Editor's Note:

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

DE, TIF, COG, NOV

We did see a LOT of bullish reversals today. I looked through the S&P500 components and nearly 50% of them had produced a bullish engulfing (reversal) candlestick pattern. Normally these patterns need to see confirmation but the widespread nature of the reversal is definitely bullish.

- James


NEW DIRECTIONAL CALL PLAYS

Alexion Pharmaceuticals - ALXN - close: 62.68 change: +1.81

Stop Loss: 59.90
Target(s): 67.90
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
In spite of the market's recent weakness shares of ALXN still have an up trend. The pull back over the last few days looks like a normal, and healthy correction. Traders bought the dip near $60.00, which is psychological support. Given this stock's relative strength we want to take advantage of today's bounce.

I am suggesting bullish positions now with a stop loss at $59.90. Today's low was $59.98. However, we do not want to open positions unless both ALXN and the S&P500 index both open positive tomorrow. I'm setting our target at $67.90, just under the recent highs. More aggressive traders could aim for the $70.00 area.

*See Entry Point Details Above*

- Suggested Positions -

buy the OCT $65 call (ALXN1122J65) current ask $2.00

Annotated Chart:

Entry on October xx at $ xx.xx
Earnings Date 10/20/11 (unconfirmed)
Average Daily Volume = 1.8 million
Listed on October 04, 2011


United Technologies - UTX - close: 69.54 change: +0.18

Stop Loss: 66.80
Target(s): 74.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of UTX are bouncing from support near their August lows. The intraday low today was $66.87. I am suggesting bullish positions now on today's intraday bounce with a stop loss at $66.80. However, we do not want to open positions unless both UTX and the S&P 500 index both open positive tomorrow morning. Conservative traders may want to exit/take profits at the 50-dma. I am setting our target at $74.50.

NOTE: We do not want to hold over UTX's earnings report on Oct. 19th.

*See Entry Point Details Above*

- Suggested Positions -

buy the OCT $70 call (UTX1122J70) current ask $2.56

Annotated Chart:

Entry on October xx at $ xx.xx
Earnings Date 10/19/11 (confirmed)
Average Daily Volume = 6.3 million
Listed on October 04, 2011