NEW DIRECTIONAL CALL PLAYS

Lockheed Martin Corp. - LMT - close: 70.37 change: +0.65

Stop Loss: 67.95
Target(s): 73.25
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes

Company Description

Why We Like It:
The defense stocks have not been a real hot spot in the market lately but that could change. Both the DFI and FDX indices look ready to breakout higher following a two-week consolidation. Meanwhile LMT is breaking out through the top of its five-week consolidation in the $68-70 range. I am suggesting new bullish positions now. We'll use a stop loss at $67.95. More conservative traders might be able to get away with a stop closer to $69.00. Our exit target is $73.25. Readers may want to keep their position size small to limit their risk.

Open Positions @ Current Levels

- Suggested Position -

Buy the 2011 January $70.00 calls (LMT1122A70) current ask $1.85

- or -

Buy the 2011 March $75.00 calls (LMT1119C75) current ask $1.05

Annotated Chart:

Entry on December 17th at $ xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume = 1.7 million
Listed on December 16th, 2010