TOL Swinging Up

Maintain Calls for More Gains

By Bryan Bottarelli
Wednesday, November 29, 2006 3:21 PM EST
Wed, 29 Nov 2006 20:21:00 GMT

Dear Bottarelli Research Member,

The latest real estate figures show that home prices either fell or were flat in seven of 10 major U.S. metropolitan areas. At the same time, annual price gains slowed to their lowest rate in nine years. Although this may sound like bad news, it’s actually a good thing for homebuilders like TOL.

You see, lowered prices mean that inventory is getting sold (albeit for a reduced price, but still sold nevertheless). And to many, this could signal that we’re close to a housing bottom. This is the reason why shares of Toll Brothers (TOL – NYSE) are rallying today, sending your TOL March 30 Calls (TOL CF) all the way up to $3.10 per contract. Hold for more gains!

TOL

Also maintain your $4.90 sell price on the HES January 45 Calls (HES AI). With the stock opening up fractionally higher on the day, it’ll just take one little jump to fill these contracts at $4.90, if they haven’t been filled already.

HES

Also looking good early on is your MON January 50 Puts (MON MJ), your PEIX January 17.5 Calls (PFQ AW), and your Charles Schwab January 17.5 Calls (SHQ AW), as each stock is moving in our direction.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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