These big cap names will attract lots of interest if the market can keep the rally alive.


NEW DIRECTIONAL CALL PLAYS

Apple Inc. - AAPL - close: 210.65 change: +2.93 stop: 203.99

Why We Like It:
Bulls poured into AAPL once the selling stalled at $204 this morning. The big intraday rebound looks like a short-term bullish reversal. Volume was above average on the move, which is a positive sign. I think AAPL could rally into its earnings report, which is coming up quick on January 25th. We will plan to exit ahead of the announcement.

I'm suggesting bullish positions now. You might want to wait for a little more confirmation with a move over $213, the January 11th high. As you can tell from AAPL's performance today the stock can be volatile. I consider this an aggressive trade. I would use very small positions (1/4 to 1/2 your normal trade). Our first target to exit is $219.50. Our second target is $224.50.

Suggested Options:
I'm suggesting the February calls but we'll exit ahead of earnings on January 25th. My preference is the $220 strike.

BUY CALL FEB 220 AJL-BX open interest=32,265 current ask $6.50

Annotated Chart:

Entry  on   January 13 at $210.65 
Change since picked:       + 0.00
Earnings Date            01/25/10 (confirmed)
Average Daily Volume =       17.1 million  
Listed on   January 13, 2010         


Goldman Sachs - GS - close: 169.07 change: +1.25 stop: 164.95

Why We Like It:
After a one-week correction shares of GS look like they've found a new trading bottom near $166. I believe shares are poised to rally into their earnings report, which is coming up on January 21st. We will plan to exit ahead of the report, which makes this a short-term trade. Buy calls now. Use a stop loss under today's low. I'm suggesting a stop at $164.95. Our first target to take profits is at $174.90. Our second target is $179.00.

Suggested Options:
I am suggesting the February calls but we'll exit ahead of earnings. I would use the $170 or $175 strike but my preference is for the $175s.

BUY CALL FEB 175 GPY-BO open interest=8918 current ask $4.25

Annotated Chart:

Entry  on   January 13 at $169.07 
Change since picked:       + 0.00
Earnings Date            01/21/10 (unconfirmed) 
Average Daily Volume =        7.1 million  
Listed on   January 13, 2010