Option traders appear to be setting up for a bullish move on CA Technologies (CA). Traders plowed into 13,932 new call option contracts -- 19.32 times the average volume -- on the stock on Monday. And we know that traders were eager to get into this trade because 98% of the trades came in on the ask price.

CA recently bounced off of support at $18 and is nearing resistance at $20.50. The stock closed Monday at $20.17, up 6.69% during the past month.

Analyst upgrades:

• Societe Generale upgraded shares of Credit Suisse (NYSE: CS) to Buy from Sell as they believe the company is the European investment bank investors should own as sentiment gradually improves.
  
• Societe Generale also raised Deutsche Bank (NYSE: DB) to Hold from Sell as they believe it has managed the credit crisis well and that the government bailout of the GSEs will improve investor sentiment.
  
• Citigroup upgraded shares of Kimberly Clark (NYSE: KMB) to Buy from Hold as they expect the company to benefit from falling materials and energy prices. The firm raised their target to $71 from $60.
• UST Inc (NYSE: UST) was lifted at Morgan Stanley to Equal Weight from Underweight.
  
• Corning (NYSE: GLW) was upgraded to Overweight from Market Weight at Thomas Weisel.

Analyst downgrades:

• Credit Suisse downgraded the U.S. Homebuilders sector to Market Weight from Overweight to reflect deteriorating traffic trends and higher valuations. In addition, the firm cut Toll Brothers (NYSE: TOL), Pulte Homes (NYSE: PHM), D.R. Horton (NYSE: DHI) and KB Home (NYSE: KBH) to Neutral from Outperform.

Analyst upgrades:

• Merriman upgraded shares of Netezza (NYSE: NZ) to Buy from Neutral following the company's solid Q2 results as they believe it is well-positioned for strong operating results heading into 2H09.
  
• JP Morgan raised Cabot (NYS: CBT) to Overweight from Neutral. The firm expects 2009 to be a better year given lower raw material costs and higher contract prices.
  
• JP Morgan also upgraded Royal Ahold (OTC: AHONY) to Overweight from Neutral on valuation.
  
• Liberty International (OTC: LBYIY) was upgraded to Hold from Sell at Deutsche Bank.
  
• BMO Capital upgraded Royal Bank (NYSE: RY) to Market Perform from Underperform and Bank of Montreal (NYSE: BMO) to Outperform from Market Perform.

Analyst downgrades:

• Jefferies downgraded shares of Constellation Energy (NYSE: CEG) to Underperform on Hold on concerns the company will come under increasing pressure to issue equity. The firm lowered its target to $60 from $71.
• Thomas Weisel downgraded Williams-Sonoma (NYSE: WSM) to Market Weight from Overweight citing continued macro pressures.
  
• Wachovia has concerns that Kayne Anderson's (NYSE: KED) book value will be pressured by its investment in ProPetro Services, trading losses associated with SemGroup, and negative developments at Quest Midstream. The firm cut shares of Kayne to Market Perform from Outperform.
• Energy Conversion (NASDAQ: ENER) was downgraded to Neutral from Buy at Piper.
  
• Deutsche Bank cut International Paper (NYSE: IP) and Domtar (NYSE: UFS) to Hold from Buy.
  
• H&E Equipment (NASDAQ: HEES) was lowered at Credit Suisse to Neutral from Outperform.

Analyst initiations:

• Morgan Stanley yesterday initiated Elan Corp (NYSE: ELN) with an Overweight rating. The firm sees a low-probability of a Tysabri withdrawal.
  
• ThinkPanmure views On Semiconductor (NASDAQ: ONNN) as a nice turnaround story with opportunities for shares gains in notebooks and consumer gaming platforms. Shares were initiated with a Buy rating and $14 target.
• Petrohawk Energy (NYSE: HK) was assumed with an Outperform rating at Morgan Keegan.
  
• Regency Energy (NASDAQ: RGNC) was initiated at Merrill Lynch with a Neutral rating.

