NEW DIRECTIONAL CALL PLAYS

Best Buy Inc. - BBY - close: 38.45 change: +0.55 stop: 36.45

Why We Like It:
Shares of BBY have been under performing the retail sector and the S&P 500 the last several days but it appears the correction might be ending. The stock is bouncing from a test of its rising 50-dma and is relatively close to its long-term trendline of higher lows. This looks like a great spot to speculate on a rebound back toward the 2009 highs and beyond. I do consider this a more aggressive trade given BBY's recent weakness.

I am suggesting call positions now. Our first target to take profits is at $41.40. Our second target 46.50. The Point & Figure chart is bullish with a $54 target.

Suggested Options:
I am suggesting the October, November or December calls but my preference is for Decembers, specifically the December $40s.

BUY CALL OCT 40.00 BYY-JH open interest=6398 current ask $0.85

BUY CALL DEC 40.00 BYY-LH open interest=2992 current ask $2.40
BUY CALL DEC 42.00 BYY-LP open interest=1167 current ask $1.65

Annotated Chart:

Picked on September 21 at $ 38.45
Change since picked:       + 0.00
Earnings Date            12/16/09 (unconfirmed)
Average Daily Volume =        8.7 million  
Listed on September 21, 2009