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NEW DIRECTIONAL CALL PLAYS

Foster Wheeler - FWLT - close: 20.61 change: +0.52 stop: 19.45

Why We Like It:
Traders won't let FWLT fill the gap from April 9th. The stock tries to pull back and bulls are buying the dips too fast. Currently shares are still under technical resistance at the 100-dma. I think the stock breaks that resistance this week. This is an aggressive play but the market continues to act strong in spite of the age of this rally.

Buy calls on FWLT now. More conservative traders could wait for a rise over $21.00 to initiate positions. Our target is $24.75. We do not want to hold over the early May earnings report. FYI: The Point & Figure chart is bullish with a $27 target.

Suggested Options:
I am suggesting the May calls but we plan to exit ahead of earnings.

BUY CALL MAY 20.00 UFB-ED open interest=2699 current ask $2.35
BUY CALL MAY 22.50 UFB-EA open interest=3496 current ask $1.25
BUY CALL MAY 25.00 UFB-EE open interest=3446 current ask $0.65

Annotated Chart:
FWLT

Picked on    April 15 at $ 20.61
Change since picked:      + 0.00
Earnings Date           05/06/09 (unconfirmed)
Average Daily Volume =       3.3 million  
Listed on April 15, 2009         


NEW MARKET NEUTRAL STRANGLE PLAYS

Google - GOOG - close: 379.50 change: +10.59 stop: n/a

Why We Like It:
It's earnings season again and that means we get another shot at a strangle on GOOG's earnings report. More often than not the stock will produce a huge post-earnings move and our strangle usually hits our target price within a day or two. It's not a guarantee and there have been times when GOOG doesn't move enough in one direction. The stock is volatile and that means options are expensive.

Really aggressive traders could try some sort of straddle or strangle with April options but they expire after this Friday's close and GOOG doesn't report earnings until Thursday night. I am suggesting readers use May options for their strangle.

NOTE: If GOOG gaps open more than $8.00 either direction tomorrow we will need to adjust our options appropriately. We will not be suggesting new positions after tomorrow.

Suggested Options:
I am suggesting the May $420 call and $340 put. That means we're expecting GOOG to move more than 10% on its earnings report. Our estimated cost is $18.10. We want to sell if either option hits $27.00 or higher.

BUY CALL MAY 420 GOP-ED open interest=1009 current ask $9.00
-and-
BUY PUT MAY 340 GGD-QE open interest= 872 current ask $9.10

Annotated Chart:
GOOG

Picked on    April 15 at $379.50
Change since picked:      + 0.00
Earnings Date           04/16/09 (confirmed)
Average Daily Volume =       3.8 million  
Listed on April 15, 2009         


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