NEW DIRECTIONAL CALL PLAYS

Rino International - RINO - close 12.38 change +0.84 stop 10.50

Company Description:
RINO International Corporation is engaged in the business of designing, manufacturing, installing and servicing wastewater treatment and flue gas desulphurization equipment for use in China's iron and steel industry, and anti-oxidation products and equipment designed for use in the manufacture of hot rolled steel plate products. The Company has three principal products and product lines: the Lamella Inclined Tube Settler Waste Water Treatment System, the Circulating, Fluidized Bed, Flue Gas Desulphurization System and the High Temperature Anti-Oxidation System for Hot Rolled Steel. The Company's sole business activities are acting as a holding company of its direct and indirect subsidiaries, Innomind Group Limited, RINO Investment (Dalian) Co., Ltd. (RINO Investment), Dalian RINO Heavy Industries Co., Ltd. (RINO Heavy Industries) and Dalian Innomind Environment Engineering Co., Ltd. (Dalian Innomind).

Target(s): 14.50, 15.95, 16.90
Key Support Areas: 11.75, 11.50, 11.20
Key Resistance Areas: 12.75, 13.75
Time Frame: Several weeks

Why We Like It:
RINO has taken out to the woodshed recently and I believe it due for a turnaround. The appears to have found support in the $10.75 area which dates back to prior support in August 2009 and prior resistance in June of 2008. The stock bounced nicely off of this yesterday and followed through nicely today gaining +7.28%. In addition, the stock trades at a ridiculously low PE ratio of about 5. I think there is a lot of room to for this stock to run and I suggest readers take advantage of the building momentum. I'm going to place an initial wide stop at $10.50 which is below the key support level, but it will be adjusted as the trade develops. I think we can make $2 in this trade but there could be some volatility so please use proper position to manage risk.

Suggested Position: July $12.50 CALL, current ask $1.45

Annotated Weekly Chart:

Entry on May xx
Earnings Date More than 2 months (unconfirmed)
Average Daily Volume: 926,000
Listed on May 26, 2010


NEW DIRECTIONAL PUT PLAYS

The Gymboree Corporation - GYMB - close 44.06 change -1.35 stop 46.60

Company Description:
The Gymboree Corporation is a specialty retailer operating stores selling apparel and accessories for children under the GYMBOREE, GYMBOREE OUTLET, JANIE AND JACK and Crazy 8 brands, as well as play programs for children under the GYMBOREE PLAY & MUSIC brand. The Company operates retail stores in the United States, Canada and Puerto Rico in regional shopping malls and in selected suburban and urban locations. As of January 30, 2010, the Company conducted its business through five divisions: Gymboree, Gymboree Outlet, Janie and Jack, Crazy 8, and Gymboree Play & Music. As of January 30, 2010, the Company operated a total of 953 retail stores, including 916 stores in the United States (593 Gymboree stores, 139 Gymboree Outlet stores, 119 Janie and Jack shops, and 65 Crazy 8 stores), 34 Gymboree stores in Canada, 2 Gymboree stores in Puerto Rico, and 1 Gymboree Outlet store in Puerto Rico. (source: company press release or website)

Target(s): 42.40, 40.25
Key Support Areas: 44.00, 43.60
Key Resistance Areas: 46.00, 46.30
Time Frame: 1 to 2 weeks

Why We Like It:
GYMB is forming a bearish pennant and I believe it will break lower. Retailers have been offering weak guidance for the remainder of 2010 and I think it is a matter of time before more selling starts. I would like to enter short positions if GYMB trades up near the $44.90 level. The pennant also provides a good reference point to place a protective stop at $44.60 which is above the 100-day SMA. GYMB has also been finding resistance at its 200-day SMA. NOTE: the bid/ask spread on GYMB options is a little wide. Place a limit order between the two and you should get filled.

Suggested Position: July $45.00 PUT, current ask $3.60, estimated ask at entry $3.00.

Annotated chart:

Entry on May xx
Earnings More than 2 months (unconfirmed)
Average Daily Volume: 1.1 million
Listed on May 26, 2010