NEW DIRECTIONAL CALL PLAYS
L-3 Communications - LLL - close: 86.80 change: +1.17 stop: 83.90
Why We Like It:
One of the big stories over the Christmas holiday was an alleged terrorist trying to blow up a plane heading into the U.S. This produced some strength in defense stocks today. LLL is a big defense contractor and shares broke out from their sideways consolidation. I'm suggesting very small bullish positions now on today's rally. We should consider this an aggressive, higher-risk trade. Our first target to take profits is at $89.95. Our second and final target is $94.00. We want to exit ahead of the late January earnings report. FYI: The Point & Figure chart is bullish with a $104 target.
I'm suggesting either the January $90 calls or the February $90 calls. January options expire in three weeks.
BUY CALL JAN 90.00 LLL-AR open interest=4549 current ask $0.55
BUY CALL FEB 90.00 LLL-BR open interest= 264 current ask $1.75
Entry on December 28 at $ 86.80
Change since picked: + 0.00
Earnings Date 01/28/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on December 26, 2009