NEW DIRECTIONAL CALL PLAYS

NetApp, Inc. - NTAP - close: 58.28 change: +0.06

Stop Loss: 54.90
Target(s): 62.25, 64.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 5 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
I am growing more and more cautious on adding bullish candidates as we move deeper into January. If you have been reading the weekend market wraps then you know Jim is concerned we could see a market correction soon. Granted the market decline will probably be a great entry point but short-term it can be deadly for our short-term trades. I'm looking for stocks showing relative strength and NTAP is still inching higher and look poised to run. I'm suggesting bullish positions now at current levels but keep your position size very small. We might not be in this play very long. I'm starting this play with a stop loss at $54.90 but cautious traders might want to consider a stop loss closer to $56 instead. Our exit targets are $62.25 and $64.50.
The Point & Figure chart for NTAP is bullish with a $66 target.

Open Small Positions at Current Levels

- Suggested Positions -

Buy the 2011 February $60 calls (NTAP1119B60) current ask $2.15

Annotated Chart:

Entry on January 12th at $ xx.xx
Earnings Date 02/16/11 (unconfirmed)
Average Daily Volume = 3.8 million
Listed on January 11th, 2010