NEW DIRECTIONAL CALL PLAYS

Edwards Lifesciences - EW - close: 68.03 change: +0.89 stop: 64.85

Why We Like It:
EW produces medical equipment designed to treat cardiovascular disease. The stock has been showing relative strength and set a new closing high on Tuesday. The Point & Figure chart is bullish with an $84.00 target. I'm suggesting readers buy calls on EW now or look for a dip near $66.00. The $70.00 level could be round-number, psychological resistance but shares are in blue-sky territory. I'm setting our target at $74.00. We will plan to exit ahead of the July 20th earnings report.

Suggested Options:
earnings are July 20th and July options expire after the 17th so I'm going to go ahead and list July calls but I prefer August calls.

BUY CALL JUL 65.00 EW-GM open interest= 127 current ask $3.70
BUY CALL JUL 70.00 EW-GN open interest= 732 current ask .70

BUY CALL AUG 65.00 EW-HM open interest= 139 current ask $5.10
BUY CALL AUG 70.00 EW-HN open interest= 328 current ask $2.20
BUY CALL AUG 75.00 EW-HO open interest= 468 current ask .70

Annotated Chart:

Picked on     June 30 at $ 68.03
Change since picked:      + 0.00
Earnings Date           07/20/09 (confirmed)
Average Daily Volume =       369 thousand 
Listed on  June 30, 2009         


NEW DIRECTIONAL PUT PLAYS

Agrium Inc. - AGU - close: 39.89 change: -1.36 stop: 41.65

Why We Like It:
The outlook for the chemical-fertilizer names has turned from sweet to sour in the last two months. The whole industry sold off hard in mid June. Now the bounce is struggling. I suspect there is more profit taking ahead for AGU. The stock can be volatile so we're using a wide stop loss. Aggressive traders can open positions now. I'm suggesting readers use a trigger to buy puts at $38.75, which would be a new relative low. If triggered our target is $31.00.

FYI: Readers should note that AGU is trying a hostile takeover for CF Industries, which is itself trying a hostile takeover of Terra Industries.

Suggested Options:
I am suggesting the August puts.

BUY PUT AUG 40.00 AGU-TH open interest=8905 current ask $3.50
BUY PUT AUG 35.00 AGU-TG open interest=1062 current ask $1.45

Annotated Chart:

Picked on     June xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           07/27/09 (unconfirmed)
Average Daily Volume =       4.2 million  
Listed on  June 30, 2009