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August 14, 2013  Wed 12:19 PM CT

LEN: SEE CHART GET CHAIN FIND STRATEGIES
Lennar continues to decline along with most other homebuilders, but one trader is turning bullish today.

optionMONSTER's Heat Seeker system detected the purchase of 2,000 September 32 calls for $1.28 and the sale of 2,000 September 36 calls for $0.23. Volume was well above the previous open interest in each strike, clearly showing that this is new activity.

This bullish vertical spread cost the trader $1.05, which is the amount at risk if LEN remains below $32 through expiration in mid-September. The maximum potential gain is $2.95 if shares are anywhere above $36. (See our Education section)

LEN is down 1.4 percent to $31.71, just off its 52-week lows of a year ago. Shares were at highs and testing resistance at $44 in mid-May but have been sliding since with the rest of the sector as interest rates rise.

More than 20,000 LEN options trade today, triple its daily average for the last month. Overall calls are outpacing puts by 1.5 to 1.
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Timing the Trade

Both break outs and a break downs need to have a couple things happen before it is considered a confirmed break out or break down by technical definition!  The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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