Editor's Note:

In addition to tonight's new play, readers may want to check out KALU. I was prepared to write up a call play but noticed that the stock's volume was very low and KALU is due to report earnings on Feb. 21st.

Some of the railroad stocks like CP and KSU caught my eye. I also like CLF and was ready to buy calls on it but the company reported earnings after the closing bell tonight so we need to wait for the dust to clear.

- James


NEW DIRECTIONAL CALL PLAYS

Peabody Energy Corp. - BTU - close: 66.23 change: +0.86

Stop Loss: 61.75
Target(s): 69.75, 74.00
Current Option Gain/Loss: + 0.0%, and + 0.0%
Time Frame: 6 to 8 weeks
New Positions: Yes

Company Description

Why We Like It:
We are going to hop on the resource bandwagon. BTU is one of the largest coal miners in the world. Shares just broke out over resistance near $65.00 after two months of consolidating sideways. I am suggesting bullish positions now. Our first exit target is $69.75.

The Point & Figure chart for BTU is bullish with an $80 target.

Open bullish positions now at current levels

- Suggested Positions -

Buy the March $70 calls (BTU1119C70) current ask $1.08

- or -

Buy the June $70 calls (BTU1118F70) current ask $3.60

Annotated Chart:

Entry on February 17th at $ xx.xx
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on February 16th, 2010