NEW DIRECTIONAL CALL PLAYS

Praxair Inc. - PX - close: 105.84 change: +0.82

Stop Loss: 102.95
Target(s): 109.75, 112.25
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
PX is in the basic materials sector. Shares have spent the last four weeks consolidating sideways between $102 and 105.50 with help from the rising 50-dma. I am suggesting we buy calls on today's afternoon bounce. We'll use a stop loss at $102.95, just under the 50-dma. The late April high of $108.45 is probably overhead resistance but I'm setting our first target at $109.75.

- Suggested Positions -

buy the June $105 call (PX1118F105) current ask $1.80

- or -

buy the July $110 call (PX1116G110) current ask $0.85

Annotated Chart:

Entry on June 1st at $ xx.xx
Earnings Date 07/27/11 (unconfirmed)
Average Daily Volume = 1.3 million
Listed on May 31st, 2011


Sherwin-Williams Co. - SHW - close: 87.84 change: +2.09

Stop Loss: 84.90
Target(s): 92.25. 97.50
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
We had tried playing SHW a couple of weeks ago but shares never hit our trigger to buy calls. Then I listed SHW this past weekend as a stock to watch as a potential bullish candidate. Today's market rally was enough to fuel a bullish breakout in SHW with the stock pushing past resistance near $87.00 and hitting new all-time highs.

I am suggesting call positions now with a stop loss at $84.90. More conservative traders may want to wait for a dip near $87.00 as their entry point. The $90.00 level might be round-number resistance but I'm expecting a rally toward the $95-100 area. We're setting our upside targets at $92.25 and $97.50.

- Suggested Positions -

Buy the June $90 call (SHW1118F90) current ask $0.55

- or -

Buy the July $90 call (SHW1116G90) current ask $1.35

Annotated Chart:

Entry on June 1st at $ xx.xx
Earnings Date 07/21/11 (unconfirmed)
Average Daily Volume = 911 thousand
Listed on May 31st, 2011