NEW DIRECTIONAL CALL PLAYS

General Dynamic - GD - close: 62.19 change: -0.72 stop: 57.30

Why We Like It:
The defense stocks are rising toward new relative highs. GD is leading the way with a new 2009 high this morning. I suspect shares will dip back and retest the $60 level as support before moving much higher. Therefore I'm suggesting a trigger to buy calls at $60.20. We'll use a stop under the September low. Our first target is $64.90. Our second target is $69.00. Investors with a longer-term time frame may want to aim a lot higher. GD has produced an inverse H&S pattern that is forecasting an $85 target.

Suggested Options:
I am suggesting the October calls.

BUY CALL OCT 60.00 GD-JL open interest=1317 current ask $3.40 
BUY CALL OCT 65.00 GD-JM open interest=3300 current ask .95

Annotated Chart:

Picked on September xx at $ xx.xx <-- TRIGGER @ 60.20
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        2.3 million  
Listed on September 09, 2009