Editor's Note:

I am suggesting that readers trade carefully. The market has been really choppy with a lot of false signals. Even professional traders are having a hard time in this market.

If you're bullish on the financials I'd keep an eye on STT as a potential candidate. If the oil stocks keep rising APC might be a bullish candidate on a breakout over $52.50. Meanwhile if Siemens (SI) breaks $78.00 it might be a bearish candidate.


NEW DIRECTIONAL CALL PLAYS

FISERV Inc. - FISV - close: 48.05 change: +0.60 stop: 46.60

Why We Like It:
FISV is a business software and services company. Shares have been consolidating sideways with a bearish trend of lower highs for three weeks now. The consolidation met support at its 50-dma and the $47.00 level recently. Today's move is a bullish engulfing (reversal) pattern. I'm suggesting we look for some follow through and buy calls on the breakout.

Use a trigger at $48.60. Our first target to take profit is at $52.50.

Suggested Options:
My time frame is only a few weeks so I'm suggesting the September calls.

BUY CALL SEP 50.00 FQV-IJ open interest=1304 current ask .65

Annotated Chart:

Picked on   August xx at $ xx.xx <-- TRIGGER @ 48.60
Change since picked:      + 0.00
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       1.5 million  
Listed on August 19, 2009         


NEW DIRECTIONAL PUT PLAYS

iShares Transports - IYT - close: 65.40 change: +0.15 stop: 66.75

Why We Like It:
I am doubtful of the bounce in stocks this week. The rebound looks like just enough to fill the gap from Monday and test new resistance. I'm suggesting puts on the IYT with a tight stop at $66.75. More aggressive traders can place their stop above resistance at $68.00 instead. We'll take some money off the table at $62.00 (1st target) and exit completely at $60.25 (2nd target).

Suggested Options:
My time frame is only two or three weeks (if not sooner). I'm suggesting the September puts.

BUY PUT SEP 00.00 ___-__ open interest=     current ask .00

Annotated Chart:

Picked on   August 19 at $ 65.40
Change since picked:      + 0.00
Earnings Date           00/00/00
Average Daily Volume =       772 thousand 
Listed on August 19, 2009