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BZH None None
CHS    
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New Calls

Beazer Homes - BZH - close: 64.58 change: +0.94 stop: 62.29

Company Description:
Beazer Homes USA, Inc., headquartered in Atlanta, is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. (source: company press release or website)

Why We Like It:
Our bearish play in MTH has not panned out very well. Yet the homebuilding sector has been showing relative weakness for about a month now. We suspect that the group looks due for an oversold bounce. BZH could lead the bounce after today's test of support near the simple 200-dma. We are trying to call a short-term bottom here and that's a risky proposition. Consider this an aggressive, speculative play. BZH still has multiple levels of overhead resistance between here and our target in the $69.85-70.00 range. We are going to use a trigger at $65.05 to open the play.

Suggested Options:
If triggered we are going to suggest the March calls.

BUY CALL MAR 60 BZH-CL open interest= 183 current ask $6.20
BUY CALL MAR 65 BAD-CM open interest= 691 current ask $2.95
BUY CALL MAR 70 BAD-CN open interest=1072 current ask $1.15

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/19/06 (confirmed)
Average Daily Volume = 1.2 million

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Chico's FAS - CHS - close: 47.61 change: +2.76 stop: 44.49

Company Description:
The Company is a specialty retailer of private label, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 780 women's specialty stores, including stores in 47 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico operating under the Chico's, White House | Black Market, Soma by Chico's and Fitigues names. The Company owns 501 Chico's front-line stores, 31 Chico's outlet stores, 197 White House | Black Market front-line stores, 8 White House | Black Market outlet stores, 15 Soma by Chico's stores, 12 Fitigues front-line stores and 2 Fitigues outlet stores; franchisees own and operate 14 Chico's stores. (source: company press release or website)

Why We Like It:
Positive economic news helped send the retail stocks soaring higher today. This fueled a bullish breakout in shares of CHS. The stock rallied to a new high on very strong volume. We are going to suggest call positions here but our preferred entry point would be on a pull back toward the $46.00 level, which should act as short-term support. Our target is the $52.00-52.50 range. The P&F chart points to a $64 target. We do not want to hold over the early March earnings report.

Suggested Options:
We are suggesting the March calls.

BUY CALL MAR 45 CHS-CI open interest=1740 current ask $4.10
BUY CALL MAR 50 CHS-CJ open interest= 752 current ask $1.35

Picked on February 14 at $ 47.61
Change since picked: + 0.00
Earnings Date 03/01/06 (confirmed)
Average Daily Volume = 1.8 million

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Hartford Fin. Srv. - HIG - cls: 82.12 chg: +1.38 stop: 79.49

Company Description:
The Hartford, a Fortune 100 company, is one of the nation's largest financial services and insurance companies, with 2005 revenues of $27.1 billion. The Hartford is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. International operations are located in Japan, Brazil and the United Kingdom. (source: company press release or website)

Why We Like It:
The IUX insurance index is on the rebound and shares of HIG look poised to take advantage of it. HIG has a consistent pattern of bouncing from technical support at the 200-dma. Shares have spent the last week building support near $80.00 and its 200-dma so today's rally above the 10-dma looks like a new entry point for calls. The MACD is nearing a new buy signal and short-term oscillators are turning bullish. There is still resistance overhead so we'll need to be diligent on watching our stop loss. The biggest challenge will probably the $85 level. More conservative traders may want to exit near resistance at $85.00. We're going to target the $87.50-90.00 range.

Suggested Options:
We are suggesting the March calls.

BUY CALL MAR 80 HIG-CP open interest=1092 current ask $3.10
BUY CALL MAR 85 HIG-CQ open interest= 826 current ask $0.75

Picked on February 14 at $ 82.12
Change since picked: + 0.00
Earnings Date 01/26/06 (confirmed)
Average Daily Volume = 1.1 million
 

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