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Education and Financials

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NEW DIRECTIONAL CALL PLAYS

ITT Edu. Serv. - ESI - close: 101.29 change: +1.38 stop: 97.25

Why We Like It:
ESI is flashing a bullish reversal signal. The stock has been under performing the market for three weeks. The education stocks were hammered on April 1st following the earnings report from APOL the night before. Shares of ESI have fallen toward what should be support near $100 and its rising exponential 200-dma. Plus the stock has a trendline it just tagged (see chart). Today's session has produced a bullish engulfing candlestick, which can be interpreted as a one-day bullish reversal signal.

I am suggesting readers buy calls now. This is going to be a short-term play as ESI is due to report earnings on April 23rd and we do not want to hold over the announcement. I'm setting a very tight stop loss under today's low. More aggressive traders could put their stop under $95.00, which is the next level of support.

Our first target is $10.7.00. Our second target is $111.50.

Suggested Options:
We are suggesting the May calls.

BUY CALL MAY 100 ENJ-ET open interest= 108 current ask $9.00
BUY CALL MAY 105 ESI-EA open interest= 327 current ask $6.60
BUY CALL MAY 110 ESI-EB open interest= 219 current ask $4.70

Annotated Chart:
ESI

Picked on    April 14 at $101.29
Change since picked:      + 0.00
Earnings Date           04/23/09 (confirmed)
Average Daily Volume =       1.4 million  
Listed on April 14, 2009         


PNC Financial - PNC - close: 36.69 change: -3.61 stop: 29.90

Why We Like It:
PNC is a fast moving financial stock. Currently the market is in rally mode and we're expecting investors to continue buying the dips, especially in the financials. The profit taking that began today could carry over into tomorrow. We want to buy the dip in PNC.

I am suggesting readers buy calls on PNC if shares dip into the $33.50-32.00 zone. We'll start the play with a stop loss at $29.90. If triggered our first target is $36.50. Our second target is $39.90. This is going to be a very short-term play. We plan to exit ahead of the company's earnings report on April 23rd.

Suggested Options:
I am suggesting the May calls.

BUY CALL MAY 35.00 PZH-EG open interest=7891 current ask $5.30
BUY CALL MAY 37.50 PZH-ES open interest=3192 current ask $4.00
BUY CALL MAY 40.00 PZH-EH open interest=3889 current ask $2.90

Annotated Chart:
PNC

Picked on    April xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           04/23/09 (confirmed)
Average Daily Volume =        12 million  
Listed on April 14, 2009         


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