NEW DIRECTIONAL CALL PLAYS

F5 Networks - FFIV - close: 65.29 change: +3.15 stop: 61.40

Company Description:
F5 Networks is the global leader in Application Delivery Networking (ADN), focused on ensuring the secure, reliable, and fast delivery of applications. F5’s flexible architectural framework enables community-driven innovation that helps organizations enhance IT agility and dynamically deliver services that generate true business value. F5’s vision of unified application and data delivery offers customers an unprecedented level of choice in how they deploy ADN solutions. It redefines the management of application, server, storage, and network resources, streamlining application delivery and reducing costs. Global enterprise organizations, service and cloud providers, and Web 2.0 content providers trust F5 to keep their business moving forward (source: company press release or website)

Why We Like It:
Technology stocks were strong performers on Monday. The NWX networking index produced a bullish engulfing candlestick pattern and rallied toward the top of its trading range. The bullish reversal pattern still needs to see confirmation but if the sector breaks out from here it could begin a new leg higher. Shares of FFIV have a pattern similar to that of the sector index. The stock has been consolidating sideways the last few weeks. However, today's rally in FFIV did more than rally toward the top of its trading range. The stock broke out to new 52-week highs. I normally want to avoid chasing a big move like today's 5% rally in FFIV but if the market rally continues from here FFIV may not see a pull back any time soon. This is, without a doubt, a much more aggressive entry point. I would keep your positions very small. We'll use a stop loss under last week's low at $61.40. Our first target is $69.75.

Suggested Position: BUY CALL MAY $65.00 (FFIV 10E65.00) current ask $3.80

Annotated Chart:

Entry on April 6th at $ 65.29(?)
Earnings Date 04/21/10 (unconfirmed)
Average Daily Volume = 1.0 million
Listed on April 5th, 2010