NEW DIRECTIONAL CALL PLAYS

Cognizant Technology Solutions - CTSH - close: 75.51 change: +0.50

Stop Loss: 73.90
Target(s): 79.90, 83.50
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
The market continues to march higher no matter what the news. The NASDAQ continues to outpace the S&P 500. I'm very cautious but still optimistic here and want to focus on the tech sector tonight. CTSH just rallied toward the top of its trading range near $76.50. I am suggesting a trigger to buy calls at $76.65. If triggered we'll use a stop loss at $73.90. This is an aggressive play and likely to be a short-term trade that only last a few days. We do not want to hold over the early February earnings report.

If triggered at $76.65 our first target are $79.90. Keep your position very small to limit your risk. The Point & Figure chart for CTSH is bullish with a $105 target.

- Suggested Positions (very small positions only!) -

Trigger to open positions @ 76.65

Buy the 2011 February $75.00 call (CTSH1119B75) current ask $3.00

- or -

Buy the 2011 February $80.00 call (CTSH1119B80) current ask $1.00

Annotated Chart:

Entry on January xxth at $ xx.xx
Earnings Date 02/09/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on January 18th, 2010