Editor's Note:

In addition to tonight's new candidates I would keep my eye on this list below for potential trades this week.

EVEP, CMI, FLS, ROST, DECK, DRQ, KSU, STRA, NKE, EOG, CLH, and ESL.

EVEP - A rally past $78.00 could be used as an entry point.

DRQ - A breakout past $70.00 would also be a bullish breakout past its multi-month trendline of lower highs.

STRA - It looks like STRA could be forming a bottom. The stock has above average short interest and a small float, which is a great recipe for a short squeeze. A breakout past $93.00 could spark some serious short covering. I was very tempted to buy calls on STRA but the option spreads are wide.

- James


NEW DIRECTIONAL CALL PLAYS

Cabot Oil & Gas - COG - close: 83.64 change: +1.55

Stop Loss: 79.65
Target(s): 89.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
This is a momentum trade. COG reported earnings back in late October that missed estimates and the revenue number. Yet the stock rallied anyway on expectations for strong growth next year. The breakout past resistance at $80.00 is bullish. Shares have already tested this level as new short-term support.

I consider bullish positions on COG now an aggressive, higher-risk trade but if the market can stay positive then COG looks poised to outperform. I am suggesting we launch small bullish positions on Monday if both COG and the S&P 500 index can open positive. We want to keep positions small to limit our risk. If triggered we'll use a stop loss at $79.65, that's a little wide. Our target is $89.75. I am listing both November and December calls but bear in mind that Novembers will expire in about two weeks. FYI: The Point & Figure chart for COG is bullish with a $116 target.

*See Entry Details Above* (small positions)

- Suggested Positions -

buy the NOV $85 call (COG1119K85) current ask $3.10

- or -

buy the DEC $90 call (COG1117L90) current ask $3.70

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 2.6 million
Listed on November 5, 2011


McDonald's Corp. - MCD - close: 93.81 change: +0.81

Stop Loss: 91.60
Target(s): 99.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
With almost 33,000 restaurants worldwide, MCD is sitting at the top of the food chain. The stock is also performing well. This Dow-component is sitting at all-time highs. Shares look poised to breakout past short-term resistance at $94.00.

I am suggesting we open small bullish positions when MCD hits $94.05. If triggered we'll use a stop loss at $91.60 and aim for a rally toward $99.75. I am suggesting small positions to limit our risk. We will list both November calls and Decembers, but keep in mind that Novembers will expire in about two weeks. FYI: The Point & Figure chart for MCD is bullish with a $112 target.

Trigger @ 94.05 (small positions)

- Suggested Positions -

buy the NOV $95 call (MCD1119K95) current ask $0.36

- or -

buy the DEC $95 call (MCD1117L95) current ask $1.43

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 6.0 million
Listed on November 5, 2011


Under Armour, Inc. - UA - close: 84.30 change: -1.46

Stop Loss: 81.90
Target(s): 92.50
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
UA looks very bullish with its breakout past major resistance near $80. The stock has spent the last several days digesting gains and consolidating sideways. Traders have been buying the dips near the rising 10-dma.

Nimble traders could try buying another dip near the 10-dma. If the stock market happens to correct then I would look for UA to retest the $80 zone. However, we are cautiously bullish on the market. I am suggesting a trigger to open small bullish positions at $86.25. If triggered we'll use a stop loss at $81.90 and aim for $92.50. We do want to keep our position size small to limit risk since UA can be a volatile stock. FYI: The Point & Figure chart for UA is bullish with a $106 target.

Trigger @ 86.25 (small positions)

- Suggested Positions -

buy the NOV $87.50 call (UA1119K87.5)

- or -

buy the DEC $90 call (UA1117L90)

Annotated Chart:

Entry on November xx at $ xx.xx
Earnings Date 01/26/12 (unconfirmed)
Average Daily Volume = 1.4 million
Listed on November 5, 2011