level technical support. Keep an eye on the RLX retail index and traders may want to consider trading puts on the RTH retail holders, which have also broken their up trend and look poised to move lower.

Suggested Options:
We are going to suggest the September puts.

BUY PUT SEP 75.00 FD-UO OI= 700 current ask $3.70
BUY PUT SEP 70.00 FD-UN OI=1286 current ask $1.35

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/10/05 (confirmed)
Average Daily Volume = 2.2 million

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Wynn Resorts - WYNN - close: 50.92 chg: -1.44 stop: 54.01

Company Description:
Wynn Las Vegas, a luxury hotel and destination casino resort located on the Las Vegas Strip, opened to the public on April 28, 2005. Wynn Las Vegas features 2,716 luxurious guest rooms and suites; an approximately 111,000 square foot casino; 22 food and beverage outlets; an on-site 18-hole golf course; approximately 223,000 square feet of meeting space; an on-site Ferrari and Maserati dealership; and approximately 76,000 square feet of retail space. (source: company press release or website)

Why We Like It:
Investors sold the news in early August after WYNN reported its latest earnings numbers. Since then the stock has churned sideways under the $54 level and its exponential 200-dma. What made us notice it today was the decline under its three-month trendline of support. This also looks like a breakdown from a big wedge-like pattern, which suggests this is the beginning of its next leg down. We're choosing to use a trigger to open the play for a reason. The P&F chart, which is bearish and points to a $43 target shows WYNN testing P&F support. The first test can be painful the bears as bulls try and buy the dip. That's why we want to see confirmation of this breakdown. We're suggesting a trigger to buy puts at $49.95. Our short-term target will be the $45.25-45.00 range. We are starting the play with a wide stop but will adjust it once the play is opened.

Suggested Options:
We are suggesting the September puts.

BUY PUT SEP 55.00 UWY-UK OI=1797 current ask $4.80
BUY PUT SEP 50.00 UWY-UJ OI=2168 current ask $1.70
BUY PUT SEP 45.00 UWY-UI OI=3069 current ask $0.50

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 08/01/05 (confirmed)
Average Daily Volume = 2.0 million
 

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