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New Option Plays

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Call Options Plays
Put Options Plays
Strangle Options Plays
None ATI None
  ESS  
  VNO  

Play Editor's Note: Volume has been extremely light this week, which is to be expected during the holidays. Unfortunately, it makes our job as traders tougher. Monday is not going to be any different. It will be a full day of trading but it will probably be a lackluster day at best. We're not loading up on a lot of new plays since we should really wait to see how the market reacts on Wednesday, when most market participants should be back to work. Jim's market outlook is flat to down so we're adding put plays. FYI: Bonus play - Aggressive traders might want to consider a speculative strangle on VRSN. The stock has been almost pinned to the $38 level for days now. Consider buying a January $40 call and a January $35 put. You'd have three weeks to see a move.


New Calls

None today.
 

New Puts

Allegheny Tech. - ATI - cls: 87.68 change: +0.78 stop: 90.05

Company Description:
Allegheny Technologies Incorporated (ATI) is one of the largest and most diversified specialty metals producers in the world with revenues of $5.6 billion during the most recent four quarters ending September 30, 2007. (source: company press release or website)

Why We Like It:
The trend in ATI has definitely changed from 2005 and 2006. This year (2007) definitely saw ATI experience a lot of volatility. In the last few months ATI had been consolidating along support near $90.00. The stock broke that support in mid December. The oversold bounce stalled right where you would expect it to with new resistance at $90.00. We are very tempted to just buy puts right here at $87.68. However, we're going to suggest waiting for a little more confirmation with a trigger to open positions at $86.75. We'll place the stop right above support at $90.05. Our target is the $80.50-80.00 zone.

Suggested Options:
We are suggesting the January or February puts. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk. We do not want to hold over the late January earnings report. FYI: January strikes expire in three weeks.

BUY PUT JAN 90.00 ATI-MR open interest=4437 current ask $5.00
BUY PUT JAN 85.00 ATI-MQ open interest=2552 current ask $2.50
BUY PUT JAN 80.00 ATI-MP open interest=2550 current ask $1.20

BUY PUT FEB 85.00 ATI-NQ open interest= 90 current ask $4.70
BUY PUT FEB 80.00 ATI-NP open interest=147 current ask $2.90

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 01/24/08 (unconfirmed)
Average Daily Volume = 2.0 million

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Essex Property - ESS - close: 95.34 chg: -2.06 stop: 100.55

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. Essex currently has ownership interests in 138 multifamily properties (units), and has 28,364 units in various stages of development. (source: company press release or website)

Why We Like It:
Most of the REIT stocks are in decline. ESS recently broke down from its $98-108 trading range. The last couple of weeks have seen new resistance form at the $100 level. Friday saw the stock under perform and close at its lows for the year. The P&F chart is bearish with an $82 target. We're suggesting puts now with ESS under $100. We have two targets. Our first target is the $90.25-90.00 range. Our second target is the $85.50-85.00 zone. We do not want to hold over the early February earnings report.

Suggested Options:
We are suggesting the January or February puts. FYI: January strikes expire in three weeks. Plus, we don't see any January strikes under $95 at this time.

BUY PUT JAN 95.00 ESS-MS open interest= 3 current ask $3.60

BUY PUT FEB 95.00 ESS-NS open interest= 0 current ask $4.70
BUY PUT FEB 90.00 ESS-NR open interest= 0 current ask $2.85

Picked on December 30 at $ 95.34
Change since picked: + 0.00
Earnings Date 02/04/08 (unconfirmed)
Average Daily Volume = 315 thousand

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Vornado Realty Trust - VNO - cls: 86.30 chg: -0.75 stop: 90.05

Company Description:
Vornado Realty Trust is a fully integrated equity real estate investment trust. (source: company press release or website)

Why We Like It:
VNO is another REIT that is moving lower. The stock broke down from a bear-flag pattern in mid December. The recent oversold bounce ran into resistance near $90.00. This looks like a new entry point for puts. We're suggesting a stop just above $90.00. Our initial target is the $80.50-80.00 range. We are considering a second, more aggressive target near $75. Currently the P&F chart is bearish with a $73 target. We would not want to hold over the late February earnings report.

Suggested Options:
We are suggesting the January or February puts. FYI: January strikes expire in three weeks.

BUY PUT JAN 85.00 VNO-MQ open interest=105 current ask $2.90
BUY PUT JAN 80.00 VNO-MP open interest=121 current ask $1.45

BUY PUT FEB 85.00 VNO-NQ open interest= 0 current ask $4.80
BUY PUT FEB 80.00 VNO-NP open interest= 0 current ask $2.85

Picked on December 30 at $ 86.30 <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 02/27/08 (unconfirmed)
Average Daily Volume = 1.3 million
 

New Strangles

None today.
 

New Play Archives