NEW DIRECTIONAL CALL PLAYS

Schlumberger Limited - SLB - close: 83.50 change: +0.14

Stop Loss: 81.65
Target(s): 89.00
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
SLB is a large oil services company. The stock has been able to maintain its bullish trend. Shares look ready to breakout higher past resistance at $84.00. I am suggesting a trigger to buy calls at $84.25. If triggered our target is $89.00. Keep in mind that SLB is due to report earnings on January 21st. January calls expire on the 21st. I will list both January and February calls but normally we want to avoid holding over an earnings report.
FYI: The Point & Figure chart for SLB is very bullish with a $123 target.

Trigger @ $84.25

- Suggested Positions -

Buy the 2011 January $85 calls (SLB1122A85) current ask $1.69

- or -

Buy the 2011 February $90 calls (SLB1119B90) current ask $1.18

Annotated Chart:

Entry on January xxth at $ xx.xx
Earnings Date 01/21/11 (confirmed)
Average Daily Volume = 5.6 million
Listed on January 1st, 2010


SPX Corp. - SPW - close: 71.49 change: +0.67

Stop Loss: 69.95
Target(s): 76.50, 79.75
Current Option Gain/Loss: Unopened
Time Frame: 6 to 8 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
The $70.00 and $72.50 levels have been key resistance for this diversified machinery company. SPW has spent almost all of December consolidating sideways between the two levels. If shares can breakout higher it could pave the way for a run towards $80. I am suggesting a trigger to buy calls at $72.60. If triggered our first target is $76.50. Our longer-term target is $79.75.
FYI: The Point & Figure chart for SPW is very bullish with an $89 target.

NOTE: Just because the January calls are cheap, don't go overboard. We only have three weeks left before January options expire.

Trigger @ $72.60

- Suggested Positions -

Buy the 2011 January $75 calls (SPW1122A75) current ask $0.60

- or -

Buy the 2011 February $75 calls (SPW1119B75) current ask $1.45

Annotated Chart:

Entry on January xxth at $ xx.xx
Earnings Date 02/24/11 (unconfirmed)
Average Daily Volume = 346 thousand
Listed on January 1st, 2010