NEW DIRECTIONAL CALL PLAYS

VMW - VMWare - $50.30

Company Description:

VMware, Inc. is a provider of virtualization solutions from the desktop to the data center. The Company’s suite of virtualization solutions addresses a range of information technology (IT) problems that include cost and operational inefficiencies, business continuity, software lifecycle management and desktop management. It works closely with over 900 technology partners, including server, microprocessor, storage, networking and software vendors. In November 2008, VMware, Inc. bought Trango Virtual Processors, which specializes in virtualization software for mobile phones, which allows a single phone to run multiple operating systems. In September 2009, the Company announced the completion of its acquisition of SpringSource, an enterprise and web application development and management. In February 2010, the Company acquired Zimbra, the vendor of open source email and collaboration software, from Yahoo! Inc.

Why We Like It:
VM Ware is taking over computing. The rush to virtualize to obtain maximum use of all your servers is revolutionizing the data center. IDC believes only 20% of datacenters are fully converted leaving a whopping 80% as a growing market. As corporations enter the Windows 7 upgrade cycle they will be building out their server farms with the newer software to support all those Windows 7 desktops and that means large numbers of virtualized servers. VMW does not own the market and there are other competitors but they are the strongest and the lead dog in the harness. For those competitors following in their tracks the view is always the same.

VMW posted a decent gain on Monday but did not spike out of the market. I am hoping there will be a minor retracement in the Nasdaq and we can buy this a little cheaper. I am putting a $49.50 trigger on entering this trade.

Suggested Options:
I am recommending the July $55 Calls because VMW has just edged over $50 and even if we buy it on a dip the premiums are going to be high for the $50 options.

BUY CALL JUL 55.00 (VMW 10G55) open interest= 198     current ask $2.70

90 Min Chart:

Daily Chart:

Entry  on  March 2nd at $ xx.xx <-- TRIGGER @ $49.50
Change since picked:       + 0.00
Earnings Date            04/26/10 (unconfirmed)
Average Daily Volume =       1.75    million  
Listed on  March 1st, 2010