NEW DIRECTIONAL CALL PLAYS

Caterpillar - CAT - close: 94.52 change: +0.81

Stop Loss: 92.25
Target(s): 99.80
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Investors love the industrial sector as they look ahead with optimistic eyes for 2011. CAT is currently trading near all-time highs under resistance at the $95.00 level. If shares can breakout past $95.00 it should be a quick run toward round-number, psychological resistance at $100.00.

I am suggesting a trigger to buy calls at $95.15. If triggered our exit target is $99.80. More aggressive traders could try the January calls instead.
The Point & Figure chart for CAT is bullish with a $118 target.

Trigger @ 95.15

- Suggested Positions -

Buy the 2011 February $100 calls (CAT1119B100) current ask $1.31

Annotated Chart:

Entry on January xxth at $ xx.xx
Earnings Date 01/27/11 (unconfirmed)
Average Daily Volume = 4.2 million
Listed on January 5th, 2010


Research In Motion - RIMM - close: 61.92 change: +2.82

Stop Loss: 57.49
Target(s): 64.75, 67.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
RIMM was a strong outperformer today with a bullish breakout over resistance at the $60.00 mark. The stock has been consolidating the last few days near its rising 50-dma. Speaking of the 50-dma, its cross up and over above the 200-dma is normally a bullish signal. I don't want to chase today's move in RIMM. Wait for a dip. I am suggesting a trigger at $61.00. We'll use a stop loss at $57.49. More conservative traders could use a stop closer to $59.00 instead. There is some short-term resistance at $64.00 but I'm setting our first target at $64.75.

Trigger @61.00

- Suggested Positions -

Buy the 2011 February $62.50 calls (RIMM1119B62.5) current ask $2.87

- or -

Buy the 2011 March $65.00 calls (RIMM1119C65) current as $2.69

Annotated Chart:

Entry on January xxth at $ xx.xx
Earnings Date 03/31/11 (unconfirmed)
Average Daily Volume = 9.9 million
Listed on January 5th, 2010