Editor's Note:

Fears over a potential meltdown at one or more of Japan's nuclear energy plants sparked a global sell-off on Tuesday morning. Yet by the closing bell stocks were well off their lows. The Japanese stock market had fallen more than -15% in the last two days. The sell-off got so bad that eventually traders thought it was overdone and started buying anything Japanese expecting a bounce back. I am listing some of the Japanese ETFs and high-profile Japanese names below but they have all seen a significant bounce off their intraday lows today. Now the Japanese NIKKEI index is already up +6% during Wednesday's session. If Japan's market can hold these gains then all of these Japanese ETFs and stocks will likely gap open higher tomorrow morning.

Japanese ETFs: EWJ, SCJ, JPP, JSC, ITF, EZF (double long), EWV (double short). Note that some of these ETFs do not have options. Almost none of them had any volume until the last couple of days.

High-profile Japanese companies: CAJ, HMC, HIT, SNE, and TM.

In addition to tonight's new candidates these stocks caught my eye and might offer some opportunity: WFMI, DE, MON, BHI, INTU, CHKP, and TEVA.

- James


NEW DIRECTIONAL CALL PLAYS

Capital One Financial - COF - close: 51.10 change: +1.64

Stop Loss: 47.75
Target(s): 54.75, 59.00
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
COF has been somewhat resistant to the market's recent weakness. Shares have been consolidating sideways in the $48-50 zone the last several days. Traders bought the dip at support this morning and COF exploded higher. The rally was fueled by news from the company that the number of bad, uncollectable accounts (charge offs) were going down and have been falling for three months in a row.

We can use the breakout over resistance at $50.00 as a bullish entry point. If you don't want to chase it here you can wait for a potential dip near $50.00 again. I am suggesting bullish positions now. Our targets are $54.75 and $59.00.

- Suggested Positions -

Buy the April $50 call (COF1116D50) current ask $2.72

- or -

Buy the April $55 call (COF1116D55) current ask $0.68

Annotated Chart:

Entry on March 16th at $ xx.xx
Earnings Date 04/21/11 (unconfirmed)
Average Daily Volume = 4.4 million
Listed on March 15th, 2010


F5 Networks - FFIV - close: 110.67 change: +1.70

Stop Loss: 107.75
Target(s): 119.75, 124.50
Current Option Gain/Loss: Unopened
Time Frame: 4 to 5 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
If you believe the market will continue to bounce off today's lows then this could be a tradable bottom in FFIV. Shares have bounced twice from support near $105.00 in the last two weeks. This time FFIV is also bouncing from technical support at its simple 200-dma. Aggressive traders could buy calls now. I want to see a little confirmation first. I am suggesting a trigger to buy calls at $112.75. If triggered we'll use a stop loss at $107.75. There is potential resistance at the 50 and 100-dma. We'll set our targets at $119.75 and $124.50. I would consider this an aggressive, higher-risk trade because FFIV can be so volatile. Keep your position size small.

Buy calls with a Trigger @ $112.75 (small positions)

- Suggested Positions -

Buy the April $115 call (FFIV1116D115) current ask $4.60

- or -

Buy the April $120 call (FFIV1116D120) current ask $2.80

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 04/20/11 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on March 15th, 2010