by Steve Sarnoff
April 29, 2007 This Week, A Transport Play Stocks are making a record run to the upside. They will try to continue the flow higher, but will likely face increasing resistance. Will we
finally see the post-rally consolidation? Time will tell. Interest rates are backing up and the much-maligned dollar is due to get some technical
support. The mettle of technical support for the metals is being tested. Oil is looking higher and rising oil could pressure the high-flying
Transports. This week, I've found just such a put play for you to vie forfun and profits. So, without further ado, here is… This Week's Option Recommendation Buy the UPS July $70 put, for $155 or less, good this week. Shares of United Parcel service, Inc. trade on the NYSE under the symbol "UPS". The symbol for this week's reco is "UPSSN". UPS shares closed Friday at $71.50. Their 52-week range is $65.50-$83.99. The $70-strike put is an "out-of-the-money" option, with its premium for time and volatility only. Your broker can give you more information on the world's largest package delivery company, but I'll tell you why I like a put
recommendation here. Shares have rebounded from March's lows (below $70) and are now encountering significant resistance from $72 to $73.77. Above that, I see
resistance at $75-$76. The overall character of price movement implies the likelihood of lower prices down the road. I see underlying support
at: $68.86-$71.00 and my target zone of $60-$65. Conservative traders should look to sell some of their positions if shares make a quick move toward $70. Speculative traders may want to look for a multiplier move, if shares break down to the low-to-mid-$60s. If UPS falls to $65, each $70 put will have $500 of intrinsic value. If my expectations go awry and UPS is at or above $70 on the third Friday in July, your option will expire worthless. That is your risk. | 
