Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trades:

The DIA and IWM both fell to their August lows. This could be a good spot to buy calls with a stop loss under today's low.

I would also check these stocks out for potential bullish trades: COST, WPI, TJX, ILMN, HANS, CERN, RRC, and CVX.

Did you notice that NFLX did not sell off during the market's two-day decline. Has it found a bottom? This might be a good spot to speculate on a bounce. Plus, shares of RL are testing support near $140.

- James


NEW DIRECTIONAL CALL PLAYS

Celgene Corp. - CELG - close: 63.54 change: -0.26

Stop Loss: 60.75
Target(s): 69.00
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
CELG was making headlines on Tuesday when the stock surged from under resistance at $62 to new 52-week highs close to $66. The move was fueled by bullish speculation that CELG would receive a positive report from EU regulators on CELG's Revlimid drug, a new cancer treatment. CELG plans to submit the drug to U.S. regulators next year. The review is supposed to be this week but I could not find an actual date. That makes this trade somewhat dangerous since EU could turn down the Revlimid application. Of course trading biotech stocks is always dangerous because you do not know when a drug trial or drug application headline will come out and whether or not the results are bullish or bearish.

The relative strength in CELG today is encouraging. Traders bought the dip at $61.05. I am suggesting small bullish positions now but only if CELG and the S&P 500 index both open positive tomorrow. We'll use a stop loss at $60.75. Our target is $69.00.

*See Entry Point Details Above*

- Suggested Positions -

buy the OCT $65 call (CELG1122J65) current ask $1.92

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 10/27/11 (unconfirmed)
Average Daily Volume = 4.0 million
Listed on September 22, 2011


Hewlett Packard - HPQ - close: 22.80 change: -1.18

Stop Loss: 19.75
Target(s): 29.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Yesterday HPQ was surging on speculation that the company would replace its CEO. Today, after the closing bell, HPQ announced that Leo Apotheker was stepping down as President and CEO immediately and the company has hired Meg Whitman to replace him. Whitman was previously president of Ebay. Many analysts believe that HPQ's decision to replace Apotheker was done too quickly. The after hours rally in HPQ was tempered by mixed guidance. HPQ reaffirmed their EPS numbers but cautioned that their revenue outlook was cloudy.

We suspect that the low is in for HPQ but we're going to give this trade a wide (aggressive) stop loss at $19.75 since the market could see more volatility. The newsletter is suggesting new positions now. More conservative traders may want to wait and see the market breaks down under its August lows, which might lead HPQ toward the $20.00 level. Our multi-week target is $29.50.

- Suggested Positions -

buy the 2012 Jan. $24 call (HPQ1221A24) current ask $2.27

Annotated Chart:

Entry on September 23 at $ xx.xx
Earnings Date 11/21/11 (unconfirmed)
Average Daily Volume = 26.6 million
Listed on September 22, 2011


ishares Silver ETF - SLV - close: 34.92 change: -3.64

Stop Loss: 33.45
Target(s): 39.50, 42.50
Current Option Gain/Loss: Unopened
Time Frame: 5 to 8 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Base metals like copper are plunging on worries that the global economy is slowing. Copper actually fell into a new bear market (-20% from its recent highs) with today's drop. Yet if stocks continue to plunge we could see another stampede into gold and silver as alternative "safe haven" trades. It has been argued that gold and silver move too fast to actually be considered true safe havens these days. Yet that doesn't mean they won't catch a bid if the stock market starts to break down.

We see today's -9.4% drop in the SLV as an overreaction. Investors were selling anything they could to raise money (likely for margin calls). The SLV paused near technical support at its simple and exponential 200-dma. I am suggesting small bullish positions now with a stop loss at $33.45. More aggressive traders may want to put their stop loss under $32.00 instead. Personally, I'd rather close the trade at $33.45 and look to re-enter again later if we see SLV bounce near $32.00.

The SLV could see resistance near $38.00 but we're setting our multi-week targets at $39.50 and $42.50.

- Suggested Positions - (Small Positions)

buy the NOV $37 call (SLV1119K37) current ask $1.91

- or -

buy the 2012 Jan $40 call (SLV1221A40) current ask $2.00

Annotated Chart:

Entry on September 23 at $ xx.xx
Earnings Date --/--/--
Average Daily Volume = 24.4 million
Listed on September 22, 2011


Whole Foods Market - WFM - close: 67.63 change: -2.42

Stop Loss: 64.90
Target(s): 73.00, 77.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
We tried to play WFM earlier in the week but I suggested waiting for a dip back toward support near $68.00. Today's market sell-off has provided that opportunity. The intraday low was $66.60 but shares managed to trim their losses.

I am suggesting small bullish positions now but only if WFM and the S&P 500 index both open positive tomorrow morning. If triggered we'll use a stop loss at $64.90. More conservative traders may want to use a stop loss closer to $66.50 instead. Our first target is $73.00. Our second, more aggressive target is $77.50.

*See Entry Details Above*

- Suggested Positions - (Small Positions)

buy the OCT $70 call (WFM1122J70) current ask $2.54

- or -

buy the NOV $72.50 call (WFM1119K72.5) current ask $3.65

Annotated Chart:

Entry on September xx at $ xx.xx
Earnings Date 11/02/11 (unconfirmed)
Average Daily Volume = 2.2 million
Listed on September 22, 2011