NEW DIRECTIONAL CALL PLAYS

Capella Education - CPLA - close: 67.80 change: +0.78 stop: 62.40

Why We Like It:
This education stock is showing relative strength. Instead of sliding lower with the market's correction CPLA is breaking out over major resistance near $65.00. This broken resistance should be new support. I am suggesting readers buy calls on a dip at $65.25. If triggered our first target is $69.75. Our secondary target is $74.00 but we'll exit ahead of the late October earnings report. FYI: The Point & Figure chart is bullish with an $82 target.

Trading note: CPLA doesn't have a lot of volume and neither do the options. I would keep positions small.

Suggested Options:
I would use the November or December calls. My preference is the November $65 strike.

BUY CALL NOV 65.00 CQX-KM open interest= 30  current ask $5.50

Annotated Chart:

Picked on   October xx at $ xx.xx <-- TRIGGER $65.25
Change since picked:       + 0.00
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        145 thousand 
Listed on   October 03, 2009         


NEW DIRECTIONAL PUT PLAYS

Amazon.com - AMZN - close: 89.85 chg: -1.19 stop: 93.25

Why We Like It:
This is an aggressive trade. AMZN can be a volatile stock. The close under $90.00 is bearish and it follows a double top near $94-95. Short-term technicals are bearish. I'm suggesting put positions now. We'll exit on a dip at $85.25.

Suggested Options:
This should be a quick short-term move so I'm suggesting the October puts. My preference is the $90 strike.

BUY PUT OCT 90.00 QZN-VR open interest=24716 current ask $2.98

Annotated Chart:

Picked on   October 03 at $ 89.85
Change since picked:       + 0.00
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        6.2 million  
Listed on   October 03, 2009         


BIOGEN IDEC - BIIB - close: 48.89 change: -0.45 stop: 52.15

Why We Like It:
After a four-week consolidation in the $50-52 zone shares of BIIB are breaking down. The recent failed rally near $52.00 is another lower high in its long-term trend of lower highs and the breakdown under support near $50 and its 200-dma is forecasting another leg lower. What makes this play unusual is that I'm suggesting readers actually hold put positions over BIIB earnings report. Normally we exit positions ahead of earnings but this time we're going to hold over earnings.

Our first target to take profits is at $44.50. Our second target is $40.50. FYI: The P&F chart is bearish with a $36 target.

Suggested Options:
I'm suggesting the November puts. My preference are the $45 strikes.

BUY PUT NOV 45.00 IDK-WI open interest=3069 current ask $1.05

Annotated Chart:

Picked on   October 03 at $ 48.89
Change since picked:       + 0.00
Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        2.6 million  
Listed on   October 03, 2009