One of the favourite reading activities in my class is pegging our alphabet socks (from Sparklebox).
The children match the capital and lowercase letters on the socks as well as the patterns. This is a great activity for emergent readers. It supports alphabet and phonic knowledge, and pattern matching. Pegging promotes fine motor skills and strengthens fingers to get them ready for writing.
(Sometimes I've looked up from my guided reading group to discover that the dolls clothes have been pegged up too. My class are so sweet!)