NEW DIRECTIONAL CALL PLAYS

United Parcel Service - UPS - close: 71.69 change: -0.11

Stop Loss: 66.85
Target(s): 74.75, 78.50
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The transportation sector broke out to new multi-year highs last week. UPS followed them higher with a move past resistance near $70.00. Now it looks like stocks are poised for a little profit taking. We want to buy calls on UPS when it dips back toward prior resistance and what should be support near $70. I'm suggesting a trigger to launch positions at $70.25. If triggered our first target is $74.75.

Trigger @ 70.25

Suggested Position:
Buy the 2011 January $70.00 call (UPS1122A70) current ask $2.90

- or -

Buy the 2011 April $75.00 call (UPS1116D75) current ask $1.68

Annotated Chart:

Entry on December xxth at $ xx.xx
Earnings Date 02/01/10 (unconfirmed)
Average Daily Volume = 3.9 million
Listed on December 6th, 2010