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NEW DIRECTIONAL PUT PLAYS

CNOOC Ltd - CEO - close: 89.19 change: +1.19 stop: 92.05

Why We Like It:
We didn't fare so well on CEO trying to catch the bounce from $90. Now the oversold bounce from $85 is failing near $90, which is right where it's supposed to. I'm suggesting readers buy puts now with a relatively tight stop loss at $92.05. We'll set a early target at $85.25. Our secondary target is $81.00. More aggressive traders might want to aim even lower. FYI: Tomorrow is February option expiration. Do not be surprised to see CEO hover and close near the $90.00 mark.

Suggested Options:
I'm suggesting the March puts. It is always up to the individual trader to decide which month and which strike price best suits your trading style and risk profile.

BUY PUT MAR 90.00 CEO-OR open interest= 104 current ask $6.90
BUY PUT MAR 85.00 CEO-OQ open interest=  79 current ask $4.60
BUY PUT MAR 80.00 CEO-OP open interest= 131 current ask $3.10

Annotated Chart:
CEO

Picked on February 19 at $ 89.19
Change since picked:      + 0.00
Earnings Date           03/17/09 (unconfirmed)
Average Daily Volume =       581 thousand 


Goldman Sachs - GS - close: 86.01 chg: +1.51 stop: 90.75

Why We Like It:
The oversold bounce in GS failed under the $90.00 level, which has been both support and resistance in the past few weeks. This move following Tuesday's bearish breakdown looks like an opportunity to open bearish plays. I'm suggesting puts now with a stop loss at $90.75.

Our first target is $81.00. Our secondary target is $76.00.

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

BUY PUT MAR 90.00 GS-OR open interest=4526 current ask $10.40
BUY PUT MAR 85.00 GS-OQ open interest=7329 current ask $ 7.90
BUY PUT MAR 80.00 GS-OP open interest=7373 current ask $ 5.85

Annotated Chart:
GS

Picked on February 19 at $ 86.01
Change since picked:      + 0.00
Earnings Date           03/18/09 (unconfirmed)
Average Daily Volume =      24.6 million  


Honeywell - HON - close: 30.23 change: -0.06 stop: 31.15

Why We Like It:
HON's sideways consolidation between $30 and $35 has developed a bearish trend of lower highs. The stock is poised to breakdown under $30.00 very soon although it may not be tomorrow. Friday is February option expiration and HON may close right on the 30.00 mark.

I'm suggesting readers buy puts if HON breaks $30.00 and hits our trigger at $29.70. If triggered our target is $26.10. FYI: An alternative, albeit unofficial entry point, would be a failed rally near $32.00.

Suggested Options:
I'm suggesting the March puts.

BUY PUT MAR 30.00 HON-OF open interest=2434 current ask $1.60
BUY PUT MAR 27.50 HON-OT open interest=2323 current ask $0.80
BUY PUT MAR 25.00 HON-OE open interest=2314 current ask $0.35

Annotated Chart:
HON

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           04/16/09 (unconfirmed)
Average Daily Volume =       7.1 million  


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