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NEW DIRECTIONAL CALL PLAYS

Baidu Inc. - BIDU - close: 144.59 change: +7.37 stop: 139.00

Why We Like It:
Chinese search company Bidu.com has been showing relative strength. The stock has pretty much ignored the weakness in the S&P 500 and has been building on a pattern of higher lows. Aggressive traders might want to buy today's bounce with a stop loss under today's low. I would rather wait for BIDU to breakout over resistance at the 100-dma. I'm suggesting readers use a trigger to buy calls at $155.00. If triggered our first target is $169.00 and our second target is $178.00. We are starting the play with a wide stop loss because shares can be so volatile. You might want to consider a stop loss at $144.90 instead. FYI: The Point & Figure chart is bullish with a $198 target.

Suggested Options:
We are suggesting the March or April calls.

BUY CALL MAR 150 BDQ-CJ open interest=3300 current ask $6.80
BUY CALL MAR 160 BDU-CL open interest=3010 current ask $3.50
BUY CALL MAR 170 BDU-CN open interest=2381 current ask $1.60

BUY CALL APR 150 BDQ-DJ open interest= 280 current ask $12.20
BUY CALL APR 160 BDU-DL open interest= 317 current ask $ 8.30
BUY CALL APR 170 BDU-DN open interest= 187 current ask $ 5.40

Annotated Chart:
BIDU

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           04/23/09 (unconfirmed)
Average Daily Volume =       2.6 million  


Freeport McMoran - FCX - close: 28.41 change: +1.92 stop: 25.85

Why We Like It:
FCX has been bouncing around the $26.00-32.00 range for a few weeks now. Today's comments from the Chinese Minister of Industry about the Chinese economy recovering sent copper and copper miners like FCX higher. Will the rally continue or will it fail? We have a lot of options for us. We could plan bearish plays on a breakdown under $26.00 or a failed rally near $32.00. Or we could plan bullish plays on a breakout over $32.00 or a dip back to $26.00. At the moment I'm suggesting readers prepare to buy another dip near $26.00. Our trigger will be $26.35. If triggered our bullish target is $30.85. The P&F chart is currently bullish with a $37 target but a breakdown under $26.00 would produce a new sell signal.

Suggested Options:
We are suggesting readers buy a dip with a trigger at $26.35. If triggered I'm suggesting the April calls.

BUY CALL APR 25.00 FCX-DE open interest= 535 current ask $5.65
BUY CALL APR 27.50 FCX-DY open interest= 368 current ask $4.20
BUY CALL APR 30.00 FCX-DF open interest=4546 current ask $2.99

Annotated Chart:
FCX

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           04/23/09 (unconfirmed)
Average Daily Volume =      26.7 million  


NEW DIRECTIONAL PUT PLAYS

Goldman Sachs - GS - close: 81.38 change: -4.89 stop: 85.15

Why We Like It:
GS displayed significant relative weakness on Tuesday. The stock broke down under short-term support at $85.00 and fell toward stronger support at $80.00. Yet the stock closed under technical support at its 100-dma and 50-dma. The action in the stock continues to grow more bearish. The market has the potential to be extremely volatile as the S&P 500 floats around this 700 level. Will it bounce or will it crash to new lows? If the S&P 500 or the banking sectors continue to fall then GS will likely follow and it will move fast. FYI: The P&F chart is bearish with a $67 target.

I am suggesting that readers use a trigger to buy puts at $79.00. If triggered our first target is $70.25. Our second target is $61.00.

Suggested Options:
Our trigger to buy puts is $79.00. I'm suggesting the March or April puts.

BUY PUT MAR 80.00 GS-OP open interest=10114 current ask $5.80
BUY PUT MAR 75.00 GS-OO open interest=12512 current ask $4.00
BUY PUT MAR 70.00 GS-ON open interest=23442 current ask $2.74

BUY PUT APR 75.00 GS-PO open interest=12053 current ask $8.00
BUY PUT APR 70.00 GS-PN open interest=19729 current ask $6.30
BUY PUT APR 65.00 GS-PM open interest= 8400 current ask $4.85

Annotated Chart:
GS

Picked on February xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           03/17/09 (unconfirmed)
Average Daily Volume =        27 million  


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