In addition to tonight's new candidate, consider these stocks as possible trades:
ANF - Shares have rallied to resistance near the late August highs. A trigger near $66.50 could be used as a new bullish entry point. Look for additional resistance at the 100-dma.
APKT - The three-week trend of higher lows, the bullish engulfing candlestick yesterday, and today's close over $50.00 all look short-term bullish. I would be tempted to buy calls here but keep positions small. The larger trend is still down. Look for resistance near $57 and $60.
NEW DIRECTIONAL CALL PLAYS
Mead Johnson Nutrition - MJN - close: 72.52 change: +1.17
Stop Loss: 68.75
Target(s): 77.00, 79.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
MJN has been showing relative strength and closed near all-time highs on Friday. If the market continues to rally then it could see a bullish breakout past resistance in the $72.80 area.
I am suggesting we use a trigger to launch bullish positions at $73.00. However, we do not want to open positions in MJN if the S&P 500 is negative at the time. If triggered at $73.00, we'll use a stop loss under Monday's low. Our targets are $77.00 and $79.50. The $75.00 level might offer some overhead resistance.
NOTE: The spreads on the Oct. $75 calls are a lot wider than the spreads on the $70s. Buying the $75s would be a riskier bet.
Trigger @ 73.00
- Suggested Positions -
buy the OCT $70 call (MJN1122J70) current ask $4.45
- or -
buy the OCT $75 call (MJN1122J75) current ask $2.34 (wider spreads)
Entry on September xx at $ xx.xx
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 1.6 million
Listed on September 13, 2011