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New Plays

New Option Plays

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PLAYS TABLE-->
Call Options Plays
Put Options Plays
Strangle Options Plays
GS None None
LEH    
MER    
SNDK    

New Calls

Goldman Sachs - GS - close: 208.11 chg: +4.03 stop: 199.75

Company Description:
Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. (source: company press release or website)

Why We Like It:
The XBD broker-dealer index is breaking out to new all-time highs (again). Leading the way are the big names in the group. We're adding multiple call candidates in this sector but suggest you only pick one or two that you like the best to play. GS has spent the last few weeks consolidating sideways but today's rally confirms the recent breakout over its short-term trendline of lower highs and short-term resistance at $205. Volume has been strong on the rally too, which tends to be bullish. The MACD on the daily chart just produced a new buy signal for GS. We're suggesting call positions with GS above $205. Our target is the $214.00-215.00 range. We do not want to hold over the early March earnings report. Other candidates we're adding are LEH and MER. BSC might be a decent candidate on a dip back toward $166-165.

Suggested Options:
We would prefer to play March options but only have February or April available (January's expire too soon for us). We're suggesting the February calls.

BUY CALL FEB 200 GPY-BT open interest=6374 current ask $11.50
BUY CALL FEB 210 GPY-BB open interest=1637 current ask $ 5.50

Picked on January 10 at $208.11
Change since picked: + 0.00
Earnings Date 03/13/07 (unconfirmed)
Average Daily Volume = 4.7 million

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Lehman Brothers - LEH - cls: 79.55 change: +1.31 stop: 75.99

Company Description:
Lehman Brothers, an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in investment banking, equity and fixed income sales, trading and research, private investment management, asset management and private equity. The Firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. (source: company press release or website)

Why We Like It:
LEH is another candidate in the bullish broker-dealer sector. The stock rose 1.6% on above average volume on Wednesday. We are suggesting readers wait for a breakout over resistance at the $80.00 level. Our suggested entry point to buy calls is at $80.25. If triggered we will have two targets. Our conservative target is the $84.85-85.00 range. Our aggressive target is the $89.00-90.00 range. We do have a relatively wide stop loss for this play. LEH's Point & Figure chart shows a very bullish pattern called a bullish triangle breakout that points to a $111 target. We are also suggesting call plays on GS and MER. However, we suggest you pick the one or two stocks in the group you like instead of trying to play them all.

Suggested Options:
We would prefer to play March options but only have February or April available (January's expire too soon for us). We're suggesting the February calls. Our suggested trigger for LEH is $80.25.

BUY CALL FEB 75.00 LES-BO open interest= 264 current ask $5.80
BUY CALL FEB 80.00 LES-BP open interest=1682 current ask $2.35
BUY CALL FEB 85.00 LES-BQ open interest= 499 current ask $0.65

Picked on January xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 03/15/07 (unconfirmed)
Average Daily Volume = 3.4 million

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Merrill Lynch - MER - close: 94.44 change: +0.91 stop: 91.25

Company Description:
Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies with offices in 37 countries and territories and total client assets of approximately $1.5 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. (source: company press release or website)

Why We Like It:
MER is our third candidate in the bullish broker-dealer sector. Both the XBD index and shares of MER are breaking out to new all-time highs. Today's bullish breakout over resistance at the $94.00 level looks like a new entry point to buy calls in MER. Volume came in above average on the move. MER is a more aggressive play because we have a very limited time frame. The company is due to report earnings on January 18th before the opening bell. That gives us about one week. Aggressive traders can put their stop under support and the 50-dma near $90.00. We're going to place our stop at $91.25 and more conservative traders may want to put theirs closer to $92.00. Conservative types may also want to wait for a rally past $95 before opening positions. Our target is the $99.50-100.00 range. We do not want to hold over the January 18th earnings report.

Suggested Options:
We are suggesting the February calls but we plan to exit on or before January 17th.

BUY CALL FEB 90.00 MER-BR open interest=2041 current ask $5.80
BUY CALL FEB 95.00 MER-BS open interest=2157 current ask $2.40
BUY CALL FEB 100.0 MER-BT open interest=1139 current ask $0.65

Picked on January 10 at $ 94.44
Change since picked: + 0.00
Earnings Date 01/18/07 (confirmed)
Average Daily Volume = 4.6 million

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SanDisk - SNDK - close: 45.70 change: +1.59 stop: 42.45

Company Description:
SanDisk is the original inventor of flash storage cards and is the world's largest supplier of flash data storage card products, using its patented, high-density flash memory and controller technology. SanDisk is headquartered in Milpitas, California, and has operations worldwide, with more than half of its sales outside the U.S. (source: company press release or website)

Why We Like It:
Investors appear to be pulling money out of energy stocks and into tech stocks. Further fueling this trend is the excitement over AAPL's new products, which is producing something of a rising tide for the rest of the tech/hardware-related stocks. The recent rally in SNDK has been powered by rising volume. The stock just broke out over resistance near $45.00 and its descending 50-dma. We are suggesting call positions with SNDK above $45.00. Our target is the $49.00-50.00 range, where SNDK could encounter resistance with its 100-dma and 200-ema. We're placing our stop loss at $42.45 but more conservative traders might want to try their stop closer to $43.49. We do not want to hold over SNDK's January 30th earnings report, which gives us about three weeks.

Suggested Options:
We are suggesting the February calls but plan to exit ahead of the late January earnings report.

BUY CALL FEB 45.00 SWF-BI open interest=13097 current ask $3.90
BUY CALL FEB 47.50 SWF-BW open interest= 2865 current ask $2.70
BUY CALL FEB 50.00 SWF-BJ open interest= 4359 current ask $1.80

Picked on January 10 at $ 45.70
Change since picked: + 0.00
Earnings Date 01/30/07 (confirmed)
Average Daily Volume = 10.9 million
 

New Puts

None today.
 

New Strangles

None today.
 

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