Here at year end, C calls, YHOO calls and MEE calls look increasingly attractive. February 2011 calls on YHOO at 17 or 18 are appealing as a deal play or just as a general turnaround play. The stock is cheap. MEE, almost for sure, will be bought. Probably in the first quarter; and I'd have to think at least at $60, if not much higher.
In the first quarter, energy and financial stocks, I think, will dominate the S&P 500 index. While a quickening in world economic growth in 2011 will lift the oil and gas sector, I expect that banks and other representatives of the bear market will be the real surprises in the first quarter. Together, both groups have the potential to lift the S&P 500 back to its all-time high in the first half of the year.
As part of that process, I expect that C will finally trade into double digits. I'm no technician, but the stock has just lifted above its 50-week moving average for the first time since June 2007 and has set its sights on the 2009 high at $5.43. I look for the upside to accelerate once that resistance level is overcome, with a stronger barrier between $12 and $16 marking the 2011 highs.