NEW DIRECTIONAL CALL PLAYS

Baxter Intl. - BAX - close: 60.80 change: -0.64 stop: 59.80

Why We Like It:
Profit taking in BAX today was pretty mild. Traders bought the dip near $60.00 for the second day in a row. The intraday bounce from support near $60.00 looks like a bullish entry point for a short-term trade. Our time frame is short because BAX is due to report earnings on January 28th and we will plan to exit ahead of the report.

I'm suggesting small call positions now with a tight stop at $59.80. More aggressive traders will want to consider a stop under $59.00. Our target is $64.75.

Suggested Options:
I am suggesting the February $60 or $65 calls.

BUY CALL FEB 60.00 BAX-BL open interest=5228 current ask $2.05
BUY CALL FEB 65.00 BAX-BM open interest=8238 current ask $0.35

Annotated Chart:

Entry  on   January 20 at $ 60.80 
Change since picked:       + 0.00
Earnings Date            01/28/10 (confirmed)
Average Daily Volume =        3.4 million  
Listed on   January 20, 2010         


3M Co. - MMM - close: 84.72 change: -0.40 stop: 83.40

Why We Like It:
Shares of Dow-component MMM held up reasonably well on Wednesday. Traders bought the dip near its rising 10-dma and MMM pared its losses to just 40 cents. The trend is up and I suspect that MMM will make a pre-earnings run. This is going to be a short-term trade and we will plan to exit ahead of the January 28th earnings report.

I'm suggesting a trigger to buy small call positions at $85.25. If triggered our target is $$89.50.

Suggested Options:
I am suggesting the February $85 calls.

BUY CALL FEB 85.00 MNZ-BQ open interest=3557 current ask $1.80

Annotated Chart:

Entry  on   January xx at $ xx.xx <-- TRIGGER @ 85.25
Change since picked:       + 0.00
Earnings Date            01/28/10 (confirmed)
Average Daily Volume =        3.1 million  
Listed on   January 20, 2010