SOLD -1 SAP 100 NOV 08 37.5 PUT @3.40

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Wrote a put on SAP. Fee \$7.50. The market looks poised to move up. S&P at 895 risk/reward at this point looks favourable. I am merely picking some strong companies to ride up this short term up leg of the broad market.

SAP has ZERO debt and \$2 billion in cash! It isn't going down anytime soon. The \$34 support looks strong and the upside looks open. Max pain for Nov is \$45. Again, I'm in this for a favourable risk/reward ratio.

Upside: \$2B in cash and \$0 debt. Battered software stock with a waterfall dive just 2 months ago. Possible reverse head and shoulder formation in the making. Confirmation if it breaks \$40. Lots of unfilled gaps between \$45 - \$55.

Resistance: \$40

Downside: Some sort of triangle forming, but volume not decreasing as shown in consolidation. Still an unfilled up gap below \$33.

Support: \$32.40, high of 10/28 and low of open gap.

Bottom line: At \$34.50, the upside/downside ratio is about 2 to 1. Plus the broad market looks poised for a run up.

[Sap AG]: