NEW DIRECTIONAL CALL PLAYS

Baker Hughes - BHI - close: 71.23 change; +0.62

Stop Loss: 67.95
Target(s): 76.50, 79.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Company Description

Why We Like It:
I have mentioned BHI as a stock on my radar screen more than once this year. Shares are currently consolidating sideways under resistance at the $72.00 level. A breakout past $72 should be a new buy signal and could herald a move toward the $90 area (given enough time). I am suggesting that we use a trigger to buy calls on BHI at $72.25. If triggered our first target is $76.50. Our second target is $79.75. More aggressive traders could aim higher. FYI: If BHI can breakout past the $72.00 level it would create a new quadruple top breakout buy signal on its Point & Figure chart.

Trigger @ 72.25

- Suggested Positions -

Buy the April $75 calls (BHI1116D75) current ask $0.89

- or -

Buy the May $75 calls (BHI1121E75) current ask $2.31

Annotated Chart:

Entry on March xxth at $ xx.xx
Earnings Date 05/03/11 (unconfirmed)
Average Daily Volume = 4.6 million
Listed on March 23rd, 2011