NEW DIRECTIONAL CALL PLAYS

Goldman Sachs - GS - close: 109.55 change: -6.31

Stop Loss: 102.25
Target(s): 113.75
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Shares of GS experienced some profit taking today. Financials had been some of the market's best performers last week. Today they were some of the worst as traders took money off the table to lock in gains. Technically GS has entered the gap from $106 to 110. The bottom of the gap should be support. Plus, the stock used to have resistance at $105. This level should now be new support.

I am suggesting we launch small bullish positions on a dip at $105.25 with a stop loss at $102.25. If triggered our upside target is $113.75. More aggressive traders could aim for the 100-dma instead. We do want to keep our position small because GS can be a volatile stock.

buy-the-dip Trigger @ $105.25

- Suggested Positions -

buy the NOV $105 call (GS1119K105)

Annotated Chart:

Entry on October xx at $ xx.xx
Earnings Date 01/19/12 (unconfirmed)
Average Daily Volume = 8.5 million
Listed on October 31, 2011


United Technologies - UTX - close: 77.98 change: -1.53

Stop Loss: 74.45
Target(s): 79.85
Current Option Gain/Loss: Unopened
Time Frame: 2 to 3 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
Dow-component UTX appears to have stalled at resistance near $80.00. The stock will likely fill the gap and there is a good chance it will dip toward the 10-dma and even the $75.00 level. Yet this is probably just a normal correction within the new up trend. We want to be ready to buy the dip. I am suggesting we buy calls on a dip at $76.25 with a stop loss at $74.45. Our target is $79.85. More aggressive traders could aim for the simple 200-dma instead.

buy-the-dip Trigger @ $76.25

- Suggested Positions -

buy the NOV $77.50 call (UTX1119K77.5)

Annotated Chart:

Entry on October xx at $ xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume = 5.2 million
Listed on October 31, 2011