Editor's Note:
Good evening. The market is at a tough spot here and I believe it could go either way. I'm leaning towards a bounce back up into SPX 1,110. Tonight's new plays are designed to exploit the moves and I believe they have some potential. Please email me with any questions.


NEW DIRECTIONAL CALL PLAYS

Cameron International - CAM - close 37.94 change +1.05 stop 35.45

Company Description:
Cameron International Corporation (Cameron) is a provider of flow equipment products, systems and services to worldwide oil, gas and process industries. The Company’s operations are organized into three business segments: Drilling & Production Systems (DPS), Valves & Measurement (V&M) and Compression Systems (CS).

Target(s): 40.50, 42.00, 43.95
Key Support/Resistance Areas: 45.00, 42.50, 41.00, 38.75, 36.00
Time Frame: Several weeks

Why We Like It:
CAM was caught in the middle of the drama of the Gulf of Mexico oil spill. The stock has been beaten down because they built the blow out preventer (BOP) on the Horizon well. However, the BOP was heavily modified by RIG/BP so they don't really have any exposure to the damages. CAM is world's largest seller and manufacturer of BOP's so any new rules from the government means a lot of new business for Cameron. And the company recently reported over a $1 billion in new orders. I suggest we capitalize on the gaining momentum and initiate long positions now. Our stop is $35.45 which is below Thursday's low, and the 50-day SMA. At a minimum I'm looking for CAM to retest its recent swing high and possibly charge up to its 52-week highs if the broader market cooperates.

Suggested Position: Buy September $40.00 CALL, current ask is $1.05

Annotated Chart:

Entry on August xx
Earnings Date 11/3/2010 (unconfirmed)
Average Daily Volume: 4.6 million
Listed on August 14, 2010


FMC Technologies, Inc - FTI - close 61.97 change +0.89 stop 58.25

Company Description:
FMC Technologies, Inc. (FMC Technologies) is a global provider of technology solutions for the energy industry. The Company designs, manufactures and services systems and products, such as subsea production and processing systems, surface wellhead production systems, high-pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry.

Target(s): 65.25, 67.00
Key Support/Resistance Areas: 69.00, 65.50, 62.40, 59.00
Time Frame: Several weeks

Why We Like It:
This is another play on the Gulf oil spill as FTI stands to benefit from new regulations in underwater robotics. The company reported solid earnings results in July and this past week's dip is a buying opportunity. The stock is maintaining an upward trend line while the broader market has not, which is a sign of overall relative strength. I believe FTI should easily retest its recent swing high which is just above our first target of $65.25. Our more aggressive target is $67.00 but if the broader market is strong FTI could even make a run at its YTD highs. Our stop is $58.25 which is below the upward trend line and the 200-day and 50-day SMA's. I see some potential in this trade and am going to push the suggested option out to October, but that doesn't mean we can't take quick profits should FTI break higher soon.

Suggested Position: Buy October $70.00 CALL, current ask $1.30

Annotated chart:

Entry on August xx
Earnings 10/27/2010 (unconfirmed)
Average Daily Volume: 1.5 million
Listed on August 14, 2010


NEW DIRECTIONAL PUT PLAYS

Apple, Inc - AAPL - close 249.10 change -2.69 stop 267.50

Company Description:
Apple Inc. (Apple) designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players, and sells a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers.

Target(s): 240.00, 233.00, 226.00
Key Support/Resistance Areas: 21.50, 20.50, 19.80, 19.00, 18.50
Time Frame: Several weeks

Comments:
AAPL has been in a fuzzy cloud recently and I believe it looks vulnerable at these levels. Recent reports on smart phone market share point to the Android capturing 18% market share compared to Apple's 14%. Technically, AAPL had a daily and weekly close below its long term upward trend from its March 2009 lows for the first time this past week. I believe AAPL should test its 200-day SMA which is below our two most conservative targets. I also think this is a good hedge against some of our long positions in the model portfolio. I suggest we initiate short positions in AAPL on strength if it trades to $255 or on weakness at $245.95. This is a position that I suggest being quick to tighten stops and/or tale profits.

An alternative strategy readers may consider on a short AAPL position is to buy a PUT spread. For example, buy the September $230 PUTS (current ask $3.10) and sell the September $210 PUTS (current ask $1.03) to finance the cost. This is a well defined risk strategy where your max loss is $214 (the amount you paid for the spread) and your max gain is $1,786 if AAPL closes at $210 at expiration.

Suggested Position: Buy September $230.00 PUT, current ask $3.20

Annotated chart:

Entry on August xx
Earnings: 10/21/10 (unconfirmed)
Average Daily Volume: 23 million
Listed on August 14, 2010