Two More Speculative Plays

LFC and FMCN Could Quickly Pop

By Bryan Bottarelli
Tuesday, January 23, 2007 3:40 PM EST
Tue, 23 Jan 2007 20:40:00 GMT

Dear Bottarelli Research Member,

We’re seeing a lot of trading opportunities pop up today, and I’d like to take full advantage of each one. The first name is a stock I’ve been talking about for a while, Focus Media Holding Ltd. (FMCN – NASDAQ).

FMCN

According to Barron’s, “the billboard business is hotter than ever, partly because of the potential for digital signs.” This trend is wonderful for FMCN, since they’re the dominant digital billboard company in China. As we’ve seen with the China plays, these companies have the ability to make big moves very quickly — and the trick is to enter into the plays during a 4-5 day “calm” period and be positioned to ride the upside once they pick up any renewed momentum. That’s exactly the situation I think we have in both FMCN and LFC, so I’d like to offer two new speculative upside plays.

PLAY: Buy the FMCN February 80 Calls (QOH BP) at or under $2.35, good for the day. Place a protective stop loss at $1.40.

The second speculative upside play comes in the form of China Life Insurance (LFC – NYSE).As I’ve mentioned before, I wanted to wait for LFC to come back down to $45.00 before entering a new upside play, and with the stock currently trading for $45.77, I think we’re close enough.

LFC

When I look at the LFC February 50 calls (LFC BJ), which are currently trading for only $0.65, it looks like we could have a quick double on our hands if LFC moves to the upside. So let’s make a speculative play and enter these cheap calls now.

PLAY: Buy the LFC February 50 calls (LFC BJ) at or under $0.75, good for the day. Place a protective stop loss at $0.30.

Lock and load

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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