NEW DIRECTIONAL CALL PLAYS

Dollar Tree, Inc. - DLTR - close: 71.21 change: -0.57

Stop Loss: 69.45
Target(s): 74.50, 77.50
Current Option Gain/Loss: Unopened
Time Frame: 2 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Investors are worried about another recession in the U.S. They are betting that customers will try and stretch their dollar by visiting their local dollar store, like DLTR. This stock hit new all-time highs this past week. Shares tested prior resistance as new support near $70 on Friday morning.

The intraday bounce on Friday looks like a new bullish entry point. I am suggesting we buy calls now but only if DLTR and the S&P 500 index both open positive Tuesday. If triggered we'll use a stop at $69.45. I'm setting a conservative price target at $74.50 and a more aggressive target at $77.50.

We will list both September and October calls but bear in mind that Septembers will expire in less than two weeks. I prefer the Octobers!

*See Entry Details in Play Description*

- Suggested Positions -

buy the SEP $75 call (DLTR1117I75) current ask $1.30

- or -

buy the OCT $75 call (DLTR1122J75) current ask $1.85

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 11/17/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on September 3, 2011


Ingersoll-Rand Plc. - IR - close: 32.38 change: -0.15

Stop Loss: 30.75
Target(s): 34.75, 36.75
Current Option Gain/Loss: Unopened
Time Frame: 2 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Industrial names were sold pretty hard on Friday as trades worried over a new recession. Yet IR managed to pare most of its losses with a strong intraday bounce. The stock made a higher high last week compared so plenty of stocks that struggled with the mid August highs. If the market cooperates we could see IR rally toward its 50-dma.

I am suggesting bullish positions now but only if IR and the S&P 500 index both open positive on Tuesday morning. The low on Friday was $31.43 and the 10-dma is at $31.17. I am suggesting a stop loss at $30.75. Our first target is $34.75. Our second target is $36.75 (or its 50-dma).

We will list both September and October calls but bear in mind that Septembers will expire in less than two weeks. I prefer the Octobers!

*See Entry Details in Play Description*

- Suggested Positions -

buy the SEP $32 call (IR1117I32) current ask $1.35

- or -

buy the OCT $35 call (IR1122J35) current ask $1.05

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 8.0 million
Listed on September 3, 2011


NEW DIRECTIONAL PUT PLAYS

Moody's Corp. - MCO - close: 29.34 change: -0.95

Stop Loss: 31.60
Target(s): 26.50 , 25.25
Current Option Gain/Loss: Unopened
Time Frame: 2 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
The up trend in MCO was struggling prior to the market's sweeping losses in August. Now the stock is trading in a bearish pattern of lower highs and lower lows. In this market that's a common pattern. However, the financials are leading the market lower. This looks like a good spot to speculate on MCO falling to a new relative low.

I am suggesting small bearish positions now with a stop loss at $31.60, just above last week's highs. Our first exit target is $26.50 because the daily chart is suggesting MCO should find support there from late 2010. I'm setting a more aggressive target at $25.25 as well.

FYI: There are plenty of investors who are bearish on MCO. The most recent data listed short interest at almost 15% of the 183 million-share float. That does raise the risk of a short squeeze. We want to keep our position size small.

The Point & Figure chart for MCO is bearish with a $19 target.

We will list both September and October calls but bear in mind that Septembers will expire in less than two weeks. I prefer the Octobers!

* Small Positions *

- Suggested Positions -

buy the SEP $30 PUT (MCO1117U30) current ask $1.53

- or -

buy the OCT $27 PUT (MCO1122V27) current ask $1.43

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 4.5 million
Listed on September 3, 2011