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  SPG

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New Puts

Ingersoll Rand - IR - close: 78.42 chg: -0.44 stop: 80.61

Company Description:
Ingersoll-Rand is a global provider of products, services, and integrated solutions to industries as diverse as transportation, manufacturing, construction, and agriculture. The company brings to bear a 100-year-old heritage of technological innovation to help companies be more productive, efficient, and innovative. Examples include cryogenic refrigeration that preserves agricultural produce worldwide, biometric security systems for airports, corporations, and government facilities, the efficient harnessing of air to drive tools and factories, and versatile, compact vehicles for construction and efficient movement of people and goods. In every line of business, Ingersoll-Rand enables companies and their customers to make progress possible. (source: company press release or website)

Why We Like It:
It looks like the six-week bounce in shares of IR have finally run out of steam. Short-term oscillators like the RSI and stochastics are bearish plus the MACD has produced a new sell signal from overbought levels. We also see similar bearish hooks in the weekly oscillators. However, while the technical picture may have turned bearish we want to see a little more confirmation. That's why we're suggesting a trigger at $77.49, under its simple 200-dma. Our short-term target will be the $72.60-72.40 range but we do expect a bounce at the $75 mark. Please note that IR is due to split 2-for-1 on September 2nd. We do not want to hold over the split. Lately stocks have not seen much post-split depression. That only gives us about two weeks for IR to open and move toward our target.

Suggested Options:
We are suggesting the September puts since we do not plan on holding over the early September stock split.

BUY PUT SEP 80.00 IR-UP OI=685 current ask $2.90
BUY PUT SEP 75.00 IR-UO OI=593 current ask $0.75

Picked on August xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 07/21/05 (confirmed)
Average Daily Volume = 1.1 million

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Simon Prpty Grp - SPG - close: 75.24 chg: -0.36 stop: 77.26

Company Description:
Simon Property Group, Inc., headquartered in Indianapolis, Indiana, is a real estate investment trust engaged in the ownership, development and management of retail real estate, primarily regional malls, Premium Outlet centers and community/lifestyle centers. The Company's current total market capitalization is approximately $41 billion. Through its subsidiary partnership, it currently owns or has an interest in 295 properties in the United States containing an aggregate of 201 million square feet of gross leasable area in 40 states plus Puerto Rico. Simon also owns interests in 51 European shopping centers in France, Italy, Poland and Portugal; 5 Premium Outlet centers in Japan; one Premium Outlet center in Mexico; and one shopping center in Canada. (source: company press release or website)

Why We Like It:
REIT stocks have been big winners for the bulls over spring and summer but now it looks like the group is seeing some profit taking. Investor concerns over rising inflation and bond yields is putting pressure on the REIT industry. While SPG still has a strong 3.9% dividend yield rising interest rates make REITs less attractive. Plus, there was a recent article in Barron's suggesting there could be a speculative bubble in the group. We like SPG because the stock has clearly broken its four-month up trend and the oversold bounce from the initial sell-off has already begun to fail. We're suggesting that traders buy puts here with a target at the $70.75-70.00 range near its 100-dma. More conservative traders might want to wait for SPG to decline under the $75.00 level again, which has been acting as minor support for the last couple of sessions.

Suggested Options:
We are suggesting the October puts.

BUY PUT OCT 80.00 SPG-VP OI= 81 current ask $5.50
BUY PUT OCT 75.00 SPG-VO OI=364 current ask $2.45
BUY PUT OCT 70.00 SPG-VN OI=707 current ask $0.95

Picked on August 18 at $ 75.24
Change since picked: - 0.00
Earnings Date 07/28/05 (confirmed)
Average Daily Volume = 946 thousand
 

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