NEW DIRECTIONAL CALL PLAYS

Amazon.com - AMZN - close: 206.07 change: +1.69

Stop Loss: 198.00
Target(s): 213.50, 219.75
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
If shares of AMZN look a bit overextended it's because they probably are. The stock managed to alleviate some of its overbought condition with the sideways consolidation last week. Aside from Tuesday's pop higher most of this week has been sideways too. Yet AMZN is still creeping higher. Traders bought the dip at short-term support near the rising 10-dma and near round-number support at the $200 level this morning. There doesn't seem to be anything stopping it now with AMZN closing at new all-time highs.

I consider this an aggressive, higher-risk trade because AMZN can be a volatile stock at times. We'll try and limit our risk with small positions and a stop loss under $200. Our upside targets are $2013.50 and $219.75. FYI: The Point & Figure chart for AMZN is bullish with a $242 target.

- Suggested (SMALL) Positions -

Buy the June $215 call (AMZN1118F215) current ask $3.75

Annotated Chart:

Entry on May 13th at $ xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 6.4 million
Listed on May 12th, 2011


Alexion Pharma. - ALXN - close: 100.87 change: +2.01

Stop Loss: 95.75
Target(s): 104.85, 109.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Alexion Pharmaceuticals is on the rise again. The stock found support in the $93-94 area again and shares are seeing a strong rebound. ALXN has broken the bearish trend of lower highs and closed above round-number resistance at $100.00. My only complaint would be the lack of volume on this rally.

I am suggesting bullish positions now with a stop loss at $95.75. The $105 level is overhead resistance so we'll set our first target at $104.85. Our second, more aggressive target is $109.00. However, we may choose to exit prior to the 2-for-1 split.

FYI: ALXN has a 2-for-1 split payable on May 20th. Shares will begin trading post split on May 21st.

- Suggested Positions -

buy the June $105 call (ALXN1118F105) current ask $2.20

Annotated Chart:

Entry on May 13th at $ xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 832 thousand
Listed on May 12th, 2011