Editor's Note:

I strongly suspect that we're going to see a lot of bullish buy-the-dip candidates in the next two weeks. Readers may want to raise cash to be ready to take advantage of this opportunity.


NEW DIRECTIONAL CALL PLAYS

Fluor Corp. - FLR - close: 53.40 change: +0.64 stop: 47.45

Why We Like It:
If investors are buying stocks on the belief that a recovery is in progress then FLR, a construction stock, should be a buy. Shares recently broke through resistance near $50.00. We want to buy a dip back in the $50.00-48.00 zone. Officially our entry point will be $50.25. If triggered our first target is $54.80. Our second target is $59.00 but we may not have time. FLR is due to report earnings in less than three weeks. We do not want to hold over the announcement.

Suggested Options:
Trigger at $50.25. I'm suggesting the August calls.

BUY CALL AUG 50.00 FLR-HJ open interest=2133 current ask $4.70
BUY CALL AUG 55.00 FLR-HK open interest=3819 current ask $1.95

Annotated Chart:

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           08/10/09 (unconfirmed)
Average Daily Volume =       2.4 million  
Listed on  July 25, 2009         


IDEXX Labs - IDXX - close: 50.30 change: +2.31 stop: 44.95

Why We Like It:
IDXX has been consolidating sideways under resistance in the $47.00-47.50 zone for several weeks. Even the market's two-week rally was not enough to power a breakout. Investors were waiting for the company's earnings report. IDXX announced on Friday and beat Wall Street's estimates and guided higher. The stock finally broke resistance on the good news. With the market overbought odds are good that IDXX will retest broken resistance as new support.

The plan is to buy calls on a dip at $47.50. If triggered our first target is $52.00. Our second target is $54.90. Our time frame is four to eight weeks.

Suggested Options:
Trigger at 47.50. I'm suggesting the August or September calls.

BUY CALL AUG 50.00 UID-HJ open interest= 537 current ask $1.90

BUY CALL SEP 50.00 UID-IJ open interest=  7  current ask $2.80
BUY CALL SEP 55.00 UID-IK open interest=  0  current ask .80

Annotated Chart:

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           07/24/09 (confirmed)
Average Daily Volume =       383 thousand 
Listed on  July 25, 2009         


Legg Mason - LM - close: 27.13 change: -0.78 stop: 23.75

Why We Like It:
LM rallied to new 2009 highs with the breakout over resistance near $25.00. With the market overbought and due to correct we want to buy a dip in LM. The plan is to buy calls on the stock at $25.25 but we can really use the 25.25-24.00 zone as an entry point. If triggered our first target is $29.50. Our second target is $33.40. My time frame is four to eight weeks.

Suggested Options:
I'm suggesting the August or September calls depending on your time frame. Our trigger is at $25.25.

BUY CALL AUG 25.00 JGM-HE open interest=4793 current ask $2.75
BUY CALL AUG 30.00  LM-HF open interest=2248 current ask .40

BUY CALL SEP 25.00 JGM-IE open interest=  60 current ask $3.30
BUY CALL SEP 27.00  LM-IU open interest= 239 current ask $2.05
BUY CALL SEP 30.00  LM-IF open interest=  82 current ask .80

Annotated Chart:

Picked on     July xx at $ xx.xx <-- see TRIGGER
Change since picked:      + 0.00
Earnings Date           07/20/09 (confirmed)
Average Daily Volume =       3.4 million  
Listed on  July 25, 2009