New Plays, Tuesday, 11/27/2007
HAVING TROUBLE PRINTING?
Call Options Plays
Put Options Plays
Strangle Options Plays
Play Editor's Note: I haven't had a chance to read
tonight's market wrap yet but I'm going to throw in my two cents worth. It would
have been very tempting to buy the bounce today. However, the trend in the major
averages is still bearish. Plus, the markets have been up one day and down the
next for the last several days in a row. It's hard to draw any conclusions from
a one-day bounce. We are adding one new play and it's bearish.
Harley Davidson - HOG - cls: 46.48 change: +0.03 stop: 50.01
Harley-Davidson, Inc. is famous for its heavy-duty motorcycles and accessories.
Why We Like It:
A few days ago we listed HOG in one of our play editor's notes as a stock to
watch as a potential play. We're going to jump in today and list it as a bearish
candidate for puts. The stock's been in a bearish trend for months and the
recent trading has seen a bearish head-and-shoulders pattern and a breakdown to
new multi-year lows. The oversold bounce in just the last few sessions is
beginning to fade. Positive comments in this weekend's Barron's edition appear
to have been canceled
by news last night that HOG is shutting down some of its
production due to slowing sales. The declining housing market has shut off the
home-equity ATM machine and killed the "wealth effect" that Americans have been
feeling for years. Concerns over consumer credit and tightening lending
standards may continue to dampen sales. We're suggesting a stop loss at $50.01
but more conservative traders might try a stop near $49 or $48. The $48 level
looks like short-term resistance.
Our target is the $41.00-40.00 range. The P&F
chart is bearish with a $38 target.
We are suggesting the January puts.
BUY PUT JAN 47.50 HOG-MW open interest=2061 current ask $3.30
BUY PUT JAN 45.00 HOG-MI open interest=8872 current ask $2.15
BUY PUT JAN 40.00 HOG-MH open interest=4943 current ask $0.80
Picked on November 27 at $ 46.48
Change since picked: + 0.00
Earnings Date 01/17/08 (unconfirmed)
Average Daily Volume = 2.1 million