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REIT, Make Up, and Credit Cards

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NEW DIRECTIONAL CALL PLAYS

AvalonBay - AVB - close: 60.53 change: -1.27 stop: 64.05

Why We Like It:
The rally in the REITs appears to have run out of steam. Last week saw a bearish-reversal top in AVB near $70.00 and it's taken a week of churning before the stock finally broke the bullish trend of higher lows. The break today is not very convincing so we want to see some confirmation.

We are suggesting readers buy puts on a breakdown with a trigger to enter positions at $59.00. If triggered we're setting two targets. Our first target is $55.10. Our second target is $50.55. FYI: The Point & Figure chart currently points to $50.00.

Suggested Options:
We are suggesting the January puts. Our trigger is $59.00.

BUY PUT JAN 60.00 AVB-ML open interest=1704 current ask $5.60
BUY PUT JAN 55.00 AVB-MK open interest= 128 current ask $3.60
BUY PUT JAN 50.00 AVB-MJ open interest= 236 current ask $2.20

Annotated Chart:
AVB

Picked on December xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           02/04/09 (unconfirmed)
Average Daily Volume =       3.5 million  


Avon Products - AVP - close: 22.46 change: -0.79 stop: 24.05

Why We Like It:
AVP's bounce from its November lows has run out of gas. Shares have struggled with resistance near $24.00 for days and now the 50-dma is moving lower and adding additional pressure. We are suggesting bearish put positions now. More conservative traders may want to wait for a drop under possible support at $22.00.

We are setting two targets. Our first target is $20.25. Our second target is $18.60. FYI: The Point & Figure chart is bearish with an $11 target.

Suggested Options:
We are suggesting the January puts.

BUY PUT JAN 22.50 AVP-MX open interest=1333 current ask $1.25
BUY PUT JAN 20.00 AVP-MD open interest=5655 current ask $0.45

Annotated Chart:
AVP

Picked on December 23 at $ 22.46
Change since picked:      + 0.00
Earnings Date           02/05/09 (unconfirmed)
Average Daily Volume =       4.6 million  


Capital One Financial - COF - close: 29.00 chg: -0.94 stop: 31.51

Why We Like It:
I believe there are more lows in store for COF. The economic slowdown is no where close to being over. Consumers are already struggling to pay their debts. Those credit card statements will be even bigger in January when we start paying for those Christmas gifts. COF has built a bearish pattern of lower highs. We're suggesting put positions now.

Our first target is $25.50. Our second target will be a new relative low at $21.00. FYI: The P&F chart is bearish with a $17 target.

Suggested Options:
We are suggesting the January puts.

BUY PUT JAN 30.00 COF-MF open interest=22792 current ask $3.50
BUY PUT JAN 25.00 COF-ME open interest=30197 current ask $1.40

Annotated Chart:
COF

Picked on December 23 at $ 29.00
Change since picked:      + 0.00
Earnings Date           01/22/09 (unconfirmed)
Average Daily Volume =       8.5 million  


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