Editor's Note:

In addition to our new trades tonight we were going to add a bullish call play on ULTA with a trigger to buy calls above $61.00 but the company reported earnings tonight. ULTA beat estimates by 6 cents and guided higher but we're not seeing any action in after hours trading. Aggressive traders could still try but there could be some unnecessary volatility as traders exit now that the news is out.

- James


NEW DIRECTIONAL CALL PLAYS

Range Resources Corp. - RRC - close: 65.39 change: -0.61

Stop Loss: 60.55
Target(s): 72.25, 74.75
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see Trigger

Company Description

Why We Like It:
RRC continues to edge higher and seems to be coiling for a bullish breakout past resistance near $67.00. Nimble traders could try and buy a dip near its rising 30, 40, or 50-dma(s). Instead of trying to catch a dip I am suggesting readers buy a breakout. Last week the stock failed twice near $66.70. Today the stock failed at $66.92. I am suggesting we buy calls at $67.10. More conservative traders may want to wait for a move past $67.50 instead since the early August high was $67.33.

We will start this trade with a wide (aggressive) stop loss at $60.55, which is under Tuesday's low. Once we're triggered and the play is open we plan to adjust our stop loss higher.

FYI: The Point & Figure chart for RRC is bullish with an $85 target.

Trigger @ $67.10

- Suggested Positions -

buy the OCT $70 call (RRC1122J70) current ask $2.65

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 2.3 million
Listed on September 8, 2011


Sina Corp. - SINA - close: 108.74 change: -0.46

Stop Loss: 103.90
Target(s): 124.00
Current Option Gain/Loss: Unopened
Time Frame: 4 to 6 weeks
New Positions: Yes, see trigger

Company Description

Why We Like It:
SINA is essentially a Chinese Internet stock and tends to move with that industry. The stock has been showing some relative strength this week with a big bounce off its Tuesday low near technical support at the 200-dma. SINA saw a temporary breakout past resistance at the 100-dma and the $110 level today but it failed near the trendline of lower highs. The high today was $111.97.

I suspect that if SINA can breakthrough this trendline it will see a significant surge toward the July highs or higher. You could argue that SINA has been building a big inverse (bullish version) head-and-shoulders pattern (see chart).

Nimble traders could try buying a dip near $100 if we see another market pull back. I am suggesting we use a trigger to buy calls at $112.55. If triggered we'll use a stop loss at $103.90. We do want to keep our position size small because SINA can be a volatile stock and we have a wide stop loss.

I am setting our target at $124.00. More aggressive traders could aim higher. The inverse H&S pattern would suggest a target in the $150 area.

FYI: The Point & Figure chart for SINA has just broken through resistance and is bullish with a $146 target.

Trigger @ 112.55 (SMALL positions!)

- Suggested Positions -

buy the OCT $125 call (SINA1122J125) current ask $4.90

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 11/15/11 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on September 8, 2011