NEW DIRECTIONAL CALL PLAYS

Joy Global - JOYG - close: 95.24 change: +5.13

Stop Loss: 89.90
Target(s): 99.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 6 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
A bullish turnaround in the stock market combined with some stronger Chicago PMI numbers helped fuel a big gain for JOYG today. A falling U.S. dollar also makes commodities rise. While JOYG doesn't actually do any farming or mining the stock does tend to benefit when commodities rally (the company creates the necessary equipment for these industries).

Thursday's rally pushed JOYG up through resistance near $92.00-$92.50 and its simple 100-dma. Shares may have gone too far too fast with a six-day rally from $84 to $95. I am expecting pull back. Broken resistance should be new support. Therefore I am suggesting we launch small bullish call positions on a dip at $92.75 with a stop loss at $89.90. Our upside target is $99.50. More conservative traders could wait for a dip closer to $92.00 instead as their entry point.

Aggressive traders could use July calls, which expire in about two weeks. I am suggesting the August calls.

Trigger @ $92.75 (Small Positions)

- Suggested Positions -

(Aggressive Traders Only - These Expire in 2 Weeks)
Buy the July $95 call (JOYG1116G95) current ask $2.56

- or -

Buy the Aug $95 call (JOYG1120H95) current ask $5.00

Annotated Chart:

Entry on June xx at $ xx.xx
Earnings Date 08/31/11 (unconfirmed)
Average Daily Volume = 1.9 million
Listed on June 30, 2011