NEW DIRECTIONAL CALL PLAYS
Intl. Business Mach. - IBM - close: 130.57 change: +0.57 stop: 126.90
Why We Like It:
I have mentioned IBM as a bullish candidate in previous editor's notes. On Thursday the stock broke through resistance at the $130.00 level. This looks like a new bullish entry point to buy calls. However, the July 2008 high was $130.93. I want to see IBM trade over this level before initiating positions. Thus I'm suggesting a trigger to buy calls at $131.55. Our first target is $134.95. Our second target is $139.00. Our time frame is about four weeks. We do not want to hold over IBM's earnings report.
Traders can choose to use the January or February calls. Keep in mind that January options expire after the 18th and IBM will probably report earnings around the 19th or 20th so January option should work for us. I'm suggesting the January $135 calls.
BUY CALL JAN 135 IBM-AG open interest=19,805 current ask $0.49
Entry on December xx at $ xx.xx <-- TRIGGER @ 131.55
Change since picked: + 0.00
Earnings Date 01/19/10 (unconfirmed)
Average Daily Volume = 5.8 million
Listed on December 26, 2009