Editor's Note:

In addition to tonight's new candidates there are plenty of stocks fighting to be on my watch list. Several caught my eye this weekend but most of these need to see some sort of pull back before I would consider new bullish positions. On my watch list is: UPS, SRCL, MCK, SLB, MD, plus I would watch MCD for a breakout higher!

- James


NEW DIRECTIONAL CALL PLAYS

Oceaneering International - OII - close: 72.87 change: -0.37

Stop Loss: 66.90
Target(s): 74.80, 79.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
This past week has been very bullish for the oil services sector. The OSX index broke out from a nearly month long consolidation pattern and past significant resistance at the 230 level. This could herald a new leg higher for the industry. OII is a great way to trade this sector with the stock's recent breakout from its consolidation. I am suggesting we use a trigger at $70.55. We'll start the play with a stop loss at $66.90. Our first target is $74.80. Our final target is $79.75. More aggressive traders could aim for the all-time highs near $85.

Trigger to buy @ $70.25

Suggested Position: Buy the 2011 January $75 calls (OII1122A75) current ask $2.90

- or -

Suggested Position: Buy the 2011 April $75 calls (OII1116D75) current ask $6.00

Annotated Chart:

Entry on December xxth at $ xx.xx
Earnings Date 02/17/11 (unconfirmed)
Average Daily Volume = 584 thousand
Listed on December 4th, 2010


United Technology Corp. - UTX - close: 78.74 change: +0.04

Stop Loss: 73.90
Target(s): 81.50, 84.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Industrial names have been one of the strongest groups in the market. Investors are optimistic for the U.S. and global recovery to pick up speed next year. Shares of UTX have broken out over key resistance in the $77 area. I am suggesting readers wait for a dip back into the $77-76 zone for an entry point to buy calls. I'll set our trigger at $77.10. Cautious traders could wait for a pull back closer to $76 or even $75. We will begin the play with a stop loss at $73.90, just under the rising 50-dma. Our first target is $81.50. UTX's all-time high is $82.50.
FYI: The Point & Figure chart is bullish with a $91 target for UTX.

Trigger to buy calls @ $77.10

Suggested Position: Buy the 2011 January $80 calls (UTX1122A80) current ask $1.63

- or -

Suggested Position: Buy the 2011 February $80 calls (UTX1119B80) current ask $2.45

Annotated Chart:

Entry on December xxth at $ xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 3.2 million
Listed on December 4th, 2010