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New Calls

None today.
 

New Puts

Sears Holding - SHLD - cls: 170.51 chg: -0.94 stop: 173.05

Company Description:
Sears Holdings Corporation is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,800 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance. (source: company press release or website)

Why We Like It:
The rally in the retail sector has reversed and the RLX retail index looks poised to break support at the 500 level and its rising 50-dma. SHLD is showing a similar short-term decline and bearish rollover in its weekly technicals. Aggressive traders might want to consider positions now after today's failed rally under SHLD's 50-dma or look for a drop under Tuesday's low near $169.28. We are suggesting a trigger to buy puts at $167.90, which is under support at the $168.00 level. If triggered at $167.90 our target is the $162.00-160.00 range. Keep an eye on the simple 100-dma near $162.40, which might offer some support.

Suggested Options:
We are suggesting the January puts although February puts would also work well. You, the individual trader, should determine which month and strike price best suits your trading style and risk.

BUY PUT JAN 175.00 KDU-MO open interest=6495 current ask $6.60
BUY PUT JAN 170.00 KDU-MN open interest=5092 current ask $3.80
BUY PUT JAN 165.00 KDU-MM open interest=6054 current ask $2.00

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/15/07 (unconfirmed)
Average Daily Volume = 1.9 million
 

New Strangles

None today.
 

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