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New Option Plays

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Call Options Plays
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Strangle Options Plays
MS None None
TNB    
WHR    

New Calls

Morgan Stanley - MS - close: 76.68 chg: +1.83 stop: 74.49

Company Description:
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services. The firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 30 countries. (source: company press release or website)

Why We Like It:
Currently LEH is on the play list as a put candidate. We're going to hedge our bets and add MS as a bullish call candidate. The run up in the broker-dealers from their late summer lows was very impressive but late October and early November saw several stocks in the group breakdown. MS was trending lower after its peak in late October until traders bought the dip at its 38.2% Fibonacci retracement level (see chart). Friday's rally (+2.4%) is a bullish breakout over the three-week trendline of lower highs. It also follows a higher low for the stock. We're suggesting calls with MS above $76.00. Our short-term target is the $79.90-80.00 range. More aggressive traders may want to aim higher since the P&F chart points to an $83 target.

Suggested Options:
We are suggesting the December calls since we plan to exit ahead of the December earnings report.

BUY CALL DEC 75.00 MS-LO open interest=1436 current ask $3.30
BUY CALL DEC 80.00 MS-LP open interest=2675 current ask $0.80

Picked on November 12 at $ 76.68
Change since picked: + 0.00
Earnings Date 12/20/06 (unconfirmed)
Average Daily Volume = 4.1 million

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Thomas & Betts - TNB - close: 51.36 chg: +0.58 stop: 49.90

Company Description:
Thomas & Betts Corporation (www.tnb.com) is a leading designer and manufacturer of electrical components used in industrial, construction, and utility markets. (source: company press release or website)

Why We Like It:
The consolidation in TNB appears to be ending. Technical indicators are turning positive as TNB prepares to breakout from a bull flag-shaped pattern. Friday's intraday bounce from the $50 level and its 200-dma looks like a new entry point to buy calls. We do see some resistance at the $54.00 level but we are aiming for the $56.00-57.00 range. Currently the P&F chart points to a $77 target. More conservative traders may want to wait for a move over $51.50 or $52.00 before initiating positions.

Suggested Options:
We are suggesting the December calls.

BUY CALL DEC 50.00 TNB-LJ open interest=250 current ask $2.85
BUY CALL DEC 55.00 TNB-LK open interest=199 current ask $0.70

Picked on November 12 at $ 51.36
Change since picked: + 0.00
Earnings Date 01/23/07 (unconfirmed)
Average Daily Volume = 471 thousand

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Whirlpool - WHR - close: 89.55 change: +1.05 stop: 86.99

Company Description:
Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales of more than $19 billion, more than 80,000 employees, and more than 60 manufacturing and technology research centers around the world. (source: company press release or website)

Why We Like It:
The sideways consolidation in WHR may be coming to an end. The stock has rallied from its early November lows and is now challenging resistance at the $90.00 level. Daily technical indicators have turned positive and the P&F chart points to a $94 target. We want to catch a breakout over resistance at $90.00 so we're suggesting a trigger to buy calls at $90.15. If triggered our target is the $94.75-95.00 range.

Suggested Options:
We are suggesting the December or January calls.

BUY CALL DEC 85.00 WHR-LQ open interest= 728 current ask $5.80
BUY CALL DEC 90.00 WHR-LR open interest=2272 current ask $2.50
BUY CALL DEC 95.00 WHR-LS open interest= 868 current ask $0.75

BUY CALL JAN 90.00 WHR-AR open interest=3508 current ask $3.90

Picked on November xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/23/06 (unconfirmed)
Average Daily Volume = 1.0 million
 

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New Strangles

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