NEW DIRECTIONAL CALL PLAYS

Apple Inc. - AAPL - close: 139.48 change: +3.60 stop: 134.45

Why We Like It:
Normally on a big event like a new product launch the trade is to sell the news. However, AAPL's new 3GS iPhone isn't necessarily a new product just an improvement. Furthermore the stock has been sinking for two weeks. Well, maybe not two weeks. This past week was more of a sideways consolidation near $135.00. Friday's bounce looks like a new bullish entry point. With just a few days left before the end of the quarter AAPL could be a target for window dressing by fund managers. The stock is up huge in the second quarter. What manager doesn't want to put a winner like this in their portfolio?

I'm suggesting bullish positions now. Some readers may want to wait for another dip back toward $137-136. Others may want to wait for a new rise over possible resistance at $140. Our primary target is $149.00. I'm setting a secondary target at $157.50. More aggressive traders could aim higher. We plan to exit ahead of the July 21st earnings report. FYI: The Point & Figure chart is forecasting a $231 target.

Suggested Options:
July options expire after July 17th. Readers may want to consider buying October strikes for the extra two days. I'm suggesting Julys. It is always up to the individual trader to decide which month and which strike price best suits your trading style and risk profile.

BUY CALL JUL 135 APV-GG open interest=16693 current ask $8.35 
BUY CALL JUL 140 APV-GH open interest=25276 current ask $5.45
BUY CALL JUL 145 APV-GI open interest=21145 current ask $3.35
BUY CALL JUL 150 APV-GJ open interest=27005 current ask $1.90

Annotated Chart:

Picked on     June 20 at $139.48
Change since picked:      + 0.00
Earnings Date           07/21/09 (unconfirmed)
Average Daily Volume =        20 million  
Listed on  June 20, 2009         


Navistar Intl. - NAV - close: 45.16 change: +0.44 stop: 42.40

Why We Like It:
Shares of NAV look great for a company that makes trucks, busses, engines and military vehicles. Given all the Chrysler and GM press you could have thought all vehicle manufacturers were crashing. NAV stock looks pretty bullish right here. Traders just bought the dip near $42.50. I'm suggesting short-term call positions now but we want to use a relatively tight stop loss because NAV still has potential resistance in the $46-47 zone dating back to 2007 and early 2008 lows. Our first target is $49.85. Our second target is $54.00. Currently the Point & Figure chart is bullish with a $64 target.

Suggested Options:
Earnings are not until September so I'm suggesting the October or the July calls.

BUY CALL JUL 45.00 NAV-GI open interest= 7111 current ask $3.90
BUY CALL JUL 50.00 NAV-GJ open interest=18430 current ask $1.95

BUY CALL OCT 50.00 NAV-JJ open interest= 144  current ask $4.50
BUY CALL OCT 55.00 NAV-JK open interest=  65  current ask $2.85

Annotated Chart:

Picked on     June 20 at $ 45.16
Change since picked:      + 0.00
Earnings Date           09/03/09 (unconfirmed)
Average Daily Volume =       1.1 million  
Listed on  June 20, 2009