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Consumer Electronics and Retail

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NEW DIRECTIONAL PUT PLAYS

Apple Inc. - AAPL - close: 89.19 change: -2.22 stop: 93.05

Why We Like It:
Technology stocks were some of the market's worst performers today. Earlier this month everyone was praising tech stocks as leaders but now investors are selling into strength. The action in AAPL the last two days looks bearish. The stock failed under $93.00 twice in a row. Today's session produced a bearish engulfing candlestick. Adding new put positions right now might be a little aggressive. The next GDP report is due out tomorrow. If the GDP numbers are better than expected then AAPL could see a relief rally. Odds are good the GDP number will be bad. The question is just how bad? I'm suggesting put positions with a stop loss above today's high. Our first target is $85.05. Our second target is $81.00. The Point & Figure chart is bearish with a $74 target.

Suggested Options:
I'm suggesting the March puts.

BUY PUT MAR 90.00 QAA-OR open interest=25604 current ask $4.95
BUY PUT MAR 85.00 QAA-OQ open interest=58642 current ask $2.80
BUY PUT MAR 80.00 QAA-OP open interest=34902 current ask $1.46

Annotated Chart:
Apple Inc. (AAPL)

Picked on February 26 at $ 89.19
Change since picked:      + 0.00
Earnings Date           04/23/09 (unconfirmed)
Average Daily Volume =        26 million  


Sears Holding - SHLD - close: 35.54 change: -0.29 stop: 37.05

Why We Like It:
SHLD reported earnings this morning and actually beat analysts estimates by a wide margin but investors chose to sell into strength. Expectations are for the company to struggle with the consumer suffering so much. I want to see a new relative low so I am suggesting a trigger to buy puts at $34.25. If triggered our first target is $30.25. Our second target is $27.75.

FYI: SHLD has a relatively high amount of short interest and any sudden strength makes it a candidate for a short squeeze. You have to pay attention to your stops!

Suggested Options:
I am suggesting the March puts.

BUY PUT MAR 35.00 KTQ-OG open interest=4629 current ask $2.70
BUY PUT MAR 30.00 KTQ-OF open interest=4733 current ask $1.05

Annotated Chart:
Sears holding (SHLD)

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           03/27/09 (unconfirmed)
Average Daily Volume =       1.2 million  


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