General Electric Co. (NYSE: GE) opened at $39.45. So far today the stock has hit a low of $39.09 and a high of $39.77. As of 10:50, GE is trading at $39.51, up $0.22 (0.6%).

GE surged yesterday and has reached a new one-year high today after the company's GE Energy Financial Services unit bought a stake in natural gas processor and distributor Regency Energy Partners (NASDAQ: RGNC) from HM Capital Partners for $603 million. Though GE is a notoriously flat stock lately, Warren Buffett saw potential for long-term growth when he bought nearly 8 million shares in the low 30's in Q1 2006. With its new step into the energy sector, some analysts think GE is poised to break free of its flat pattern. Recent technical indicators for GE have been bullish but deteriorating slightly, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider a December bull-put credit spread below the $35 range. GE hasn't been below $35 since April and has shown support around $37 recently. This trade could be risky if the stock ends its moderately bullish run, but even if that happens, this position could be protected by its 200 day moving average, which is currently at $36 and rising.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent controls a long, hedged position in GE. He does not own or control a position in RGNC.

Main market news here.

UBS upgraded US Airways Group Inc. (NYSE: LCC) to Neutral from Reduce, saying a capacity cut by rival Southwest Airlines Co. (NYSE: LUV) could improve the outlook for domestic fares. In addition US Airways shares are down more than 50% so far this year and should move higher on any good news.

The Wall Street Journal reported that Delta Air Lines Inc. (NYSE: DAL) is negotiating a deal for a possible order of 125 of Boeing Co.'s (NYSE: BA) new 787 Dreamliner aircraft. The deal could be worth $20 billion. But AP is reporting that Jim Whitehurst, Delta's COO said the airline was in the deciding stage between Boeing's new 787 Dreamliner and the Airbus A350.

Alcoa (NYSE: AA) shares jumped nearly 3% to a six-year-high yesterday on renewed speculation that BHP Billiton Ltd. (NYSE: BHP) has revived plans for a $40 billion takeover of Alcoa. Alcoa has eased to close up 0.7%. Today, however, Alcoa's shares were down 2% in Europe after sources said BHP is actually more interested in Alcan (NYSE: AL) and may offer a competing bid to that of Alcoa's hostile takeover one for Alcan. Alcan shares rose 1% in Europe.

Expedia Inc. (NASDAQ: EXPE) said it plans to buy back up to 42% (116.7 million) of its common stock for $3.5 billion at prices ranging between $27.50 and $30.00. With the stock closing at $25.50 yesterday, the stock is up 16.4% in pre-market trading (8:09 a.m.) to $29.67.

Yesterday, Whole Foods Market Inc. (NASDAQ: WFMI) said it extended its offer to buy Wild Oats Market Inc. (NASDAQ: OATS). The deal, worth about $565 million, is opposed by federal antitrust regulators. Jon Ogg also has another suggestion, perhaps Kroger (NYSE: KR) should bid for OATS.

Surprising analysts who didn't think Citi had the means in its current cost structure, Citigroup (NYSE: C) flagged its interest in buying a bank in Germany that would be for sale, but played down recent talk that it was about to swoop on Commerzbank.

General Electric Co.'s (NYSE: GE) energy unit will pay $603 million for an estimated 37% stake in Regency Energy Partners LP (NASDAQ: RGNC), an owner of natural gas pipelines and storage equipment.

Apple Inc. (NASDAQ: AAPL) climbed 3.8% yesterday on news of a longer battery life (8 hours of talk time) as well as other improvements in its iPhone over the current standards of handset devices. However, the WSJ writes that many businesses don't plan to switch from their current internal email system (could be RIM, Microsoft etc.) and sync with the iPhone.

Hewlett-Packard Co. (NYSE: HPQ) said it signed a definitive agreement to acquire SPI Dynamics Inc., a provider of Web application security assessment software and services, for undisclosed terms.

SIRIUS Satellite Radio (NASDAQ: SIRI) today announced that Volkswagen of America, Inc. will offer SIRIUS as standard equipment in several models including the Jetta, Passat and EOS models.