NEW DIRECTIONAL CALL PLAYS

PartnerRe Ltd. - PRE - close: 79.10 change: +0.61 stop: 77.75

Company Description:
PartnerRe Ltd. (NYSE:PRE) is a provider of risk-assumption solutions for the global insurance and capital markets. We provide insurance companies with multiple lines of reinsurance — property & casualty, catastrophe, specialty lines, life, and alternative risk transfer — through our offices around the world. (source: company press release or website)

Why We Like It:
PRE looks like a bullish candidate right now. The stock has been lagging the rally in the IUX insurance index but shares look a lot more healthy. PRE has been digesting its February gains with a nice sideways consolidation. Traders are buying the dips again and technical indicators are turning bullish. I would be tempted to buy calls now. However, we're expecting a market dip early this week. I want to play it safe so we'll use a trigger.

The plan is to buy calls if PRE hits our trigger at $80.55. If triggered we'll use a stop loss at $77.75 (under Friday's low). Our first target is $84.75. Our second, longer-term target is $89.00. There is potential resistance near the October 2009 highs so don't be surprised to see some congestion there. If the market does retreat this week we'll be watching for an alternative entry point in PRE to buy the rebound.

Trigger to buy calls at $80.55

Suggested Position: BUY CALL APRIL $80.00 (PRE 10D80.00) current ask $1.05

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 04/27/10
Average Daily Volume = 989 thousand
Listed on March 20th, 2010


NEW DIRECTIONAL PUT PLAYS

Sears Holding - SHLD - close: 103.61 change: -1.23 stop: 106.26

Company Description:
Sears Holdings Corporation (NASDAQ: SHLD) is the nation's fourth largest broadline retailer with approximately 3,900 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance (source: company press release or website)

Why We Like It:
I mentioned SHLD as a watch list candidate on Thursday night. This retail stock has been showing lots of relative strength. Yet the rally was unable to breakout past the January highs. Friday's session actually produced a bearish engulfing (reversal) candlestick pattern. I suggested that a failed rally at the January highs could be forming a bearish double top. Normally a bearish engulfing pattern needs to see confirmation. Friday's low was $102.85. I am suggesting a trigger to buy puts at $102.40. If triggered our target is the 50-dma but since that will be a moving target we will aim for $98.50. This isn't the best risk-reward ration because SHLD's daily range was so large on Friday and I'm suggesting a stop loss above Friday's high. Therefore we need to keep positions small and consider this an aggressive trade.

Trigger to buy puts at $102.40 (use small positions)

Suggested Position: BUY PUT APRIL $100 (SHLD 10P100.00) current ask $2.31

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 05/20/10
Average Daily Volume = 900 thousand
Listed on March 20th, 2010


Varian Semiconductor - VSEA - close: 29.29 change: -0.53 stop: 30.55

Company Description:
Varian Semiconductor Equipment Associates, Inc. is the leading producer of ion implantation equipment used in the manufacture of semiconductors. The company is headquartered in Gloucester, Massachusetts, and operates worldwide. (source: company press release or website)

Why We Like It:
This is a simple relative strength play, or really the lack of strength. VSEA has been under performing the NASDAQ and its peers in the semiconductor sector. The stock's oversold bounce is rolling over and the stock appears to be forming a bearish head-and-shoulders pattern. More conservative traders could wait for a decline under the February low of $27.58 to launch positions. I'm suggesting new bearish positions now given Friday's failed rally and bearish reversal pattern under the $30.00 mark. Our first target to take profits is the $26.00 level. I do expect some support in the $26-25 zone so expect a bounce. Our final target is $23.50. More aggressive traders could aim lower.

Suggested Position: BUY PUT APRIL $30.00 (VSEA 10P30.00) current ask $1.55

Annotated Chart:

Entry on March 22nd at $ 29.29(?)
Earnings Date 04/29/10
Average Daily Volume = 743 thousand
Listed on March 20th, 2010