ADOBE HAMMERED OVER 21% AFTER LOWER THAN EXPECTED FORECASTS

Once again the market may have provided us with an opportunity by terribly overdoing the sell-off with Adobe. Sure, the forecasts were lower than expected and Apple is also hurting them badly but if you notice the stock is currently trading at levels close to its 52-week low. So far the 52-week low level of $25.81 has held. If it were to break that level (meaning close below it), then all bets are off from the long-side and you are probably better off selling your position (which I would recommend be a small one). However, if we are able to hold this level and close above it for a few days as the stock consolidates over the course of the next few days, we could see a run to $28/share. So how should we play it? We could just buy the stock outright but I would less inclined to do so. I would purchase the Jan 2011 $28 strike call option trading at around $1.45 currently. If the stock was to make a run to even $27/share over the next few trading days, I believe we would see a substantial (possibly over 20%) rise in the price of the option. Not bad for $1.45 trade is it?