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If the bounce rolls over...

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NEW DIRECTIONAL CALL PLAYS

Xilinx - XLNX - close: 18.53 change: +0.31 stop: 17.75

Why We Like It:
Several of the semiconductor stocks are actually showing some relative strength in spite of analyst comments a couple of weeks ago about how bad semiconductor sales will be for the next couple of years. Shares of XLNX have been developing a bullish trend of higher lows as it grinds against resistance near $19.00.

I'm suggesting readers use a trigger at $19.10 to buy calls on this stock. A breakout over $19.00 would produce a brand new P&F chart buy signal. There is potential resistance at $20.00 but if we are triggered I would aim for the 200-dma or higher. We'll set our first target at the 200-dma (currently $20.98) and our secondary target at $21.85. My time frame is four to six weeks.

Suggested Options:
I'm suggesting a trigger to buy calls at $19.10. I would use the April calls.

BUY CALL APR 17.50 XLQ-DW open interest=9090 current ask $1.80
BUY CALL APR 20.00 XLQ-DD open interest=8297 current ask $0.60

Annotated Chart:
XLNX

Picked on    March xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           04/22/09 (unconfirmed)
Average Daily Volume =        10 million  
Listed on March 11, 2009         


NEW DIRECTIONAL PUT PLAYS

Intuitive Surgical - ISRG - close: 97.55 change: -3.57 stop: 101.75

Why We Like It:
It's been a few weeks since we played ISRG. The stock's oversold bounce is stalling near the 50% retracement. This looks like a decent spot to bet on another drop to re-challenge the lows. I'm suggesting a stop loss above the recent highs. We want to use a trigger at $95.75 to open put positions. It looks like ISRG has short-term support near $96.00. If triggered our first target is $90.25. Our secondary target is $86.00. My time frame is less than four weeks. FYI: It's worth noting that the P&F chart is still bullish and that ISRG has a high amount of short interest. The most recent data listed short interest at almost 15% of the relatively small float of 38.3 million shares. That does make it a candidate for a short squeeze.

Suggested Options:
If triggered at $95.75 I'm suggesting the April puts.

BUY PUT APR 95.00 AXQ-PS open interest= 794 current ask $8.80
BUY PUT APR 90.00 AXQ-PR open interest=1273 current ask $6.60

Annotated Chart:
ISRG

Picked on    March xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           04/16/09 (unconfirmed)
Average Daily Volume =       1.4 million  
Listed on March xx, 2009         


Mastercard - MA - close: 147.84 change: -0.65 stop: 155.55

Why We Like It:
The oversold bounce in MA failed right where it should have under previous support and now new resistance at $150.00. This is an aggressive, higher-risk put play. The stock itself is volatile and the market still hasn't decide which direction it will go following Tuesday's short-covering. If the major indices continue higher then we will be stopped out in MA pretty quickly, especially if the financial participate. Thus we're trying to keep our risk at a minimum with a relatively tight stop for this high-dollar stock. You could even try shaving off a couple of dollars on the stop loss and probably still do okay (around $152.50ish).

We have two targets. Our first target is $136.00. Our second target is $126.00. More aggressive traders could aim for the $120.00 level of support. FYI: the Point & Figure chart is bearish with a $130 target.

Editor's Note: I think one of our biggest risks is that MA is one of the leading candidates to replace some of the ailing stocks in the Dow Jones Industrial Average. If MA is picked to join the Dow components the stock will likely gap open higher on us. That does raise the risk profile of this play!

Suggested Options:
I'm suggesting the April puts. Strikes are available in $5.00 increments. It is up to the individual trader to decide which month and which strike price best suits your trading style and risk profile.

BUY PUT APR 150 MAL-PJ open interest=2209 current ask $12.30
BUY PUT APR 140 MAL-PH open interest=1668 current ask $ 7.90
BUY PUT APR 130 MAL-PF open interest=1834 current ask $ 4.90

Annotated Chart:
MA

Picked on    March 11 at $147.84
Change since picked:      + 0.00
Earnings Date           04/30/09 (unconfirmed)
Average Daily Volume =       3.8 million  
Listed on March 11, 2009         


Wal-Mart - WMT - close: 47.46 change: -0.93 stop: 49.25

Why We Like It:
Do you remember WMT's recent same-store sales numbers? No? Well neither does the market. The company's sales were better than expected but it hasn't had much impact on the stock price. Investors used the pop in the stock price to sell it. I mentioned WMT a couple of weeks ago on a watch list and how was painting a bear-flag pattern. Well now the stock is poised to breakdown from that bear-flag and begin a new leg lower.

Fundamentally I think WMT is one of the best retailers out there and should do better than its peers but that's not stopping the decline in the share price. I'm suggesting readers use a trigger to buy puts at $46.75. If triggered my target is $43.00. I think this could take a while so my time frame is eight weeks but keep in mind that stocks tend to go down faster than they go up. Do not be surprised to see an oversold bounce at $45.00.

Suggested Options:
If triggered at $46.75 I would use the June puts although Aprils would probably work just as well.

BUY PUT JUN 45.00 WMT-RI open interest=9386 current ask $2.72
BUY PUT JUN 42.50 WMT-RV open interest=6730 current ask $1.91
BUY PUT JUN 40.00 WMT-RH open interest=4456 current ask $1.33

Annotated Chart:
WMT

Picked on    March xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           05/13/09 (unconfirmed)
Average Daily Volume =        29 million  
Listed on March 11, 2009         


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