Dykstra: Get a Jolt From Best Buy Options

As the Dow continues to plow ever higher, investors have to be particularly careful in making stock selections. New highs create momentum and excitement, but they also leave us open to, at a minimum, a near-term retreat.

With that in mind, today's selection, Best Buy(BBY Quote), is an excellent fit for investors.

Since peaking at $60 in October, the company's stock has been in steady decline, sitting out the recent bullish market. Even though the company continues to provide guidance in line with 2007 estimates that brought the stock price up to its highs, the stock has struggled to gain any positive momentum.

The technical strength in the stock at the $47 range creates an excellent buying opportunity for the electronics giant.

Best Buy continues to grow rapidly, putting more distance between it and its closest competitor. When my kids want anything electronic, they only want to shop at Best Buy, because the store has become the go-to place for electronics shopping. This creates an incredibly strong market position for the company and protection against competitors. Best Buy has attained a level of market dominance that has crippled its closest competitor, Circuit City(CC Quote), and left Best Buy as the dominant brand in consumer electronics sales.

In order to take advantage of the cheap stock price and strong growth prospects, we are going to buy 10 September 40 (BBYIH) deep-in-the-money calls, using the $40 strike price, while paying $8.20 or better.

Game of Life

The divisional races in baseball have not changed much in the past three days, as the leaders remain the same. The Braves and Mets continue to play excellent baseball as they jockey for the top spot in the NL East. Quietly, the Phillies, despite having Ryan Howard on the disabled list, have worked their way back to .500, after taking three straight from the NL Central-leading Milwaukee Brewers.

The Los Angeles representatives, the Dodgers and the Angels, continue to lead the NL West and AL West, respectively. The Red Sox, boasting the best record in baseball, have a substantial lead in the AL East, with all the other teams below .500.