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New Plays

New Option Plays

HAVING TROUBLE PRINTING?
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Call Options Plays
Put Options Plays
Strangle Options Plays
None HOG None
  HZO  
  MTH  
  SEE  

Play Editor's note: We looked at hundreds of stocks this weekend and it was a struggle to find an attractive candidate for either bullish or bearish strategies. The market action lately suggests we could see more profit taking but the market is technically still in its bullish trend and has yet to break any significant levels of support. We are going to add a few bearish candidates to the newsletter but readers may want to wait for more follow through lower in the major market averages before considering new positions!


New Calls

None today.
 

New Puts

Harley Davidson - HOG - cls: 67.80 chg: -1.56 stop: 70.11

Company Description:
Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company, Buell Motorcycle Company and Harley-Davidson Financial Services. Harley-Davidson Motor Company, the only major U.S.-based motorcycle manufacturer, produces heavyweight motorcycles and offers a complete line of motorcycle parts, accessories, apparel, and general merchandise. Buell Motorcycle Company produces sport and sport-touring motorcycles. (source: company press release or website)

Why We Like It:
HOG looks like a bearish candidate based on its technical breakdowns and technical bearish signals. However, it is important to note that the stock will continue to react to news with the ongoing strike at HOG's biggest plant. Currently the strike has stretched into its sixth day and most believe the strike will end relatively soon. When news hits that the strike has ended the stock could bounce but right now shares look poised to move lower. The company has already warned that output will be lower than forecasted due to the strike. The late January breakdown under $70.00 was also a breakdown under its bullish trend of higher lows. The early February oversold bounce failed multiple times to breakout past the $70.00-70.20 level and Friday's performance looks like a new failed rally and entry point to buy puts. We are aiming for the $63.00-62.00 range but more conservative traders may want to exit early near $65.00.

Suggested Options:
We are suggesting the March puts.

BUY PUT MAR 70.00 HOG-ON open interest=7347 current ask $3.30
BUY PUT MAR 65.00 HOG-OM open interest=2118 current ask $0.95

Picked on February 11 at $ 67.80
Change since picked: + 0.00
Earnings Date 04/19/07 (unconfirmed)
Average Daily Volume = 2.3 million

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MarineMax - HZO - close: 22.59 change: -1.49 stop: 24.25

Company Description:
Headquartered in Clearwater, Florida, MarineMax is the nation's largest recreational boat and yacht retailer. (source: company press release or website)

Why We Like It:
HZO issued an earnings warning back on January 8th and the stock crashed with a big gap down and dip toward $20.00. It's taken five weeks for HZO to bounce back and now the bounce is failing under the $24.50 level. Shares have produced a failed rally at least three times under this level. Friday's performance
(-6.19%) looks like a new sell signal to buy puts. We're suggesting puts with HZO under $24.00. Our target is the $20.25-20.00 range.

Suggested Options:
We are suggesting the March puts although April puts would also work well.

BUY PUT MAR 25.00 HZO-OE open interest= 2 current ask $2.70
BUY PUT MAR 22.50 HZO-OX open interest= 0 current ask $1.05
BUY PUT MAR 20.00 HZO-OD open interest= 0 current ask $0.25

Picked on February 11 at $ 22.59
Change since picked: + 0.00
Earnings Date 04/26/07 (unconfirmed)
Average Daily Volume = 300 thousand

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Meritage - MTH - close: 41.99 change: -1.75 stop: 45.26

Company Description:
Meritage Homes Corporation is a leader in the homebuilding industry. The Company is ranked by Builder magazine as the 13th largest homebuilder in the U.S. (source: company press release or website)

Why We Like It:
It would appear that investors have completely forgotten the generally positive statements from the Federal Reserve about signs that the housing market appeared to be stabilizing. Instead new concerns over rising rates and new doubts about a bottom in housing has produced a painful week for the sector. Shares of MTH have produced three significant failed rallies under its descending 200-dma in the last few weeks. Friday's high-volume decline produced a breakdown under support at the $42.50 level. We are suggesting puts with MTH under $42.50. Traders should expect some sort of bounce near $40.00 but we suspect it would be temporary. The P&F chart has produced a triple-breakdown sell signal with a $37.00 target. We're going to aim for the $37.50-37.00 range.

Suggested Options:
We are suggesting the March puts.

BUY PUT MAR 45.00 MTH-OI open interest=906 current ask $3.80
BUY PUT MAR 40.00 MTH-OH open interest=709 current ask $1.15

Picked on February 11 at $ 41.99
Change since picked: + 0.00
Earnings Date 04/25/07 (unconfirmed)
Average Daily Volume = 473 thousand

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Sealed Air - SEE - close: 64.08 chg: -0.66 stop: 65.26

Company Description:
Sealed Air is a leading global manufacturer of a wide range of food and protective packaging materials and systems including such widely recognized brands as Bubble Wrap cushioning, Jiffy protective mailers and Cryovac food packaging products. (source: company press release or website)

Why We Like It:
After a significant run from its July lows the bullish trend in SEE is now in jeopardy. Technical indicators on both the daily and weekly chart are turning or have turned bearish. If the major market averages continue to consolidate lower then we'd expect SEE to breakdown under its 50-dma and dip toward the $60.00 region. Coincidentally the 38.2% Fibonacci retracement would be near the November lows around $58.50. We are suggesting a trigger to buy puts at $63.75, under the 50-dma. If triggered our target is the $60.15-60.00. In the news on Friday SEE has sold its stake in PolyMask to partner 3M.

Suggested Options:
We are suggesting the March puts although April puts would also work well. Our suggested trigger to buy puts is at $63.75.

BUY PUT MAR 65.00 SEE-OM open interest=240 current ask $2.00
BUY PUT MAR 60.00 SEE-OL open interest= 60 current ask $0.35

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 05/02/07 (unconfirmed)
Average Daily Volume = 281 thousand
 

New Strangles

None today.
 

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