NEW DIRECTIONAL CALL PLAYS

Cabot Oil & Gas - COG - close: 75.10 change: +0.86

Stop Loss: 69.90
Target(s): 82.00, 84.75
Current Option Gain/Loss: Oct.$80: + 0.0%
Time Frame: 3 to 4 weeks
New Positions: see below

Company Description

Why We Like It:
COG continues to outperform its peers in the oil sector. That's one reason we want to reload our call trade. The stock has been an active trade on our newsletter but the market's spike lower this morning stopped us out. COG managed a strong bounce from the $70.50 area in what looks like a bullish engulfing candlestick pattern.

I am suggesting bullish call positions now but only if both COG and the S&P 500 index both open positive tomorrow morning. If triggered we'll put our stop under today's low. There is resistance at the $78.50 level. Conservative traders may want to take some money off the table near $78.50. I am setting our targets at $82.00 and $84.75.

- Suggested Positions -

buy calls if COG & S&P500 index both open positive tomorrow morning.

buy the OCT $80 call (COG1122J80) current ask $3.80

09/06 original trade stopped out. Try again tomorrow with new stop and targets

chart:

Entry on September xx at $--.--
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 2.1 million
Listed on September 6, 2011


Energy XXI Ltd. - EXXI - close: 25.08 change: -0.12

Stop Loss: 23.49
Target(s): 27.90, 29.75
Current Option Gain/Loss: + 00.0%
Time Frame: 6 to 12 weeks
New Positions: see below

Company Description

Why We Like It:
EXXI has been an active bullish candidate on the newsletter but the market's sharp spike lower this morning stopped us out. We want to take advantage of the intraday bounce from the $24.00 area as a new bullish entry point to buy calls.

I am suggesting we buy calls now but only if EXXI and the S&P500 index both open higher tomorrow morning. We'll use a stop loss at $23.49, just under today's low. The next level of resistance is $27.00 and then $28.00.

Readers may want to keep their position size small because EXXI can be a volatile stock! Plus, I want to point out that technically EXXI is in a neutral trading pattern of higher lows and lower highs (pennant formation).

- Suggested Positions -

buy calls if EXXI & S&P500 index both open positive tomorrow morning.

buy the OCT $27 call (EXXI1122J27) current ask $1.75

- or -

buy the DEC $30 call (EXXI1117L30) Current ask $1.80

09/06 original trade stopped out. Try again tomorrow with new stop and targets

chart:

Entry on September xx at $--.--
Earnings Date 10/25/11 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on September 6, 2011