NEW DIRECTIONAL CALL PLAYS

Nu Skin Enterprises - NUS - close: 40.00 change: +0.29

Stop Loss: 38.25
Target(s): 44.00
Current Option Gain/Loss: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The market just suffered one of its worst weeks of the year. We are looking for stocks showing relative strength and ignoring the recent market weakness. NUS happens to be one of them. The stock has rallied to new highs near $40.00. I am suggesting bullish positions now. More conservative traders could wait for a rally past $40.00, which is arguably round-number resistance, and use a trigger at $40.25 to launch positions instead.

We'll start this trade with a stop loss at $38.25. Cautious traders could use a tighter stop but I would keep it under the simple 10-dma (currently near $39.00). Our target is the $44.00 mark but we will plan to exit ahead of the early August earnings report. FYI: The Point & Figure chart for NUS is bullish with a $62 target. Investors should note that the most recent data did list short interest at 14.4% of the 53.4 million-share float. That does provide some fuel for a short squeeze.

NOTE: We only want to launch new positions here if both the S&P 500 and NUS are positive at the open on Monday!

- Suggested Positions -

buy the AUG $40 call (NUS1120H40) current ask $2.15

Annotated Chart:

Entry on July 18 at $ xx.xx
Earnings Date 08/02/11 (confirmed)
Average Daily Volume = 700 thousand
Listed on July 16, 2011


Potash Corp. - POT - close: 59.20 change: +1.16

Stop Loss: 56.49
Target(s): 63.75, 68.00
Current Option Gain/Loss: + 0.0%
Time Frame: exit prior to July 28th
New Positions: Yes, see below

Company Description

Why We Like It:
POT is a major fertilizer company that sells primarily in North America. The stock has been relatively resistant to profit taking the last several days. Shares now look poised to make a run at its 2011 highs near $64. I am suggesting we buy calls now. More conservative traders could wait for a rally past potential resistance at $60.00 instead. Our first target is $63.75. Our second, more aggressive target is $68.00. Keep in mind that we have less than two weeks. POT is due to report earnings on July 28th. We do not want to hold over the announcement. Thus the $68 target will probably not get hit. FYI: The Point & Figure chart for POT is bullish with a $76 target.

NOTE: We only want to launch new positions here if both the S&P 500 and POT are positive at the open on Monday!

- Suggested Positions -

buy the AUG $60 call (POT1120H60) current ask $2.17

Annotated Chart:

Entry on July 18 at $ xx.xx
Earnings Date 07/28/11 (confirmed)
Average Daily Volume = 7.4 million
Listed on July 16, 2011


NEW DIRECTIONAL PUT PLAYS

FactSet Research - FDS - close: 94.99 change: -0.16

Stop Loss: 100.25
Target(s): 90.50, 86.00
Current Option Gain/Loss: + 0.0%
Time Frame: 4 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
FDS provides financial data to the investment community. Unfortunately anything related to financials seems to be struggling. This past week saw FDS breakdown under both its simple and exponential 200-dma and sink to new multi-month lows. You could argue FDS has produced a bearish head-and-shoulders pattern that is forecasting a drop into the $85-80 region. The Point & Figure chart for FDS is bearish with a $64 target.

FDS is oversold on a short-term basis. I am suggesting new put positions now but we want to keep our position size small. That way, if FDS does see a bounce, we might get a better entry point near $98 and its 200-dma and we can add to our positions. I'm suggesting a stop loss above $100. More conservative traders may want to use one closer to $98.00 instead. Our targets are $90.50 and $86.00 but the $90.00 level is support and FDS will probably see a bounce from this level.

- Suggested (SMALL) Positions -

buy the AUG $95 PUT (FDS1120T95) current ask $3.30

- or -

buy the SEP $90 PUT (FDS1117U90) current ask $2.30

Annotated Chart:

Entry on July 18 at $ xx.xx
Earnings Date 09/21/11 (unconfirmed)
Average Daily Volume = 363 thousand
Listed on July 16, 2011