NEW DIRECTIONAL CALL PLAYS

Caterpillar Inc. - CAT - close: 103.12 change: +2.72

Stop Loss: 99.00
Target(s): 109.00, 114.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Company Description

Why We Like It:
Investors are already thinking about who will benefit from the rebuilding boom that will happen along Japan's battered coastline. CAT continues to bubble up to the top of the list given the company's strong exposure to Asia. It is a likely reason why the stock hasn't sold off recently. Instead CAT seems to be building a bull-flag pattern.

I am suggesting we buy calls when CAT hits $104.00. If triggered we'll use a stop loss at $99.00. Our targets are $109.00 and $114.00.

Trigger @ 104.00

- Suggested Positions -

Buy the April $105 calls (CAT1116D105) current ask $2.95

- or -

Buy the May $110 calls (CAT1121E110) current ask $2.72

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 04/29/11 (unconfirmed)
Average Daily Volume = 7.4 million
Listed on March 17th, 2010


NEW DIRECTIONAL PUT PLAYS

Infosys Technologies - INFY - close: 65.23 change: +0.43

Stop Loss: 68.15
Target(s): 60.25, 57.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
I am not convinced the sell-off in stocks is over. You could easily argue the action in the major U.S. indices looks like nothing more than an oversold bounce. Tech stocks have definitely been underperforming. Shares of INFY broke down under key support near $66.00 and its 200-dma in the last few days. Today's bounce failed to reclaim these levels.

I am suggesting bearish positions now. However, traders should realize that the markets could remain very volatile with lots of big ups and downs. Therefore we want to keep our position in INFY pretty small to limit our risk. I'm suggesting a stop loss at $68.15. Our targets are $60.25 and $57.50. INFY looks like it might have support near $60.00 and the $57.00 levels.

FYI: More conservative traders could wait and use a trigger to buy puts on a move under the $64.00 level.

- Open Small Bearish Positions Now -

Buy the April $65 PUT (INFY1116P65) current ask $2.40

Annotated Chart:

Entry on March 18th at $ xx.xx
Earnings Date 04/15/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on March 17th, 2010