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New Calls

None today.
 

New Puts

Deutsche Bank - DB - close: 81.97 change: -5.01 stop: 86.05

Company Description:
Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 80,253 employees in 75 countries, Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people. (source: company press release or website)

Why We Like It:
Investors mashed the sell button today as fears grew over a global slow down and another wave of complications from the worldwide credit crisis. Normally we would not want to chase a big move like the one in DB today but investor sentiment is souring quickly. We suspect there could be some serious follow through lower. We are suggesting put positions now. You may want to use an alternative entry point. A failed rally near $84 or $85 would work well. Or you could wait for a new decline under $81.00 or $80.00 to open positions. We would expect a bounce near the July 2008 lows in the $78.00-78.50 zone. However, we expect DB to hit new lows. We are setting two targets. Our first target is $76.00. Our second target is $71.50. The Point & Figure chart looks very bearish with a $66.00 target.

FYI: Another banking stock that readers might want to check out is HBC. A drop under $75.00 could lead to a move toward support around $70.00.

Suggested Options:
We are suggesting the October puts for DB. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY PUT OCT 85.00 DB-VQ open interest=3155 current ask $0.00
BUY PUT OCT 80.00 DB-VP open interest= 138 current ask $0.00
BUY PUT OCT 75.00 DB-VO open interest=6072 current ask $0.00

Picked on September 04 at $ 81.97
Change since picked: + 0.00
Earnings Date 10/30/08 (unconfirmed)
Average Daily Volume = 995 thousand

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Unibanco - UBB - close: 108.82 chg: -6.70 stop: 115.05

Company Description:
Uniao de Bancos Brasileiros S.A. (Unibanco) is one of the largest banks in Brasil.

Why We Like It:
Two or three weeks ago we had UBB on our newsletter as a bearish candidate but the stock never hit our trigger to buy puts under support around $112.50. It looks like we should have kept UBB on our list. The stock sold off sharply today breaking significant support and doing so on strong volume. The Brazilian stock market has already broken down through its long-term bullish trend and shares of UBB have been trading sideways in a massive range for months. We suspect that UBB could be launching into a new trend lower. Normally we would not want to chase such a big one-day move. You might want to consider an alternative entry point like a failed rally under $113.00. We're setting our initial stop loss just above today's high at $115.05. We have two targets. Our first target is $100.50. Our second target is $92.50. The Point & Figure chart has produced a brand new triple-bottom breakdown sell signal with a $92.00 target - a target that will probably move lower. The stock can be volatile so readers should consider this a higher-risk play.

Suggested Options:
We are suggesting the October puts. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk.

BUY PUT OCT 110.00 UBB-VB open interest=2079 current ask $7.90
BUY PUT OCT 100.00 UBB-VT open interest= 330 current ask $3.70
BUY PUT OCT 95.00 UBB-VS open interest= 124 current ask $2.40

Picked on September 04 at $108.82
Change since picked: + 0.00
Earnings Date 11/06/08 (unconfirmed)
Average Daily Volume = 1.5 million
 

New Strangles

None today.
 

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