If the market can finally push through the top of its trading range stocks should launch into a new leg higher. We're going to be ready with these new candidates.


NEW DIRECTIONAL CALL PLAYS

Mosaic - MOS - close: 59.68 change: +0.58 stop: 57.95

Why We Like It:
A few of the fertilizer-related stocks are trading near their highs for the year and look poised to rally higher. MOS has been trading sideways in the $58-62 zone the last couple of weeks. Its Point & Figure chart is bullish with a $76 target. I am suggesting readers buy small call positions at $62.55. We want to see a breakout to a new high before launching positions. I'm suggesting small positions because stocks in this industry can be very volatile. This should be short-term trade. MOS is due to report earnings on January 5th. We do not want to hold over the report. If triggered at $62.55 our first target is $69.50.

Suggested Options:
I'm suggesting the January calls. If triggered use the January $65 strike. We want to exit before earnings.

BUY CALL JAN 65.00 MOS-AM open interest=17466 current ask $1.35

Annotated Chart:

Entry  on  December xx at $ xx.xx <-- TRIGGER @ 62.55
Change since picked:       + 0.00
Earnings Date            01/05/10 (unconfirmed)
Average Daily Volume =        5.8 million  
Listed on  December 16, 2009         


Stifel Financial - SF - close: 57.26 change: +1.25 stop: 54.95

Why We Like It:
SF set a new 2009 closing high on Wednesday. The stock looks like it's breaking out from a four-month trading range, which actually looks like an inverse H&S pattern. With the market poised to bleed higher SF could out perform the rest of the market. I want to see a little more confirmation so I'm suggesting a trigger to buy calls at $58.05. If triggered our first target is $64.50. Our time frame is January expiration. The P&F chart is bullish and points to a $70 target.

Suggested Options:
Earnings are expected in February. I'm suggesting the January calls but traders may want to use April calls instead. My preference is the January $60 strike.

BUY CALL JAN 60.00 SF-AL open interest= 821 current ask $0.60
 

Annotated Chart:

Entry  on  December xx at $ xx.xx <-- TRIGGER @ 58.05
Change since picked:       + 0.00
Earnings Date            02/11/10 (unconfirmed)
Average Daily Volume =        207 thousand 
Listed on  December 16, 2009