Editor's Note:

If you are the gambling type then take a look at Netflix (NFLX). What are the odds that this high-flying stock reverses at resistance near $250, forming a perfect bearish double top pattern? If you are willing to roll the dice you could buy some speculative puts here.

- James


NEW DIRECTIONAL CALL PLAYS

Fortune Brands - FO - close: 63.43 change: +0.71

Stop Loss: 61.75
Target(s): 67.50, 69.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
FO is a conglomerate of consumer goods from home furnishings to golf products to liquor. The lack of weakness in this stock would suggest that investors are not concerned about the high price of oil and fuel's impact on consumers or what rising inflation and commodity prices might do to FO's margins. FO has been consolidating sideways in the $60-63.50 trading range for four months. Now it is on the verge of a bullish breakout.

Aggressive traders may want to buy a move over $63.50. I am suggesting a trigger to buy calls at $64.00. If triggered our targets are $67.50 and $69.75. I would aim higher but we do want to exit ahead of the late April earnings report.

FYI: A move past $64.00 would create a brand new quadruple top breakout buy signal.

Trigger @ $64.00

- Suggested Positions -

Buy the May $65.00 call (FO1121E65) current ask $1.25

Annotated Chart:

Entry on April xxth at $ xx.xx
Earnings Date 04/28/11 (unconfirmed)
Average Daily Volume = 973 thousand
Listed on April 5th, 2011


SPDR Gold ETF - GLD - close: 142.05 change: +2.21

Stop Loss: 137.00
Target(s): 149.50, 154.50
Current Option Gain/Loss: + 0.0%
Time Frame: 6 to 12 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Investors are using gold as a hedge against just about everything. If you consumer any financial media you've probably heard pundits talking about gold and silver as a hedge against inflation, against a weak dollar, against rising interest rates, etc. There seems to be a growing consensus that silver is the stronger performer than gold (and it has been) but silver looks very extended here. Meanwhile gold has been consolidating sideways near the $1,400 an ounce level for weeks. Today's breakout past this resistance to new highs looks like a bullish entry point.

I am suggesting we buy calls in the GLD gold ETF now. If you want you could wait for a dip back toward the $141-140 area. We'll start this trade with a stop loss at $137.00. Our targets are $149.50 and $154.50 within the next six to twelve weeks.

FYI: The Point & Figure chart for GLD is bullish with a $172 target.

- Suggested Positions -

Buy the May $145 call (GLD1121E145) current ask $1.80

- or -

Buy the June $150 call (GLD1118F150) current ask $1.32

Annotated Chart:

Entry on April 6th at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 12.5 million
Listed on April 5th, 2011