NEW DIRECTIONAL CALL PLAYS

Goldman Sachs - GS - close: 134.99 change: -4.35

Stop Loss: 128.45
Target(s): 134.00, 137.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
Adventurous traders only need apply! We are going to try and catch the falling knife that is GS' stock price. There are plenty of investors and analysts that are worried about the U.S. government Department of Justice investigation into Goldman. While this remains a very dark cloud over the stock I would still expect a bounce from support. Naturally trying to catch falling knives is a dangerous game. Bear that in mind as you consider this trade.

GS found support near $130 back in July 2010. The intraday low was $129.50. I am suggesting we buy calls on a dip at $130.25 with a stop loss at $128.45. If triggered our targets are $134.00 and $137.50. Hopefully this will be a quick in and out kind of trade. Very small positions only!

Trigger @ 130.25 (very small positions)

- Suggested Positions -

buy the June $135 call (GS1118F135) current ask $4.00 (they should be around $2 at our entry point)

Annotated Chart:

Entry on May xxth at $ xx.xx
Earnings Date 07/19/11 (unconfirmed)
Average Daily Volume = 6.5 million
Listed on May 21st, 2011


NEW DIRECTIONAL PUT PLAYS

Roper Industries - ROP - close: 83.38 change: +0.00

Stop Loss: 84.05
Target(s): 78.00, 75.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
The rally in this technology stock has run out of steam. ROP has formed a triple top over the last few months. Now the stock has broken at least one trend of higher lows. Shares are precariously perched on their 100-dma. A breakdown here could lead to a drop toward the simple 200-dma. Nimble traders could try and open positions on a failed rally near $85 and its 50-dma. I am suggesting a trigger to buy puts on a breakdown at $81.75. If triggered our targets are $78.00 and $75.50. The $80 level might offer a little support so don't be surprised to see a bounce. I would keep our position size small to limit our risk. Currently the Point & Figure chart is bearish with a $75 target.

Trigger @ 81.75 (small positions)

- Suggested Positions -

Buy the June $80 PUT (ROP1118R80) current ask $0.85

Annotated Chart:

Entry on May xxth at $ xx.xx
Earnings Date 07/26/11 (unconfirmed)
Average Daily Volume = 570 thousand
Listed on May 21st, 2011