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New Option Plays

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Call Options Plays
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Strangle Options Plays
None SHLD None

New Calls

None today.

New Puts

Sears Holding - SHLD - close: 97.48 chg: -7.24 stop: 101.55

Company Description:
Sears Holdings Corporation, the publicly traded parent of Kmart and Sears, Roebuck and Co., is the nation's fourth largest broadline retailer with over $50 billion in annual revenues and approximately 3,800 full-line and specialty retail stores in the United States and Canada. (source: company press release or website)

Why We Like It:
Shares of Sears plunged 6.9% on Monday when it was revealed that Bank of America (BAC) has declined to renew SHLD's $1 billion line of credit. This vote of no confidence in SHLD should tell what the banks think of the consumer and retailers. SHLD tried to bounce but rolled over near round-number resistance at $100. Normally we do not like to chase a big move like today's loss but SHLD could easily see a multi-day decline without any bounces on this news. Our initial target is the $90.50-90.00 zone. More aggressive traders may want to aim for the $85 region. The P&F chart points to an $86 target. We would not want to hold over the late May earnings report.

Suggested Options:
We are suggesting the May puts.

BUY PUT MAY 100.0 KTQ-QT open interest=2978 current ask $6.90
BUY PUT MAY 95.00 KTQ-QS open interest=2864 current ask $4.20
BUY PUT MAY 90.00 KTQ-QR open interest=7927 current ask $2.50

Picked on April 21 at $ 97.48
Change since picked: + 0.00
Earnings Date 05/29/08 (unconfirmed)
Average Daily Volume = million


United States Oil - USO - close: 94.38 chg: +0.59 stop: 96.51

Company Description:
The United States Oil Fund is an exchanged traded fund (ETF) that seeks to mimic the price of West Texas Intermediate (WTI) light, sweet crude oil.

Why We Like It:
We have just closed a successful call play on the USO and now we're trying to capture a reversal. Normally trying to pick a top in a momentum stock like this can be extremely hazardous to your health. However, this time we're banking on futures expiration to spark some serious profit taking. Oil futures expire after Tuesday's closing bell. We do expect the USO to trade higher tomorrow. I repeat the USO will probably trade higher tomorrow. That's going to be out entry point. Our first target is the $88.50-88.00 zone.

Suggested Options:
We are suggesting the May or July puts. It's up to you to decide which month and which strike best suits your trading style and risk.

BUY PUT MAY 95.00 IYS-QQ open interest=682 current ask $4.50
BUY PUT MAY 90.00 UNA-QL open interest=2500 current ask $2.25

BUY PUT JUL 95.00 IYS-SQ open interest=2234 current ask $7.70
BUY PUT JUL 90.00 UNA-SL open interest= 816 current ask $5.10
BUY PUT JUL 88.00 UNA-SJ open interest= 425 current ask $4.30

Picked on April 21 at $ 94.38
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume = 5.9 million

New Strangles

None today.

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