NEW DIRECTIONAL CALL PLAYS

Visa, Inc. - V - close 73.24 change -0.08 stop 67.40

Target(s): 74.90, 76.90, 79.40
Key Support/Resistance Areas: 79.80, 77.50, 75.00, 70.50, 68.00
Time Frame: 3 to 5 weeks

Company Description:
Visa Inc. (Visa) operates the retail electronic payments network and manages a global payments brand. It facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities. Visa provides financial institutions with product platforms encompassing consumer credit, debit, prepaid and commercial payments.

Why We Like it:
V was taken out to the woodshed after FinReg and a Department of Justice anti-trust suit. The company, along with MasterCard, announced a non-monetary settlement has been made with the DOJ today which puts this issue behind them. There has been many analysts/brokerages defend the stock in recent weeks and I think V is on the verge of running higher into the company's earnings report on 10/27. Technically, the stock has made a higher high and closed above its 50-day and rising 20-day SMA. I would like to see V pullback a little more with the broader market and use $71.80 as our trigger to enter long positions. If triggered, our first two targets are estimated to produce +80% and +130% gains. This is a good addition to our model portfolio and will also provide more balance as we are currently firmly biased to the short side.

Suggested Position: Buy November $75.00 CALL, current ask $2.18, estimated ask at entry $1.60

Annotated chart:

Entry on October XX
Earnings 10/27/2010 (unconfirmed)
Average Daily Volume: 6.8 million
Listed on October 4, 2010