Editor's Note:

In addition to tonight's new candidates I'm providing a list of stocks that might offer some bullish trading opportunities if the stock market continues to rally:

AGN, BA, WPI, TUP, FSLR, SOHU, CTSH, GDI, FFIV.

- James


NEW DIRECTIONAL CALL PLAYS

Cabot Oil & Gas - COG - close: 71.95 change: +2.45

Stop Loss: 67.75
Target(s): 75.85, 79.25
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
COG continues to outperform its peers in the energy sector. The stock is currently bouncing from support near $65 and the close over $70-71 on Friday looks bullish. However, bears could argue that COG has yet to breakout past the gap down from August 18th and the chart is showing a neutral pattern of lower highs and higher lows. I would turn your attention to COG's longer-term up trend. If the stock market can build on last week's bounce then COG might be able to retest its highs in the $79 area.

Tonight I am suggesting we buy calls on COG now but only if the stock and the S&P500 index both open positive on Monday - or if we see COG trade over $73.00. I'm not trying to confuse you, but that's two different entry points. One is if both COG and the S&P500 open positive. The other is if COG trades above $73.00 no matter what the market is doing. I'd rather not miss the breakout just because the S&P500 underperforms.

I'm listing two different targets to take profits at $75.85 and $79.25.

buy calls if both COG and the S&P500 open positive on Monday

- Suggested Positions -

buy the SEP $75 call (COG1117I75) current ask $2.65

- or -

buy the OCT $75 call (COG1122J75) current ask $4.90

Annotated Chart:

Entry on August xx at $ xx.xx
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on August 27, 2011


Hansen Natural Corp. - HANS - close: 84.63 change: +0.12

Stop Loss: 80.90
Target(s): 89.75, 94.50
Current Option Gain/Loss: Unopened
Time Frame: 2 to 6 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
HANS has been one of the NASDAQ's best performers this year. The stock hit new all-time highs this past week after breaking out past resistance in the $82 area. Friday's dip and intraday bounce near its prior highs looks like a very attractive entry point to buy calls.

I am suggesting bullish positions now with a stop loss at $80.90 but we only want to launch positions if both HANS and the NASDAQ open positive on Monday morning. The exception will be if we see HANS rally past $87.00 and we'll buy the breakout over $87.00 with a new stop at $83.75 instead.

See Entry Conditions Above

- Suggested Positions -

Buy the SEP $90 call (HANS1117I90) current ask $1.80

- or -

buy the OCT $90 call (HANS1122J90) current ask $3.70

Annotated Chart:

Entry on August xx at $ xx.xx
Earnings Date 11/03/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on August 27, 2011


Lululemon Athletica - LULU - close: 52.31 change: +3.19

Stop Loss: 47.90
Target(s): 56.00, 59.50
Current Option Gain/Loss: Unopened
Time Frame: up to September 9th
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of the fashionable athletic and yoga apparel store have seen a volatile August but the long-term trend is still higher. The recent bounce from its exponential 200-dma looks like it could be a bottom. However, the stock is trading inside a bearish trend of lower highs and lower lows since the August decline began. Thus, I would consider this a more aggressive and speculative trade. We want to keep our position size small to limit risk.

I am suggesting bullish positions now but only if LULU and the S&P500 both open higher on Monday morning. If triggered we'll use a stop under Friday's low at $47.90. Our targets are $56.00 and $59.50.

NOTE: This is a short-term trade. We do not want to hold over the Sept. 9th earnings report.

*See Entry Details Above*

- Suggested Positions -

buy the SEP $55 call (LULU1117I55) current ask $2.70

Annotated Chart:

Entry on August xx at $ xx.xx
Earnings Date 09/09/11 (confirmed)
Average Daily Volume = 4.2 million
Listed on August 27, 2011