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New Plays

New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
JCP None None
NKE    

Play Editor's note: We are cautiously adding new bullish positions to the newsletter. Our opinion of the market has not changed from this weekend and we remain defensive.


New Calls

Play Editor's note: We are cautiously adding new bullish positions to the newsletter. Our opinion of the market has not changed from this weekend and we remain defensive.

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J.C.Penney - JCP - close: 84.70 chg: +1.29 stop: 81.99

Company Description:
J. C. Penney Corporation, Inc., the wholly owned operating subsidiary of J. C. Penney Company, Inc., is one of America's largest department store, catalog, and e-commerce retailers, employing approximately 151,000 associates. (source: company press release or website)

Why We Like It:
Retail stocks have continued to rally in spite of rising oil prices. The RLX retail index just closed at another new all-time high. Some of the retailers have been rising on positive expectations for strong January same-store sales figures. JCP has helped lead the charge and is also trading near all-time highs. If you study the chart you'll see the big rally in January fueled by some upgrades. The recent rally on February 1st was supposedly driven by news that JCP had signed a deal with Polo Ralph Lauren to market a new brand of clothing. Overall the trend is bullish given the breakout over its November and December highs. The P&F chart points to a $108 target. We are suggesting a trigger to buy calls at $85.51, which would be above the intraday high. If triggered our target is the $89.50-90.00 range. We do not want to hold over the February 22nd earnings.

Suggested Options:
We are suggesting the March calls. Our trigger is at $85.51. Double-check the March $90 call symbol with your broker. It should be -CR but the CBOE has it listed as -CB.

BUY CALL MAR 85.00 JCP-CQ open interest=1130 current ask $2.95
BUY CALL MAR 90.00 JCP-CB open interest= 552 current ask $1.05

Picked on February 06 at $ 84.70
Change since picked: + 0.00
Earnings Date 02/22/07 (confirmed)
Average Daily Volume = 2.3 million

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Nike - NKE - close: 101.17 change: +1.75 stop: 97.99

Company Description:
NIKE, Inc. based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. (source: company press release or website)

Why We Like It:
NKE produced a big run from its August lows but when the stock broke down in late January it didn't fall very far. Traders bought the dip near $95.00 and the rebound makes the previous breakdown look like a bear trap. Traders bought the dip (this week) again and now shares are trading near all-time highs. Fueling the strength in NKE has been some positive comments from management. NKE believes they will see +50% sales growth and hit sales of $23 billion in five years. We see the rebound back above $101 as a new entry point to buy calls. More aggressive traders may want to wait for a trade past $101.51 before initiating new positions just to make sure NKE can breakout past last week's high. Our target is the $107.50-110.00 range.

Suggested Options:
We are suggesting the March calls.

BUY CALL MAR 100 NKE-CT open interest=618 current ask $3.30
BUY CALL MAR 105 NKE-CA open interest=400 current ask $1.00

Picked on February 06 at $101.17
Change since picked: + 0.00
Earnings Date 03/21/07 (unconfirmed)
Average Daily Volume = 1.4 million
 

New Puts

None today.
 

New Strangles

None today.
 

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