Elliott Gue remains bearish on the overall market and suggests several short sales and puts. On the other hand, David Fried remains bullish and recommends a package of stocks undergoing share repurchases. Larry McMillan offers both bullish and bearish picks, recommending both puts and calls on specific stocks. (For more information on these advisors, click on their photos.)
For those familiar with the complexities of options, Larry McMillan, editor of The Option Strategist, offers the following suggestion: we have a new sell signal in IBM (IBM NYSE). In our portfolio, we will buy three IBM September 85 puts at a price of 5.50 or less. Stop yourself out on a close above 84. On the upside, we are close to a buy signal in Johnson & Johnson (JNJ NYSE). We have a conditional ‘buy’ for JNJ, but only on a close above 53. In that case, we would buy four JNJ October 50 calls .
David Fried, editor of The Buyback
Letter , focuses on companies that are
repurchasing their own shares. His Buyback Premium Portfolio is beating the S&P 500
by over 119% since its inception on August 2, 2000. Says Fried, "We
recommend buying equal amounts of the following four stocks at
market. Ryland Group (RYL NYSE), a national
homebuilder; Indymac Bancorp (NDE NYSE), a mortgage
banker; AutoNation (AN NYSE), a nationwide auto retailer;
and Principal Financial (PFG
NYSE), which provides financial services."
Elliott Gue, in his trading-oriented service,
Trading Floor Pros , has recently increased his short
positions in two stocks. "We recommend that traders take short positions in
Centex (CTX
NYSE), the residential homebuilder. Short above $71 - with a stop
at $79.27. We also short Morgan Stanley (MWD NYSE).
We initially took a short position in MWD at $44.58 and increased
this position at $46.29. Keep a stop at $50. In
his Wall Street
Winners , Gue adds, "Capital One (COF
NYSE) has more room to
fall due to its previous meteoric rise. Buy Capital
One Dec. Puts below $5.50 We don’t see a bounce much past 48; the
downside is in the low 40s, if not
worse."
