- New Trades -


Pepsico, Inc. - PEP - close: 66.57

Comments:
12/24/11 update: PEP has been on our watch list with the suggested entry point to buy calls if shares can close over $66.25. The stock accomplished that task on Friday with a close at $66.57. We want to buy calls at the open on Tuesday morning with a stop loss at $62.75. PEP's recent breakout past its simple 200-dma and the $65-66 level is bullish. Both PEP and its rival KO are both breaking out past resistance. The two look poised to make a run (although it's probably a slow run) toward their 2011 highs.

Our target is $71.75. I would keep our position size small to limit our risk. FYI: The Point & Figure chart for PEP is bullish with an $81 target.

- Suggested (SMALL) Positions -
Dec 27, 2011 - entry price on PEP @ --.--, option @ -.--
symbol: PEP1319A70 2013 JAN $70 call - current bid/ask $ 2.66/ 2.74

12/27/11 launch positions at the open on Tuesday
12/23/11 PEP meets our entry point requirements at the closing bell.

Chart of PEP:

Current Target: $71.75
Current Stop loss: 62.75
Play Entered on: 12/27/11
Originally listed on the Watch List: 12/10/11


Starbucks Corp. - SBUX - close: 45.44

Comments:
12/24/11 update: Shares of SBUX, the ubiquitous coffee shop, have been steadily marching higher for months. This past week saw SBUX breakout past resistance near $45.00 and close at new all-time, record highs.

I am suggesting we launch small bullish positions at the open on Tuesday morning with a stop loss at $39.75. More conservative traders might want to consider a stop loss closer to the $42.50 area instead. Our target is $55.00. FYI: The Point & Figure chart for PEP is bullish with a long-term $75 target.

NOTE: 2014 calls are available.

- Suggested (SMALL) Positions -
Dec 27, 2011 - entry price on SBUX @ --.--, option @ -.--
symbol: SBUX1319A50 2013 JAN $50 call - current bid/ask $ 3.80/ 3.90

12/27/11 launch positions at the open on Tuesday

Chart of SBUX

Current Target: $55.00
Current Stop loss: 39.75
Play Entered on: 12/27/11
Originally listed on the Watch List: 12/10/11