NEW DIRECTIONAL CALL PLAYS

Cognizant Technology Solutions - CTSH - close: 72.40 change: +1.99

Stop Loss: 68.49
Target(s): 74.50, 79.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Technology stocks continue to show relative strength. CTSH is a big cap tech company that has broken out to new all-time highs after consolidating sideways for two weeks in the $69-71 zone. Friday's rally was fueled by very strong volume. Aggressive traders may want to go ahead and buy calls now. Naturally I want to wait for a little dip. Broken resistance near $71.00 should be new short-term support. Let's use a trigger to buy calls at $71.50 and we'll initiate the play with a stop loss at $68.49 on the under side of its recent range. Our first target is $74.50. Our longer-term target is $79.00.
FYI: The Point & Figure chart for CTSH is forecasting a $93 price target.

Trigger to buy calls on the dip @ $71.50

- Suggested Positions -

Buy the 2011 January $75.00 calls (CTSH1122A75) current ask $1.10

- or -

Buy the 2011 April $75.00 calls (CTSH1116D75) current ask $3.70

Annotated Chart:

Entry on December xxth at $ xx.xx
Earnings Date 02/09/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on December 18th, 2010


Monsanto Co. - MON - close: 64.60 change: +1.60

Stop Loss: 59.89
Target(s): 67.25, 69.85
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
As investors look ahead into 2011 the commodity space continues to draw bullish buying interest. Shares of MON are breaking out from a two-month consolidation. Friday's rally to new eight-month highs was fueled by strong volume. Aggressive traders may want to consider new positions now. I am suggesting we wait for a dip and use a trigger to buy calls at $63.25. Cautious traders could wait and hope for a dip closer to $62 as their entry point. Thursday's low was $59.93 so I'm suggesting a stop loss at $59.89. If triggered our first target is $67.25. Our second target is $69.85.
FYI: The Point & Figure chart for MON just broke out past descending resistance and is forecasting a $74 price target.

Buy-the-dip Trigger @ 63.25

- Suggested Positions -

Buy the 2011 January $65.00 calls (MON1122A65) current ask $2.22

- or -

Buy the 2011 April $65.00 calls (MON1116D65) current ask $4.65

Annotated Chart:

Entry on December xxth at $ xx.xx
Earnings Date 01/06/11 (confirmed)
Average Daily Volume = 4.9 million
Listed on December 18th, 2010