Add Long-Term HOV Calls
Dear Bottarelli Research Member,
The major market averages are selling off today, so I want to take full advantage of this selling pressure by playing calls on a homebuilder stock that I’ve personally been involved with for years. You see, some of my contacts have mentioned that the Fed is now looking into issuing tax credits for new home sales, and this would offer a tremendous lift to this lagging industry.
On top of that, we could now be looking at 30-year fixed rates of 4% to 4.5% by year’s end, and that’ll be incredibly stimulating to homebuilders as well. Therefore, I want to positioned in some very long-dated options for upside recovery exposure in the homebuilding sector.
If the builders recover, you can bet that Hovnanian Enterprises (HOV – NYSE) will re-emerge as a market leader. Therefore, let’s establish a new position in the HOV January 2010 12.50 Calls (YZX AV) at or under $3.20, good for the week.
PLAY: Buy the HOV January 2010 12.50 Calls (YZX AV) at or under $3,20, good for the week.
Sincerely,
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