NEW DIRECTIONAL CALL PLAYS

Teradata Corp. - TDC - close: 56.00 change: +0.85

Stop Loss: n/a
Target(s): 62.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
This is a simple momentum trade. TDC is rebounding sharply from support near $50 and its rising 200-dma. Shares have cleared potential resistance near $54 and its 100-dma. Now shares are at $56.00 and look poised to rally past the 50-dma. The high in July was $62.71 and if TDC can rally past resistance at $56 and $58 it could make another run at its high.

I would consider this somewhat aggressive. You could argue the 50-dma is now overhead resistance. Plus, TDC is up over +10% from its recent lows. Of course a lot of stocks are up big off their lows from last week. I am suggesting we open call positions tomorrow if both TDC and the S&P 500 both open positive in the morning. However, we want to keep our position size pretty small. More conservative traders will want to wait for a pull back toward the $54.00 level instead. The Sept. $60s are only $0.95 at the moment so I'm not suggesting a stop loss on this trade. Use your position size to manage risk.

- Suggested Positions -

buy the SEP $60 call (TDC1117I60) current ask $0.95

Annotated Chart:

Entry on August xx at $ xx.xx
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 2.8 million
Listed on August 15, 2011