Editor's Note:

Yesterday I mentioned NKE and BHP as potential bullish candidates. NKE is being added to the newsletter tonight. Be careful with BHP. It looks like they report earnings on Feb. 15th and naturally I would not want to hold over the report.

- James


NEW DIRECTIONAL CALL PLAYS

Nike Inc. - NKE - close: 87.25 change: +0.54

Stop Loss: 83.85
Target(s): 88.00, 89.90
Current Option Gain/Loss: Unopened
Time Frame: 4 to 8 weeks
New Positions: Yes, see Trigger

Company Description

Why We Like It:
NKE is finally recovering from its post-earnings depression. The stock was depressed for several weeks and suffered a -12% correction before finally reversing a couple of weeks ago. The stock has now broken out above resistance in the $84-85 zone and its 50-dma. We don't want to chase it here.

I am suggesting we buy calls on a dip at $85.25. If triggered we'll use a stop loss at $83.85. Our targets are $88.00 and $89.90.

Trigger @ $85.25

- Suggested Positions -

Buy the March $85 calls (NKE1119C85) current ask $3.70

- or -

Buy the April $90 calls (NKE1116D90) current ask $1.76

Annotated Chart:

Entry on February xxth at $ xx.xx
Earnings Date 03/17/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on February 9th, 2010