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New Plays

New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
AVB None None
DIA    
ESS    
OEX    
REG    

Play Editor's Note: The market's lack of follow through on Friday's bounce looks bearish but the overall trend is still up. We want to speculate on a pull back with some puts on the major indices. However, we're going to label these more aggressive, speculative plays (on the DIA, OEX and SPX). This will either be a great entry point or we'll be stopped out quickly as the rally continues. You'll also notice that we're adding more than one put play in the REIT sector. The whole group appears to be breaking down again. We suggest you pick one you like instead of trying to play them all.


New Calls

AvalonBay - AVB - cls: 122.84 chg: -1.66 stop: 125.55

Company Description:
AvalonBay, an S&P 500 company, is in the business of developing, redeveloping, acquiring, and managing apartment communities in high barrier- to-entry markets of the United States. As of December 31, 2006, the company owned or held an ownership interest in 167 apartment communities containing 48,294 apartment homes in ten states and the District of Columbia, of which 17 communities are under construction and six communities are under reconstruction. (source: company press release or website)

Why We Like It:
We are seeing sector-wide weakness in the RETIs and the oversold bounce in AVB appears to be failing. The stock produced a bearish failed rally near $125 and its 50-dma today. Volume was a bit light so it's hard to put too much confidence behind the move. Therefore traders may want to consider this a more aggressive play. You'll also notice that we are adding more than one put play in the REIT sector. We suggest you just pick one instead of trying to play them all. We will try and limit our risk with a relatively tight stop loss at $125.55. More aggressive traders may want to use a wider stop. Our target is the $115.50-115.00 range. FYI: Another REIT stock that looks like a potential put candidate is SPG.

Suggested Options:
We are suggesting the July puts.

BUY PUT JUL 125 AVB-SE open interest=165 current ask $6.10
BUY PUT JUL 120 AVB-SD open interest=221 current ask $3.70
BUY PUT JUL 115 AVB-SC open interest= 92 current ask $1.90

Picked on June 11 at $122.84
Change since picked: + 0.00
Earnings Date 07/26/07 (unconfirmed)
Average Daily Volume = 903 thousand

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Diamonds - DIA - close: 134.24 chg: +0.14 stop: 135.26

Company Description:
The DIAMONDS Trust, Series 1, is an Exchange Traded Fund or ETF that seeks to mimic the performance of the Dow Jones Industrial Average.

Why We Like It:
The bounce in the DJIA looks like it's struggling. More than that the rebound looks injured and bears might see this as easy prey and swoop in for a kill. We do consider this a more aggressive play because the bears have been getting beat up for more than two months. However, we'll try and limit our risk with a relatively tight stop loss. We're suggesting puts on the DIA with the DIA under $135 (or the Dow Industrials under 13,500). Our target is the $130.50-130.00 range. There is potential support at the rising 50-dma currently near $131.40.

Suggested Options:
The options on the DIA are traded in $1 strike prices. If you don't like our suggested strikes feel free to pick your own. We are suggesting the July strikes.

BUY PUT JUL 135 DAW-SE open interest=10758 current ask $2.45
BUY PUT JUL 134 DAW-SD open interest= 7232 current ask $2.05
BUY PUT JUL 133 DAW-SC open interest= 8368 current ask $1.70
BUY PUT JUL 132 DAW-SB open interest= 6191 current ask $1.45
BUY PUT JUL 131 DAW-SA open interest= 4705 current ask $1.20
BUY PUT JUL 130 DAW-SZ open interest=47355 current ask $1.00

Picked on June 11 at $134.24
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 10.8 million

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ESSEX Property - ESS - cls: 119.47 chg: -0.95 stop: 122.51

Company Description:
Essex Property Trust, Inc., located in Palo Alto, California and traded on the New York Stock Exchange (ESS), is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast communities. (source: company press release or website)

Why We Like It:
ESS is another bearish candidate in the deteriorating REIT sector. The bounce in ESS is already rolling over. We're suggesting puts with the stock under $120.00. Our target is the $111.00-110.00 range. We'll try and limit our risk with a tight stop loss. More conservative traders could use an even tighter stop loss near today's or last Thursday's high. The P&F chart looks very bearish with a $100 target. FYI: More aggressive traders may want to use a wider stop loss. Plus, we want to note that another REIT stock that looks like a potential put candidate is SPG.

Suggested Options:
We are suggesting the July puts.

BUY PUT JUL 125 ESS-SE open interest=96 current ask $8.10
BUY PUT JUL 120 ESS-SD open interest=57 current ask $5.00
BUY PUT JUL 115 ESS-SC open interest= 2 current ask $2.65

Picked on June 11 at $119.47
Change since picked: + 0.00
Earnings Date 08/02/07 (unconfirmed)
Average Daily Volume = 344 thousand

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S&P 100 Index - OEX - cls: 693.73 chg: +0.62 stop: 700.25

Company Description:
This is the Standard & Poor's 100 index.

Why We Like It:
If the market is rolling over then a great way to play it is the OEX options. We are suggesting puts with the OEX under $700. We'll set two targets. Our first target is $685 just above the rising 50-dma. Our second target is the $681-680 range. Really aggressive traders may want to hang on and aim for a decline toward $675. Trading the OEX is not for everyone so we consider this a higher-risk, more aggressive play.

FYI: You could also play puts on the S&P 500 (SPX) and aim for the 1490 level or the 50-dma. We aren't listing it as a play since the options are so expensive.

Suggested Options:
We are suggesting the July puts.

BUY PUT JUL 695 OEY-SS open interest=1603 current ask $11.50
BUY PUT JUL 690 OEY-SR open interest=1930 current ask $ 9.60
BUY PUT JUL 685 OEY-SQ open interest=1909 current ask $ 8.10

Picked on June 11 at $693.733
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 1270

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Regency Centers - REG - cls: 74.68 chg: -1.70 stop: 77.76

Company Description::
Regency is the leading national owner, operator, and developer of grocery-anchored and community shopping centers. At March 31, 2007, the Company owned 409 retail properties, including those held in joint ventures. (source: company press release or website)

Why We Like It:
REG is another bearish candidate in the REIT sector. The stock has broken down under its 200-dma recently and today's decline pulled shares under round-number support at $75.00. Volume has been rising on the declines, which is bearish. There is some support near $72.50 but our target is the $70.50-70.00 range. We are listing more than one put candidate in the REIT sector. We suggest you pick one you like instead of trying to trade them all. FYI: Another REIT stock that looks like a potential put candidate is SPG.

Suggested Options:
We are suggesting the July puts.

BUY PUT JUL 80 REG-SP open interest= 12 current ask $5.90
BUY PUT JUL 75 REG-SO open interest= 62 current ask $2.65
BUY PUT JUL 70 REG-SN open interest= 25 current ask $1.05

Picked on June 11 at $ 74.68
Change since picked: + 0.00
Earnings Date 08/01/07 (unconfirmed)
Average Daily Volume = 374 thousand
 

New Puts

None today.
 

New Strangles

None today.
 

New Play Archives