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Lennar Corp. - LEN - close: 62.91 chg: +0.83 stop: 59.99

Company Description:
Lennar Corporation, founded in 1954, is headquartered in Miami, Florida and is one of the nation's leading builders of quality homes for all generations, building affordable, move-up and retirement homes. The Company operates primarily under the Lennar and U.S. Home brand names and utilizes a Dual Marketing strategy consisting of the Everything's Included and Design Studio(SM) programs. Lennar's Financial Services Division provides mortgage financing, title insurance, closing services and insurance agency services for both buyers of the Company's homes and others. Its Strategic Technologies Division provides high-speed Internet and cable television services to residents of the Company's communities and others. (source: company press release or website)

Why We Like It:
We had planned on not adding any new plays to the newsletter ahead of tomorrow's jobs report. Yet after looking at the DJUSHB home construction index and the sector's bullish trend the group looks poised to breakout over resistance soon. LEN has shown a similar consolidation pattern and the recent bounce from broken resistance now new support at $60 is bullish. The P&F chart for LEN is very bullish. The stock has produced a bullish triangle breakout pattern with a $75 target. Now that the market believes the interest rate hike cycle is nearing an end the homebuilders could make another big rally attempt. We are going to suggest a trigger to buy calls at $64.01. If triggered we'll target a rally into the $69.50-70.00 range by February option expiration.

Suggested Options:
We are suggesting the February calls because March strikes aren't available and we don't want to pay for Mays.

BUY CALL FEB 60 LEN-BL open interest=2542 current ask $4.90
BUY CALL FEB 65 LEN-BM open interest=6691 current ask $2.00
BUY CALL FEB 70 LEN-BN open interest=1350 current ask $0.60

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/16/06 (unconfirmed)
Average Daily Volume = 2.6 million
 

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